Why London 2012 is about the money, money, money

Could Mark Ritson have spoken too soon when he voiced his incredulity at Locog’s abilities?

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In previous columns in the run-up to this 30th Olympiad, your humble columnist may have given you the impression that he had no confidence whatsoever in the ability of Locog to run a successful Olympic Games. Clearly, my lack of faith was entirely mistaken and everyone working for Locog is a total genius.

While I still maintain that Wenlock, the Games’ mascot, looks like a male appendage and that Locog’s ridiculous pre-Game restrictions on the use of the Olympic logo were thoroughly self-defeating, all that has now been swept away in a haze of glory and brilliantly executed event management.

But was it all worth it?

I ask this question not in a rhetorical manner or with even with the faintest hint of cynicism. If I was a columnist for The Times or The Sun I’d be shovelling on the platitudes and stretching the metaphors to breaking point this week. But this is Marketing Week and, like all good marketers, I must turn my attention from the amazing experiences of the past two weeks and towards the thorny issue of return on investment.

You can’t be a decent marketer without being able to demonstrate ROI. Cliché-ridden, old school marketers at this point will defer to John Wanamaker’s famous inability to work out which half of his marketing budget was working. Well, Wanamaker should have been fired because any decent brand manager can show you that the investments they have made in marketing are indeed producing the promised results or they should not be given the money in the first place.

With the execution box well and truly ticked, the big question we should be asking of London 2012 is whether it will generate sufficient ROI. We know what the ‘I’ is: the Games cost the UK taxpayer a grand sum of £9bn. The more vexing question is whether we’ll get a suitable ‘R’ from this amount. To do that we must follow the tried and true approach to ROI calculation.
First, we have to detach from all the emotional stuff. There are too many marketers who lose themselves in the punch of their ad campaign and lose perspective on the strategy behind the communications. So put the Spice Girls, Mo Farah and all those fireworks to one side. Consumers are meant to lose themselves in an event, marketers stay behind the curtain and keep an eye on all the joysticks.

Public support for the Games rose to 55 per cent but how enduring will that support be over the coming difficult economic months?

Next, we have to review the strategic rationale that drove the investment in the first place. This is a hard one for London 2012 because people had very different priorities for the Games.
For prime minister David Cameron, the Games were designed to bring the nations of the UK closer together. “It’s a Britain where English, Scottish, Welsh and Northern Irish compete in one team and drape themselves in one flag,” was his triumphant conclusion on Monday. For London mayor Boris Johnson, the Games were, not surprisingly, about asserting the supremacy of London as the premier capital city: “London has put on a dazzling face to the global audience. For the first time since the end of the empire, it truly feels like the capital of the world.”

Culture secretary Jeremy Hunt was more practically concerned with public perception of the event and the degree to which Brits believed this was “everyone’s Games” and worth the huge cost.

You can always spot a good marketer because not only do they have clear objectives, they have also measured the pre-existing and post-activity levels that their campaign was designed to target. There is no point aiming to build brand awareness and measuring it after the execution if you didn’t measure the level before you began.

We will have to wait for the data that demonstrates that, post-2012, the UK is a more harmonious nation and London a more dominant capital. But we can examine Hunt’s stated objective because we have both benchmark and outcome data for the public support for the Games.

Four months before the Games began, only 40 per cent of the British public believed the Games were worth the expense. That figure had risen to 55 per cent on the Friday before the Games ended, according to an ICM poll for The Guardian. While that’s an impressive attitude shift, it’s likely to be the zenith of public support. And how enduring will that support be over the coming difficult economic months and years ahead now that the UK has spent the money on its golden fortnight?

The final, and most important part of the ROI calculation is the opportunity cost. Of course the 2012 Games have been good for the UK. The key question is whether the £9bn could have been spent in a better manner for the good of the country. To put it more bluntly, was it worth spending millions on an event to celebrate the NHS in Danny Boyle’s amazing opening ceremony or would that money have been better spent supporting some of our ailing hospitals?

Jessie J might have sang on Sunday night that “It’s not about the money, money, money” but she entered the stadium in a Rolls Royce paid for by the British taxpayer. I ask again: was it worth it?

Readers' comments (10)

  • A Rolls Royce paid for by the taxpayer, do me a favour....that comment alone leads me to believe you are talking utter nonsense...

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  • Mark, one can sometimes be too analytical and miss the big picture. The scale of the global platform for all things British from sport to culture was gigantic. Seeds are now planted within incalculable numbers of memories from Aberdeen to Zanzibar. Over time these germinate into all kinds of dividends to "I am going to live there one day" or "given a choice I will buy British cos it's kool"....we don't know what kind of filters each person applied to taking in what they heard & saw over many cultures, but that's not bad. Precious brands emerge after decades of interaction with various markets, so don't let the holy grail of "ROI" be the ultimate benchmark. Emotion is a very powerful attraction in marketing and buyer choice. I go for e-Motion over cold ROI when it comes to many choices. Every human has that ability. As Marketing folk we should handle that powerful tool with great imagination.

