Hosting the Olympics: a city’s make-or-break impression Ram Herstein and Ron Berger
Ram Herstein is Head of the MBA program and Associate Professor of Marketing, and Ron Berger is the Head of Marketing, both at The Lander Institute – Jerusalem Academic Center, Jerusalem, Israel.
any business people and scholars in China still criticize the strategic move of the Chinese government to host the Olympic Games, which was meant to exploit the rare opportunity to showcase China to the Western world en masse. Most critics claim that the sum of $42 billion was too big an investment for a developing country to put into a two-week sports show. Analysis of the investment reveals that most of the money did not go to preparing the Olympic facilities but rather into construction of national infrastructure. For example, the Chinese government spent $500 million to build the ‘‘Bird’s Nest’’ National Stadium, while it spent $3 billion to construct a modern airport terminal. In Beijing itself, the government spent $30 million to renovate a dusty road, giving it a facelift which included planting trees and flowers and erecting an ornamental wall.
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Is this just spending money or can it be understood as an investment? Opponents of the expenditures assert that this money would have been better spent on health care and other social welfare programs. Others would argue that this was the best investment the Chinese government ever made and that the country will be reaping its profits for many years. One enthusiastic supporter of hosting Olympic Games is US President Barack Obama, who at a mayor’s conference stressed the importance of cities to national economic growth: ‘‘Cities are the building blocks of strong regions, and strong regions are essential for a strong America’’. Obama worked hard to increase Chicago’s chances of hosting the Olympic Games in 2016, but despite his substantial efforts, Rio de Janeiro was awarded the coveted honor. The Brazilian government defined this opportunity in terms of its being the way for Rio and Brazil to become major world players.
City branding as a strategic device People are used to products and services being marketing but the idea that a place can be marketed in the same way as a product and service emerged only at the end of the twentieth century. Marketers realized that they can build images for places and get consumers to accept these linkages. They fashion the images from the place’s geography, history, art and music, famous citizens and other characteristics (Kotler and Gertner, 2002). Traditionally, countries used branding for economic and political reasons. Branding was one way to establish a country’s economic status and at the same time exert political influence on regional neighbors or reinforce a global position. Only later, regions and cities started to consciously brand themselves as commodities. For cities, the main reason behind this move was to attract tourists. In fact, today countries and cities all over the globe, including developing and emerging economies, are investing in rebranding to become more meaningful in the global business, political and touristic arena. The most well-known rebranding city strategy was that of New York City, which transformed itself into a global city, appealing to diverse target markets: business people, tourists, city residents, and visits from all over the world who dream of living in this city. The uniqueness behind New York’s
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VOL. 34 NO. 5 2013, pp. 54-59, Q Emerald Group Publishing Limited, ISSN 0275-6668
DOI 10.1108/JBS-12-2012-0074
rebranding strategy is that it was not based on actual assets such as its most famous skyscraper (Empire State Building), its river (the Hudson), its most well-known museum (the Metropolitan Museum of Art), its most renowned business area (Wall Street), its most celebrated landmark (Statue of Liberty) or its most distinguished theater area (Broadway); rather, the rebranding focused on intangible assets. The idea behind the slogan ‘‘I Love NY’’ was to present New York as a city that people visit not for practical reasons such as sightseeing, shopping or business, but in order to connect to its spirit. The idea is that everyone can find something interesting in New York without having to plan for it in advance (Herstein, 2012). This maverick strategy paved the way for cities all over the world to base their new image on intangible assets – their spirit and atmosphere. City branding can be a more rapid process than country branding, but it is also a more complicated process since most cites lack intangible assets compared to countries. Further, researchers and practitioners have a difficult job trying to measure success in encapsulating and marketing these intangible assets. Among the different scales used to rank cities, the most common is Anholt’s (2006) City Brand Hexagon, which enables city planners and decision-makers to focus on a city’s most meaningful branding components: B
The city’s presence. This component refers to the city’s contribution to its country and region. Jerusalem, for example, scores high in this component since Israel and Jerusalem are synonymous (in terms of foreign tourism) and tourists who wish to experience the tradition and history of Israel believe they can experience it in the city of Jerusalem.
