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2020 Olympics-Candidate Cities

IOC officials will determine the final candidate cities this week for the 2020 Summer Olympics. The current 5 contenders are: Tokyo, Madrid, Istanbul, Doha, and Baku (Azerbaijan). The first 3 cities on that list are the likely finalists, according to Olympic watchers. Each has experience bidding, so the bigger question is which cities offer the greatest impact for the Olympic movement. 'Impact' is important, because the IOC is interested in factors beyond sheer economic gain. They are also interested in finding locations that enhance reputation of the Olympic Movement, yet the IOC also wants as large an audience as possible. On the surface, Doha, Baku, and Istanbul would appear to be good candidates if the IOC is interested in expanding the range of Olympic host cities to appeal to newer audiences and countries emerging onto the world stage. Yet they have different infrastructure challenges and, as I have mentioned in this blog before, cost is increasingly a concern for host cities (i.e. some emerging market cities may not have the resources needed to host an Olympics). Tokyo, Madrid and Istanbul are also important because they are vibrant, large market cities with rich cultural traditions and a strong affinity for sports with large potential audiences. Using these two simplistic criteria (locations that enhance the Olympic reputation; and locations with large, sports-friendly audiences), Istanbul seems a viable choice. However, as the linked article above describes, both Doha and Baku are cash-rich, due to massive oil reserves, so funding won't be as much of an issue for them, even though they are 'emerging' markets. Of course, we won't know whether Istanbul (or Doha and Baku) even makes the cut this week, let alone is the final choice (which won't be known until September 2013). As we have seen historically, and are witnessing right now with London, host cities each approach the Olympics in their own way. Beijing invested more than $40 billion, although a good portion of that amount was dedicated to infrastructure improvements (new transportation systems, upgraded utilities...), and London is spending about $15-$17 billion, with an emphasis on revitalizing one of the poorest areas of London (Stratford, in east London). The bidding process is not easy, and the implications for the eventual winner are anything but clear (Will long-term economic value be created? Can the Games improve the image of the host city? Will city planners, national governments, local citizens, and businesses be able to work toward a common objective? How can planners ensure a safe Olympics while also making them accessible to as many people as possible? What displacement issues are likely to occur?...). This week we will learn which of those 5 cities will move forward to the final 17 month evaluation phase.

Olympics Digital Coverage

Social and digital media coverage of the Olympics has grown significantly since Athens in 2004, which is no surprise. The BBC announced its digital coverage today, summarized in this link. NBC's digital coverage is discussed in this article in AdAge. Both networks are joined by many others around the world in offering greatly expanded social and digital viewing alternatives for the 2012 London Olympics. This massive use of new media, combined with traditional media, risks being overwhelming to many fans, but there is little doubt the future of sports coverage is unfolding before our eyes. Interestingly, many of the broadcasters are uncertain what the fan and viewer response will be, partly because the pace of social media growth has been extraordinarily quick, and many people still are not sure how to make use of the various media choices available to them. Some still prefer the scripted structure and comfort of traditional media, but for hard core sports fans the sheer breadth of social and digital choices promises a rich array of content choices. Few, if any, will be disappointed. Undoubtedly, as digital and social media choices mature, we'll see sports fans gravitate to those they love most and, I suspect, media companies may well be surprised by what fans ultimately choose. While the recently concluded Winter Youth Olympic Games (YOG) in Innsbruck (January 2012) has not yet published final media statistics, the buzz was that a significantly increasing number of fans relied on social media as their primary YOG information source, above and beyond traditional media. Of course, this might also be a function of fewer traditional media companies broadcasting the YOG live. Nevertheless, this is a remarkably good time to be an Olympics sports fan.

