What the World Cup means (and could mean) for business

via Google Images

via Google Images

An article this summer from Web Newswire.com written by Creative Strategies, a CSR strategy firm based in Brussels, discussed the impact the World Cup would have for business, not only in South Africa, but around the globe.

The article noted that by the time the games kick off, R20.5 billion (2.83 billion USD; 1.765 billion GBP) would have been spent on infrastructure projects such as the building of 5 new stadiums and the refurbishment of 5 others, major civil engineering projects such as improving roads and transport systems, and developing the Johannesburg Rapid Transit System linking Johannesburg and Pretoria.  They estimated that around 368,000 jobs (at least temporary jobs) would have been created during the build up to the games.

And during the games, tourism predictions are for inflows of up to 480 000 visitors, spending R 9.3 billion (1.29 billion USD; 800.6 billion GBP) in-country during the event.  This is not an insignificant amount when considering South Africa’s gross domestic product (GDP) for 2008 was $277.2 billion USD, according to the CIA Factbook.

Further economic predictions are that the national GDP will be boosted with at least R51.1 billion (7.07 billion USD; 4.4 billion GBP) for the period 2006 to 2010, sustaining 196,400 jobs. A further R7.2 billion (996.4 million USD; 620.6 million GBP) is expected to flow back into government coffers in the form of taxes and revenue.

These predictions are great but as I’ve discussed before, economic impact estimates for events like the FIFA World Cup and the Olympics are often exaggerated in order to “sell-in” the games and they rarely ever deliver the impact that’s promised.

However, ticket sales should be a fairly predictable and real representation of economic impact – I would imagine that ALL games will be sold out; ticket sales alone are estimated at R3.2 billion (442.3 million USD; 275.5 billion GBP), and I’m proud to report that we’ve made our contribution to bringing these estimates to reality.  But it is difficult to make tangible predictions about the impact that will be made in other areas such as tourism, hospitality, merchandise sales, etc.

But the most intriguing part of the article, and is a view I very much share, is what the authors wrote concerning the long-term economic impact the games should and could have for South Africa, and the view businesses should take with regards to the games.

The authors wrote:

For many businesses the true value of 2010 is clearly not to be found in the 33 days of the event itself. Yes, those in tourism, hospitality and sport must surely reap the rewards richly during those frantic days, but a longer term vision is required to truly benefit from the event. The fact of the matter is that when the games are over and everything returns to normal, ‘normal’ would have been redefined, and those who have best read and exploited the dynamics around the event will be the long term winners.

I wholeheartedly agree with this last sentence.  The corporations and brands (international or local) that best position themselves in the mind of viewers and consumers before, during, and after the games (and long-after in my opinion) will be the real winners in the Southern Africa and potentially continent wide market, after the rest of the footballing world begins to make their preparations for Brazil 2014.

The authors goes on to ask the question: “where should businesses who are not direct beneficiaries of the event i.e. sponsors) focus their attention?”

One area the authors point out is:

Innovative public relations and marketing campaigns: These have to be designed and launched to attract both the high number of visitors as well as the 40 billion television viewers across the globe to portray this country as an attractive destination for tourists, businessmen and sports people alike.

This last point is important in my view.  While brands, corporations, the tourism industry, retailers, etc. will want to capitalize on the in-country tourism and the rands that will be spent; marketers must not lose sight of the 40 billion estimated global TV viewers, a good portion of which will be viewers from other African nations who may likely be more receptive to a brand who appears to be engaged in South Africa and the region for the long term.

It will be very interesting to see who (brands, corporations, product lines, etc) emerges as economic powerhouses in South and southern Africa in the years following the games, and if one will be able to make a direct link to the way the company, brand, etc. leveraged the games (or not) for long-term planning.

Economists and social scientists:  here’s a potentially intriguing research topic; to measure the pre- and post games economic impact (market share, sales, etc.) of a handful of corporations in relation to their investment before and during the games.


Corporations and sponsors: here’s further fire to the argument that marketing and CSR, if done earnestly, could help position you for long-term success in Southern Africa and the continent as a whole.

A lot to think about.

For full article go here: http://www.webnewswire.com/node/458405

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One Response

  1. […] article is a re-post from an October 15, 2009 post on my blog.  Particularly read the below post in light of Sab’s October 31 post on “Another […]

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