Post Olympics - What Next?

In this sixth article, in an exclusive series for Fortune by Michael Payne – one of the world’s foremost authorities on  the Olympics and Global marketing, we take a look at what happens to the Sports Marketing Industry in China after the Olympic Games.

The focus on Olympic marketing programmes over the past 7 years will has brought  sports marketing into the main stream marketing agenda in China. A broad cross section of Chinese companies have been exposed to the potential benefits and challenges of using sports marketing to build their brand and expand business opportunities. How will the industry develop after the Olympics? What will be the new properties that will help Chinese companies develop their presence and reputation on the global stage? What will be the local events, that will help to build local brand loyalty?

For more than two decades, Michael Payne as the IOC’s first ever Global Marketing & Broadcast Director, initially under IOC President Samaranch, and then President Rogge oversaw a transformation of the Olympic Games from bankruptcy into a multi billion $ franchise. He was intimately involved in the overall strategy to bring the Olympic Games to China, and thereafter helped devise the marketing plan for the Games with BOCOG, and negotiate all the key broadcast contracts. Based on his experience directing the Olympic marketing effort for more than 14 Olympic Winter and Summer Games, he will provide the key insights as to how China and Chinese industry can best benefit from the Games, and avoid some of the pitfalls and mistakes of the past.

Michael Payne’s book – ‘Olympic Turnaround’ – has been published around the world in more than 10 languages – and has been described by President Samaranch as the most important book ever written on the business of the Olympics.

When IOC President Dr Jacques Rogge steps out onto the centre stage of the Bird’s Nest Stadium on the 25th August, bringing the Games of the XXIX Olympiad to a close, much will have changed in China since the country was first awarded the right to host the Olympic Games seven years previously. International media commentators will likely still be rushing to judgement, as to the extent that the hosting of the Games impacted on the social, political or economic fabric of the country – often demanding immediate results.

I have been travelling to China for over two decades and vividly recall my first discussions with representatives of the Chinese political and sports leadership back in the  late 1980’s, as to what it would take for China to put forward a successful campaign to win the right to host the Olympics. In my view, China has changed beyond all recognition – and the Olympic Games will have played an important catalyst in the overall development of the country – as it has helped with numerous previous host countries.

However the full impact of the changes, as a result of the Olympics will not be known for at least a decade . Only  historians, with the full benefit of time, will be able to judge the true impact of the Games. It is totally misplaced and wrong for the current commentators, notably western media editors – people who in many cases has never visited China – to try and judge the impact now, demanding immediate results, with whatever the latest and most provocative headline of the day might be!

One impact of the Games though will be felt immediately – and that will be the impact on the marketing industry in China. The sponsorship programmes of the Olympic Games, and the record sums that have been invested by both international and Chinese companies in the Olympic effort will have brought sports sponsorship into the main stream marketing agenda in China.

International companies will have seen how to tap into the sports and national passion of the Chinese population. But more importantly, multiple Chinese companies will have learnt how to exploit the power of sport to develop their local and international brand profile, and realised that sports marketing, correctly structured can be an exceedingly cost effective marketing tool, and a mandatory part of the overall marketing portfolio.

Firstly let’s not forget that the Olympic sponsorship programmes do not actually end with the Closing Ceremonies – the Olympic contracts give sponsors the rights to continue an Olympic association through the end of 2008. However, all too often companies only focus on developing their programmes through the Games, and totally forget to develop any post Games activation programme. The sense of national pride the all Chinese people will feel in successfully hosting these Games, further heightened by the strong likelihood that China will lead the medals table, will provide a unique platform for all partners to complete their exploitation of their Olympic association.

However come January 1, 2009 – what next?

There will be clear opportunities for companies to continue their Olympic association – both within China and on the international stage.

On a national basis, the Olympic marketing focus will turn to the Chinese Olympic team. Before Beijing won the rights to the Olympic Games, marketing opportunities connected to the Chinese Olympic Committee and national team were fairly limited, outside of the traditional outfitting and sports equipment deals. Looking ahead, the Chinese Olympic Committee will now own one of the most valuable brands in the sports market place – the Olympic brand, combined with a strong sense of nationalism.

The Chinese Olympic Committee is already studying how to build on the strengths and learning’s of the BOCOG marketing programmes, and plans to shortly launch a new national Olympic sponsorship programme – offering local and international companies a powerful and cost effective platform to continue their Olympic partnership.

Some people argue that after seven years of intensive Olympic marketing programmes, there is the risk of Olympic marketing fatigue and burn out. I do not believe that this will be the case in China – not least because of the unique sense of national pride that will exist going forward in the national team.