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The city’s place. This component refers to the city’s physical aspects. Nice (France) ranks high in this component because of its beautiful beaches and sunny weather.
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The city’s potential. This component refers to the economic and educational opportunities that the city is believed to offer. Melbourne is an example of a city which people from all over the Asia-Pacific region wish to come to and study and even to live there.
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The city’s pulse. This component refers to the excitement that the city can offer. Berlin scores high in this component due to its unique nightlife and is considered the hippest city in the world.
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The city’s people. This component refers to the behavior of the city’s inhabitants. Stockholm ranks very high in this component because its inhabitants are known for their politeness and kindness.
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The city’s prerequisites. This component refers to the basic qualities of the city’s facilities such as schools, hospitals, public transport, and sports facilities. Copenhagen scores high in this component because of the services that the city offers its inhabitants.
City branding via mega sports events City rebranding is a very important process that requires a high level of congruity between the city’s assets and its new image (Herstein and Jaffe, 2008). A city that adopts an image that contradicts its assets will very quickly find itself being viewed as irrelevant, and even ridiculous. A city wishing to rebrand itself must provide, apart from slogans, concrete actions as well. Budapest and Porto attained their image as lively cities because of their yearly wine festivals. Berlin and Venice enjoy a high cultural image because of their well-known films festivals, which they promote year after year. New York and Paris are considered to be fashion capitals as a result of their fashion events all year round. These theme events and festivals, however, are not powerful enough to attract more than select groups, and city planners and decision-makers must therefore strive to find other theme events that have a strong impact on the city’s image and appeal to broad audiences – something that many people from all over the world can feel part of it and can identify with. Sports events seem to appeal to huge broad audiences, so, why not aim for the top – the Olympic Games. Today, global cities and big cities invest tremendous efforts to win the rare
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‘‘ Sports today are, first and foremost, social entertainment that enables anyone to partake. They create feelings that result in linkages among people. ’’
opportunity to host this mega sports event. An estimated 3.2 billion people watched the 2008 Beijing Olympic Games on television. The question as to why the Olympic Games garner such high attention from so many people around the globed can be summed up by two aspects: social entertainment and competitive excitement. No other social event in the world, which cities host year after year, captures these two aspects. Sports today are, first and foremost, social entertainment that enables anyone to partake. They create feelings that result in linkages among people. In addition, the Olympic Games bring the world’s top sportspeople together to compete against each other for the title of best in the world. This competition and the emotions that it evokes when a competitor breaks a new record generate feelings of pride and frustration, happiness and pain.
Olympic games – failure vs success A total of 22 cities have hosted the summer Olympic Games since the games were started in 1896; 11 were capital cities while the others were major metropolises. Despite the belief that hosting the Olympic Games is always a financial success story, most host cities have not benefitted significantly in financial terms, and some have even incurred great economic loss as a result of the financial investment. Any city wishing to host the Olympic Games should take into account the fact that apart from direct expenses such as sport facilities and stadiums, there are also indirect expenses that surpass the direct ones in cost. The host city has to spend huge sums on their infrastructure: roads, airport, train station, metro, museums, parks, shopping centers, entertainment facilities and more. The biggest failures were the 1972 Olympics in Munich, which lost £178 million, and the following one in Montreal, which lost $1 billion. It took Montreal 20 years to recover from the financial disaster. The 2004 games in Athens ended in a loss after the city spent e10 billion. In contrast to these losses, the Olympics in Barcelona made a profit of $5 million; the Los Angeles Olympic Games in 1984 ended in a profit of $250 million; and the games in Seoul in 1988 ended in a profit of $300 million. Why do some host cities lose and some earn money? In order to make the Olympic Games a profitable business, its organizers should follow several key rules:
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Beyond sports. The Olympic Games are not (just) platforms for sport tournaments. They should be seen as an opportunity to reinforce a city’s and a country’s image. The idea is to exploit the Olympic Games to promote the host city directly, and its country indirectly.