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  • Unless you know different Mark I would suggest that the taxpayer didn't pay anything for the Rolls Royces appearing in the closing ceremony. They would have been provided by BMW free of charge as a title sponsor, to maximise their ROI on the huge outlay made to be Official Automotive Partner of the 2012 Games.

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  • Wonderfully contrary article from the man that paints sponsorship as the whimsy of the vain and feckless. Not 100% sure that the British taxpayer actually stumped up for the Rolls Royce for Jessie. More likely the automotive sponsor brand that owns Rolls Royce paid to have their vehicles used. Sponsorship 101.

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  • To be fair, the Rolls Royce was likely to have been supplied by BMW (who've done a good job side stepping the no advertising in the stadium rule) as part of the sponsorship, but the sentiment still stands.

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  • How you will ever begin to truly assess the ROI is daunting and bewildering. As Mark rightly says, it's not just about the two-week feel good factor, rather these Olympics 'should' hopefully leave a lasting legacy for Britain (for fear of sounding like Lord Coe). This may take 10-15 years to realise. If a load of 10 year-olds have sat down in front of the TV over the last few weeks, been caught up in the joy and excitment the games have brought and thought, "I fancy trying a bit of running/jumpting/cycling/swimming/etc", and as a result we see more kids taking part in meaningful, organised sport/recreation, thereby contributing to the building of greater communities, and improving the average health of the nation (less burden on the NHS, etc), and subsequently a few of them become our heroes of the 2028 Olympics, and in turn thus inspire the next generation to do the same, then surely it would have been worth it - but I wish the best of luck to anyone who has the task of measuring/quantifying that value returned, that started from the investment in the 2012 Games in London. Of course, nothing may ever change, we continue as we were, and write the whole thing of as an excessive two week party...but again, how you could conclusively back this view point up with cold hard stats/figures is beyond me.

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  • Like any big investment I am sure the objectives and aspirations were outlined and agreed before entering the deal.
    Being that Boris, Dave or Jeremy Hunt were not in their roles at the time I am pretty sure they have post rationally aligned their perceived objectives to look good. I am sure Mark would always want clarity to ensure the correct ROI is measured so I find it strange he has used those examples in this regard to try and prove a pretty moot point.
    As has been pointed out above this is a long term investment in the country and London which seems to have got off to a pretty decent start.

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  • Good article but agree it will be hard to quantify all benefits e.g. infrastructure, health etc. What's really struck me is that we give £125m a year to fund elite sports people and have had such a successful games for Team GB. Doesn't that seem such a small amount compared to the billions in recapitalising banks, and funding the games itself. That to me is a serious ROI.

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  • Much of the £9bn went on urban regeneration and that is investment, not cost. Sometimes you just need to side-step the ROI issue. The question may well be what will be the multiplier effect of all those people that participated, performed, spectated and watched who have come away with a warm and positive feeling about themsleves and what the UK is capable of achieving - that's a long-term effect that I wouldn't be wanting to measure for a long time yet.

    Always enjoy your challenging pieces...keeps the mind working...

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  • Though generally in agreement with Mark on most of his viewpoints, I tend to disagree with this article. ROI is good, not god. As others commented above, I have serious concern on the ability to compute such a metric. To gain some "weight", I mention I do have a strong statistical background, lots of years spent in modeling and pretty large budgets spent with my approval or supervision in social research. If anyone attempts to proceed in such a calculation saga, may I help with just a few ideas? My kid liked the music and will probably buy a CD or download a song from one of the British artists she saw on TV. She may also go to a movie with James Bond, trading off against another option she might have at that time. Few of my friends would like to travel to Britain next year (that means spending more that the hotel, right?). Other friends decided to run the London marathon in 2013, instead of Berlin. My young cousin started to read more books from British writers. My neighbour's son received a t-shirt with the London Olymplc he loves! With no clear clue, 8 years from now he will decide to go to an university in the UK. And that's for my country only. What about all the world? Will all these be counted? Should we run a global research to prove anything? If anyone does have such a budget, my honest opinion is that its results may vary from A to Z, because of the many pitfalls it will face. And because not everything in our living environment - especially when it comes to future behaviors - can be quantified. Actually, it can (and we may even use term like "scientists" or "experts" also) but will reality be as predicted? Allow me to share my doubts on such an attempt...

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