IOC and USOC Funding Dispute-The Saga Continues

For the past few years the IOC and USOC have been attempting to renegotiate the share of broadcast and sponsorship funds the US receives. Philip Hersh of The Morning Call writes about this in an article today. In short, the IOC wants the USOC to reduce the percentage of funding it receives, whereas the USOC wants it to remain as is. The US is the only major participating country in the Olympics that does not rely on government funding. Other countries rely on varying levels of government support to fund their Olympic teams. The non-US countries believe that the wealthiest nation on earth should be less greedy and reduce their percentage of funding revenues received from broadcast and sponsorship fees which, proponents argue, would give more money to those nations in greater need and add important support for their athletes. The US view is that because its athletes still win the medal counts in most Olympiads, the US fans would not watch the Games as closely if their team were 'handicapped' by reduced IOC funding. The USOC argues that the reduction in IOC funding would not be miraculously replaced by an influx of government support. Mechanisms allowing government support do not exist in the US, unlike other countries. Instead, the USOC argues that many US athletes would simply be unable to compete, thereby reducing the overall size of the US Olympic team and, arguably, athlete quality, which would damage the Olympics as a whole. Skeptics of the USOC's position find it hard to believe that the US would be unable to justify or find some level of government support. Of course, the current political climate in the US suggests receptivity to government support of the US Olympic team is remote at best. The issue remains unresolved and appears likely to stay at an impasse for the foreseeable future. An unfortunate by-product is that it is unlikely any US city will be a viable contender to host an Olympics for a long, long time. 

A Lot Can Happen in 4 Years...

A Reuters article today discussed the rapid rise of social media (no surprise) as it relates to the Olympics and sponsors. It is interesting to note that in 2008 Facebook had 145 million users (according to the Reuters article). As various reports show, Facebook has between 800-900 million users now. That's a huge change and sponsors are taking advantage of this far more aggressively than ever before. Samsung's U.S. Olympic Genome Project is just one example--users' Facebook profiles are used to show their possible connection (however distant) to Olympic athletes (think 6 degrees of Kevin Bacon). Genome users can also access an Olympics knowledge base, plus learn about new products. Samsung's effort is by no means the only example, but it is certainly novel. With respect to broadcast, the 2012 edition of the NBCOlympics.com website represents the first time in broadcast history that the Olympics will be broadcast live (no more tape delays!) through a combination of traditional broadcast digital, streaming and social media. While statistics are not yet finalized about social media usage during the Winter 2012 Youth Olympic Games (YOG) in Innsbruck this past January, statistics from the first Youth Olympics Games in Singapore in 2010 show the potential for the platform to reach fans. There were more than 70,000 Facebook fans for the 2010 YOG. Weibo, a Chinese Twitter-like service, had more than 1 million followers. The total social media reach was over 260 million people, and the market value of this media coverage was approximately $45 million. The user statistics for other online platforms, such as YouTube, also showed promise. TOP sponsors (The Olympic Partners) are not unaware of the potential represented by social media, but the dramatic rise of the social media user base is ahead of most sponsors' usage of this same media. Certainly Samsung, among others, is jumping in quickly and will learn a great deal in the process. But this is unquestionably a fascinating and challenging time to be a marketer because the pace of change is outstripping the ability of most companies to effectively use social media (effectively), and the name of the game these days in marketing is capturing as much real estate or, more accurately, users as possible so that they are able to interact directly with brands. Sprinting is not just for the athletes, as it turns out.

A Contrast in Styles

In 2008 Beijing Olympic officials worked hard to prevent protests from interfering with the Torch Relay and the Games themselves. The Torch Relay, nevertheless, faced protests, primarily from human rights groups vocalizing their anger about China's Tibet policies and, despite China's best efforts (and a phalanx of security officers that ran alongside the Olympic Torch), the 2008 Relay route was modified somewhat as a result. In an article in today's Guardian London officials are taking a decidedly different tack-they are choosing to ignore protesters. Or, more accurately, to let them protest, even saying protesters have every right to express their opinion. LOCOG officials do suggest that if fans are prevented from enjoying the Olympics due to protests, then protesters will be dealt with quickly, although what that exactly means is unclear. London's philosophy is simple: by not making a big deal out of the protests, protesters lose the Olympics as a stage to present their issue. Protests are inevitable in most Olympic Games, so it will be interesting to see if London's relaxed attitude works.