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Long-term investment. In the short term, the chances of earning money from this mega sports event are very limited. Nevertheless, when following a long-term investment approach of ten years, cities have proven that they can reap profits starting from the second year after hosting the Olympic and through the next ten years.
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Urban redevelopment catalyst. The Olympic Games are an opportunity to encourage people from all over the world to invest in the city’s and the country’s economies, and by so doing, the city can improve its residents’ living environment. In some instances, the Olympic Games even attract people to move to these cities and work there, and by this, the city can improve its demographic profile.
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Residents’ loyalty. In the Beijing Olympic Games, the city’s residents volunteered to make the sports event a success. The residents realized that each one could have a hand in making the Olympic Games a success, so they voluntarily gave of their time and efforts to
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beautify and clean up their city. Later, these efforts also translated into feelings of pride in their city and strengthened the linkage of Beijing’s inhabitants to their city. B
Commercial platform. Although each city and country that hosts the Olympic Games wishes to maintain a spirit of sportsmanship and amateur competition, the Olympic Games should also be seen in terms of its commercial advantages. Each host city must be careful to balance these two approaches properly. The Greek organizers made a fatal mistake by preferring the cultural approach and promoting the city and the country as cultural venues, instead of encouraging sponsors to advertise in and outside of the competing venues, and even before the opening of the Athens Olympic Games.
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Early promotion. In order to make the Olympic Games the most talked-about event, it must be promoted at least two years before its opening ceremony. The advance promotion proclaiming that the Chinese government was allowing organizers to expose China to the world drew people from all over, and especially the West. The early ‘‘hype’’ helped bring 4.7 billion viewers worldwide to watch the Olympic Games on television, one-fifth more than the 3.9 billion who watched the 2004 Olympic Games in Athens. In fact, the 2008 Olympics were the most-viewed event in American television history.
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Merging the Olympic spirit with the city spirit. People who watch the Olympic Games want to get more than sports; they want to feel the spirit of the city that hosts the event. They want to be exposed to the culture, people and atmosphere that the city offers. When Olympic Games’ organizers mix the spirit of the games with the spirit of the city, the product that is created is very powerful. Barcelona is an example of a city that prior to the Olympic Games was little known. Yet only a few years after the Olympic Games, Barcelona was a famous city and is now considered one of the largest tourist-attracting cities in Europe. By properly leveraging the games, the organizers successfully presented the Catalun˜a spirit, which is derived from the values of love, freedom, gladness, warm-heartedness and pride. They linked these values, which fit the spirit of the games, to the Olympic Games. Visitors who came to visit Barcelona felt this spirit from the first moment they entered and even in organized tours, the guides conveyed these values in a sincere way. Today, the feeling still echoes through the city.
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City-country synonymous image. The Olympic Games are not a city project, but rather a country one. The national government must invest enormous efforts to leverage the Olympic Games effectively, and accept that it is a national project. Despite other cities feeling that they will not enjoy the direct benefits of this project, the organizers must co-opt all the country’s citizens to promote and cooperate in order to take advantage this rare opportunity. Any famous people and celebrities must also contribute to promoting this event.