 To date most of the Olympic marketing focus has been more closely aligned to the operation of the Games, than the national team. If the Chinese Olympic Committee develops the right marketing structure and programme, there will be strong interest to continue the Olympic association. Most of the international TOP sponsors, including Coca Cola, McDonalds, Omega, Samsung and Visa have already renewed their agreement with the IOC, and can be expected to be at the forefront in China at driving their partnership forward with the Chinese Olympic team.

On the international front, several Chinese companies are already looking at how to build on their Olympic expertise and seek partnerships with future Olympic organisers. In the same way that Australian companies sought out business opportunities connected to Beijing 2008, using the experience gained with Sydney 2000, now it will be the turn for Chinese companies to reap the benefit.

The Australian Government, through it’s trade bureaus around the world, turned their Olympic event management experience into a major new business line for Australian companies. That same opportunity exists for China – who now hold the latest and most upto date understanding of major event management.

Already several BOCOG licensees and suppliers are studying how best to proceed forward with London 2012 and beyond. It can be expected that in the coming weeks and  months  there will be announcements of future Olympic organisers turning to Chinese companies, as future partners,  not only their manufacturing expertise but more importantly their specific Olympic knowledge..

Although the Olympic flame will move on, China will remain centre stage of the international sports scene – offering International Federations a new level of operational management, facilities and a growing list of major cities wishing to emulate Beijing and Shanghai, by using sport to place them on the world map.

China is already slated to host several of the biggest multi sports events outside of the Olympic Games, spreading the benefit of hosting international sports events throughout the country, and keeping China very much centre stage on the international sports scene.

Next year, 2009 will see Harbin host the Winter Universiade -  the World Student Games for winter sports. For Harbin it will be another important step along the road to their goal of one day hosting the Olympic Winter Games. With the growing development of the Winter Sports industry in China, it is to be expected that in the not too distant future, the IOC will give serious consideration to a Chinese candidate for the Olympic Winter Games.

2010  will see China hosting for only the second time, the Asian Games. Guangzhou will actually host an event that will attract more athletes (12,000) and nearly double the number of sports (45)  than the Olympic Games.

And in 2011, it will be Shenzhen’s turn to take the international stage with the hosting of the World University Games, bringing together ---- athletes to compete across --- sports.

None of the above events will provide anywhere close to the same level of media coverage as the Olympics, and although the Asian Games will attract top level sports competition, as a continental Games, there will be little exposure outside of Asia. However, all events will give their host cities a platform to promote their credentials and brand onto the international stage.

In terms of international media coverage, nothing will likely compete with Formula One – the World’s premier motor racing series, that since 2004 has seen the circus swing stop in Shanghai as part of it’s 19 series global tour.

Formula One still outperforms all other sports events, outside of the Olympics and the Soccer World Cup, in terms of global audience – with it’s 8 month long season attracting a unique tv audience of close to one billion viewers. Shanghai’s annual staging of the F1 race, often as the last or penultimate race, with even heightened global media interest has provided the city with a valuable and unique platform to promote it’s tourist and business offerings.

It will be interesting to see whether Shanghai is successful in renewing their hosting agreement with F1 after the contract expires in …… There is a growing list of nations and cities scrambling to have the privilege of hosting an F1 race, with new circuits in Singapore joining this year, and Korea, India and Middle East in coming years. Should Shanghai not step up to the mark, it would not be long before in my mind another Chinese City stepped forward, seeing the benefits of showcasing their city to the world – especially with the growing interest in that staging of street races, as opposed to the cost of having to build new and costs dedicated circuits. Singapore’s decision to stage the first ever night race, and Valencia, Spain copying Monaco with a circuit around their port, is an indication of what is to come.

Several Chinese companies have already begun to exploit the international platform offered by F1 to fast track their international brand development. By far the most successful, has been Chinese electronics group, Aigo who through an astute partnership with the McLaren team, and driver phenomenon Lewis Hamilton has over night created an international brand identity of innovation and technological leadership.

As Chairman / CEO of Aigo pointed out at the World Economic Forum in Davos, ‘F1 catapulted Aigo onto the world stage – opening up new markets, and partnership associations with leading global brands like Vodafone, Mercedes and Tag Heuer. The F1 partnership has probably saved us at least 4 years in our international development. I never believed that a sports partnership could be so successful.’

Aigo has been joined by Lenovo, who has partnered with the AT&T Williams team. Lenovo is fast developing a broad international sports portfolio with relationships with NBA and a growing list of local events.

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