The Challenge of Managing Political Tensions at the London Olympics

Over the years, previous Olympiads have been a platform for those interest groups wishing to raise the visibility of their chosen political cause since the global viewing audience is huge. In The Olympic Games Effect I analyze host city dynamics, including political challenges. A different type of political tension is sorting itself out in London, as LOCOG and British government officials in the Home Office and Department of Culture clash, mostly behind the scenes but increasingly in public, over the uses of £1 billion in public money (re: taxpayer money) allocated for LOCOG's operating needs. As reported in The Telegraph, a key source of the tension has been the significantly under-estimated security costs for the Games, which needed an additional £271 million to deliver on the number of security guards required to ensure safety. The increased security costs are not the only source of tension. Inevitably, as the Games grow closer, the pressure to deliver a world class event with minimal problems increases, which heightens tensions among the various parties responsible for the Olympics in both the public and private sectors. LOCOG officials, led by Chairman Sebastian Coe and CEO Paul Deighton, are under pressure from government officials and private watchdog groups to be more transparent in the management of the Games. The transparency issue has arisen specifically with the ticketing strategy, and the security budget snafu only added to the concerns. The tensions are exacerbated by internal conflicts in the British government between the aforementioned Home Office, which seeks a more direct role in working with LOCOG, and the Department of Culture, which has a coordinating role, over essentially who is in charge. Keep in mind that both the public and private officials and organizations responsible for delivering the Games are trying to coordinate among more than two dozen major government departments, agencies, private sector groups, local government authorities, volunteers, and more. This is not a task for the faint of heart, nor is it unusual when preparing for the complex nature of the Olympics Games. Nevertheless, the rising political tension in London is undoubtedly something Olympic organizers would prefer not be as visible as the Games approach. 

The London Olympics Colors

London Olympics organizers will be asking citizens located in or near key Olympic competition areas to plant flowers based on the the colors in the 2012 London Olympics logo (the jagged, controversial logo designed by Wolff Olins and unveiled in 2007). Those colors are magenta, green, blue and orange and the Games organizers believe emphasizing these colors anywhere and everywhere possible will help make the 2012 Olympics visually memorable to visitors and viewers. Requesting such cooperation from citizens is easy, but getting locals to follow through is a bit harder. Assuming an additional amount of national pride bubbles up in the coming months, one can imagine Britons doing their patriotic duty by planting Olympic-influenced flowers. Viewed through the lens of business branding, coordinating colors around the main Olympic venues will certainly help create a consistent look for the Games. It will be interesting to see whether Britons in other parts of the country also step up to reinvent the classic English garden to honor the Games.  

MPs Are Fans of London 2012 Beach Volleyball?

Last week a blog in the Guardian called 'What's the allure of beach volleyball for politicians and civil servants?' questioned the actual interest of MPs (Members of Parliament) in the sport. With 410 tickets purchased for the beach volleyball matches commencing on July 28 versus only 246 tickets purchased for athletics the MPs appear to have voted with their pounds for their favorite Olympics sport. The article suggests indirectly that the MPs real interest is due to the minimal outfits beach volleyball athletes wear. An alternative explanation is that most of the volleyball matches fall on a weekend, a far more convenient time that does not interfere with their weekday governmental responsibilities. The article pointed out that former President George W. Bush watched some of the beach volleyball in Beijing in 2008, even gently slapping Misty May-Treanor across her lower back (she had offered him to slap her backside-a traditional way beach volleyballers congratulate one another after a successful point, but he wisely declined...). Whatever the reason for beach volleyball's popularity, it is great to see the sport garnering so much attention. With the 15,000 seats nearly sold out for London 2012, it is clear the sport has developed a fan following after being introduced to the Olympics in 1996. The athletes are remarkably talented, the sport is exciting, and the physical challenge is clear (anyone who has run on loose sand, let alone jumped around on it for a few minutes will quickly understand why beach volleyball is physically very demanding). As I discuss in my new book, The Olympic Games Effect, the IOC (International Olympic Committee) regularly reviews the entire program after each Olympiad, determining which sports to drop or add. By updating the Games incrementally to stay on top of sports trends, the IOC is able to help keep the Olympics fresh and relevant with new offerings while also maintaining the fan interest in core sports like athletics, swimming and gymnastics. I will give the benefit of the doubt to the MPs and assume they doing their best to support their home Olympics by viewing whatever sports they can while still attending to the affairs of government.

