Grayling Blog

Bread and circuses: Winning the world cup and the brand ‘Spain’

Posted on 26.07.2010 by Bart Wauters

Spain has won the world cup: in a country where soccer is the undisputed king of sports, the party after Andrés Iniesta’s goal lasted for several days. But the hangover is followed by cool calculation: will the world cup finally be able to stimulate Spain’s sluggish economy? It might well be possible. Victory leads to optimism. And confidence is an important economical driver: when people believe in the future, they are willing to invest and consume more, and these expenditures eventually drive growth. According to some soccernomics experts, GDP will therefore experience an extra growth of no less than 0.7%! However, the euphoria for winning the world cup might well be of short duration. Marketing experts know that there are only 72 hours to maximize momentum and take advantage of the effect of victory on consumer behavior. After that, consumers return to their old pattern and the fact is that with an unemployment rate of 20% and a flat GDP growth, it remains to be seen whether the Spanish start consuming again.

But even if we concede that the world cup has no immediate effect on the economical cycle, the long term effects might be very positive because of the recovery of the brand ‘Spain’ after months of international speculation about a second ‘Greece’. The reinforcement of the brand ‘Spain’ is excellent news, first and foremost for the vital tourist industry, with visitors obviously preferring to visit a champion instead of one of the PIGS. But it is likely that also Spanish multinationals from other sectors such as Telefónica, Banco Santander, Inditex (Zara), Ferrovial and Iberdrola will benefit from the recovery of the image of Spain. Even if some of these companies do not actively position themselves as ‘Spanish’ when doing business abroad, winning the world cup will certainly not harm their reputation. If on top of the victory in the soccer championship, the country succeeds in leveraging other sports champions as well – Rafa Nadal in tennis, Fernando Alonso in F1, the world champion national basket ball team, soccer clubs Real Madrid and FC Barcelona, and many more – the brand ‘Spain’ could win in importance even further, and might eventually become an asset for Spanish companies doing business abroad. Or how bread and circuses do contribute to reputation enhancement and, eventually, to growth.