Challenges facing London, the latest host city Analysis of the Olympic Games through the three last decades revealed two types of implementation models. The first one is the ‘‘Barcelona model’’ and the second is the ‘‘London model’’ (Table I). The Barcelona model relates to cities that are not considered powerful in terms of economics but realized that this event could make them world cities. Some examples, apart from Barcelona are Athens, Beijing, Atlanta and Rio de Janeiro. Rio is hosting the Olympic Games Table I Differences between the ‘‘Barcelona model’’ and the ‘‘London model’’ Characteristics
The Barcelona model
The London model
Effectiveness longevity Budget Time to plan Promotion Focus
Long-term effectiveness Mainly goes to infrastructures Very long Some years before the event Mainly on the city
Short-term effectiveness Mainly goes to sports facilities and stadiums Not long Some months before the event Also on the country
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‘‘ London is just a trigger to invite people to visit Britain, but definitely not the goal of hosting this mega sports event. ’’
in 2016. These cities accepted (in the case of Rio the work is ongoing) that the Olympic Games are a long-term investment, and in order to take advantage of this event and leverage their image, they must invest huge sums of money in rebuilding the city and its infrastructure. Consequently, such cities must plan building projects and a rebranding strategy many years before the actual event and begin promoting it at least two years before the Olympic Games in order to reach as wide an audience as possible. The main purpose of this event is to focus on the city, rather than on the country. Conversely, the London model relates to cities that are very well established, such as Los Angeles, Sydney, and of course London, whose infrastructures are modern and well maintained. Therefore, they must focus on getting short-term advantages from hosting the Games and generate a high level of interest quickly. In addition, their main budgets must go to building new sports facilities and infrastructure renovation. Because they are modern, established cities, their building plans do not require massive projects that take years to prepare. Also, the promotion plan must peak some months before the event and the organizers should strive to promote not just the city but also the country as a whole. Olympic organizers, city planners and decision-makers in the London model confront four main challenges: 1. Cultural. They have to convey cultural and social messages that come from the British heritage and spirit and not the city’s spirit and traditions via a mix of aspects that best reflect the country’s values. London is just a trigger to invite people to visit Britain, but definitely not the goal of hosting this mega sports event. 2. Civil. British citizens and residents should be called upon to contribute to the Olympics’ success in order to increase their feelings of pride in and loyalty to their nation, culture, achievements and land. 3. Economic. The image of local products (country-of-origin effect) in consumers’ minds all over the globe should be increased. The achievements of British industry and its contribution of the world economy should be highlighted. 4. Political. The important role of Britain as a nation in the global political arena and its contribution to making the world more democratic and peaceful should be emphasized. Keywords: Branding, Tourism, City branding, Olympic Games, Barcelona model, London model
The challenge that confronts the London Olympic Games’ organizers and the UK government is to leverage this sports event in a such a powerful way that its results will be felt in the city and the country, even in ten years. This rare opportunity for a city and also for a country to rebrand itself is not similar to any other event opportunity. History has shown that by preparing well, having a long-term vision and recruiting the city’s and the nation’s population to help in the project, can make a city and a country very strong brands in the global arena.
References Anholt, S. (2006), The Anholt City Brands Index, 2nd ed., Global Market Institute, Seattle, WA. Herstein, R. (2012), ‘‘The thin line between country, city and region branding’’, Journal of Vacation Marketing, Vol. 18 No. 2, pp. 147-155. Herstein, R. and Jaffe, E.D. (2008), ‘‘‘The children’s city’ – the transition from a negative to a positive city image’’, Journal of Place Branding and Public Diplomacy, Vol. 4 No. 1, pp. 76-84. Kotler, P. and Gertner, D. (2002), ‘‘Country as brand, product, and beyond: a place marketing and brand management perspective’’, Journal of Brand Management, Vol. 9 Nos 4-5, pp. 249-261.
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About the authors Ram Herstein is Head of the MBA program and Associate Professor of Marketing, The Lander Institute – Jerusalem Academic Center, Jerusalem, Israel. His research area is branding, destination branding and corporate identity, and his papers have been published in leading marketing and business academic journals such as the European Journal of Marketing, Managing Service Quality, Journal of Consumer Marketing and others. Ram Herstein is the corresponding author and can be contacted at:
[email protected] Ron Berger is the Head of Marketing at The Lander Institute – Jerusalem Academic Center, Jerusalem, Israel. His research area is international marketing, cultural industries, and knowledge management. He has published in The Journal of Business Ethics, Service Journal of Business and Industrial Marketing, International Journal of Technology Management and others.
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