Winter YOG 2012

It has now been 1 week since the Winter Youth Olympic Games in Innsbruck ended. A quick web search will reveal many wonderful performances from young athlete's around the world, including women's half-pipe gold medalist Hikaru Ohe of Japan. Yet how many of you were even aware the Winter YOG took place at all? As I discuss in my new book, The Olympic Games Effect, the YOG is designed to bring the youth of the world together to participate in sport, education and culture while living by Olympic values. This is an admirable ambition, but not enough people know about it. Granted, the YOG is a new mega-sports event, leveraging off the success of the regular Olympics, so there may be confusion about what makes it unique. Also, new sports brands are not built overnight. But a more aggressive marketing plan needs to be developed to build awareness about the YOG overall, and to clearly describe the factors that make it unique as compared to the regular Olympics. The winter sports TV, social media, and print coverage in the U.S. discussed the just concluded Winter X Games. While the Winter X Games were established in 1995 and therefore have had time to grow, the YOG has its work cut out for it in the years ahead if it wants to craft a compelling event worthy of Olympic stature while building a global fan base.

London 2012: Despite Tough Economy, Glimmers of Optimism

The economy continues to struggle in much of the non-Asian world, and the UK's economic austerity program does not appear to be helping. The National Institute for Economic and Social Research (NIESR) said that the UK won't return to 2008 growth levels until at least 2013, a 5 year period of lost opportunity. Unemployment has risen (again) in the UK as well over the past few months. The NIESR states that additional stimulus is needed, or the situation is unlikely to improve. And, of course, the political climate in the UK suggests such a stimulus is unlikely. In the midst of these challenging times, questions about the costs of the forthcoming 2012 Olympics are inevitable. But should the tough economy cause government planners and the London Olympic Committee to scale back plans, or even cancel the Games? According to a BBC blog by Roger Mosey (the BBC's director of London 2012), the answer is no. As he states, the "prospect of a 2012 with the Olympics in London is still a better prospect than one without." As I point out in my forthcoming book The Olympic Games Effect, hosting an Olympic Games is a daunting, complex task with potential benefits that rise above pure economic gain. While not all host cities generate sustained economic benefit (indeed, many of the Economic Impact Studies produced during the host city bidding process often overstate the actual economic gains), there is evidence that suggests a well-coordinated host city strategy comprised of pre, during, and post Olympics phases that actively plans for leveraging the investment for years afterward, can stimulate a sustained and positive outcome. There is also evidence that the Olympics serve to lift the spirits and infuse a collective sense of societal optimism for both the host nation and countries around the world. Does this mean that London 2012 will inspire an economic turnaround in the UK? The Olympics alone cannot accomplish such a Herculean task, despite the Games' reputation for inspiring super human performances. But cutting back London's Olympic investments (effectively creating an 'Olympics lite') would send a far more severe, negative message about the UK, the Olympics and the economy as a whole. Part of what drives market behavior is a sense of confidence, and ensuring the 2012 London Olympics are given every chance to succeed will help build confidence, which is certainly a vital task in stimulating economic activity.