Nation Branding Explained

By Lee Hudson Teslik
Assistant Editor
Council on Foreign Relations

Introduction

It’s nothing new for nations to care about image, but the past ten years represent a turning point in the methods states use to manage their reputations. In many cases, governments now hire public relations firms and apply brand management theory—formerly the domain of corporate communications departments and business-school seminars. New metrics attempt to quantify the strength of national brands, and the field has seen a veritable explosion of literature on which branding techniques work and which don’t. Meanwhile, branding efforts have branched out well beyond simple efforts at attracting tourism. Countries now hire firms to help them launch sophisticated branding campaigns aimed at luring foreign investment, facilitating trade, improving private-sector competitiveness, or even securing geopolitical influence. Amid the rush, however, questions are beginning to emerge about the ramifications of nation branding—not least the potential harm it could render if countries assume they can whitewash bad policy with good public relations.

What does “nation branding” mean?

Very simply, it means applying corporate branding techniques to countries. Similarly, experts in the industry refer to “place branding” and “city branding.” Simon Anholt, who edits a journal on nation branding and advises countries on how to strengthen their national brands, says in this CFR.org interview that two main concepts separate new forms of nation branding from more traditional forms of public diplomacy. First, Anholt says, nations have become far more cognizant of the value of their brand as an asset. Understanding valuation helps countries better understand the investments they make in their image. For instance: To what extent does a catchy slogan help attract foreign investment? How about a national radio station? As researchers work to better quantify the answers to questions like these, countries see the possibility of more efficiently investing in their futures. The second major change, Anholt notes, is a focus on the behavioral aspects of managing a nation’s image. He suggests officials from government, nonprofits, and the business world can better collaborate to make sure the messages a country is putting out represent what they view as “the fundamental common purpose” of their country.

How big of a field is nation branding?

Determining the total breadth of nation-branding consulting is guesswork, given that the firms that consult for countries do not publicly reveal how much they charge their clients—or even that they have a contract in the first place. Also, there are problems with definition. If you count tourism advertising, direct investment outreach, or communications as “nation branding,” the estimated size of the industry skyrockets. Anecdotally, at least, interest in nation branding has entered a boom period. Anholt says he gets requests nearly every week from a country or city government seeking advice on branding campaigns. As recently as half a decade ago, he says very few countries showed this kind of interest. Joshua Fouts, the director of the Center on Public Diplomacy at the University of Southern California, says he has seen major escalation in interest in nation branding just in the last two years—and particularly in academic research within the field.

Thomas Cromwell, who runs East-West Communications, a nation-branding consultancy, says individual nations’ contracts for branding projects range into the millions of dollars. Those levels pale compared to what some corporations pay for their most exorbitant marketing campaigns—the pharmaceutical firm AstraZeneca, for instance, spent $1 billion marketing a single drug—but national expenditures on marketing are rising, Cromwell says. Still, he hesitates to estimate the overall extent of nation branding globally, noting that in each country, expenses are spread among many different ministries.

How do you measure the strength of a nation’s brand?

The Nation Brands Index, a project run jointly by Simon Anholt and a polling firm called Global Market Insite (GMI), is the only major source for numerical data on the relative strengths of national brands. Every three months, Anholt and GMI record the opinions of consumers in thirty-five different countries, mainly in developed markets, tracking their perceptions of several different aspects of a country’s image. Anholt divides the idea of nation branding into six main subfields. These are: tourism, exports, governance, people, culture and heritage, and investment and immigration. The poll asks several different questions in each category, establishing subfield ratings that are then compiled into a single numerical index. The goal of this index is to give an overall sense of the strength of international opinion on a given country, positive or negative. This system does not meet uniform approval. Cromwell says he finds the Nation Brands Index’s methodology “pretty weak,” noting the enormous undertaking it would require to comprehensively understand global perceptions through polling data. Still, he concedes that there isn’t much else to go on at this point. He points to foreign direct investment, tourism arrivals, and trade levels as potentially useful metrics.

What are countries doing to improve their brand ratings?

The vast majority of countries now work with communications consultants or PR firms, though the specific kinds of guidance they seek depend greatly on the circumstances faced by the country. Some branding campaigns seek to improve the competitiveness of a nation’s exports by linking them to positive preconceptions of the country. Peter van Ham, a branding expert at a Dutch think tank, highlights some examples in a 2001 Foreign Affairs article: “Hermes scarves and Beaujolais Nouveau evoke the French art de vivre; BMWs and Mercedes-Benzes drive with German efficiency and reliability.” A nation’s companies can then feed back into the country’s brand image, van Ham notes. “Microsoft and McDonald’s are among the most visible U.S. diplomats, just as Nokia is Finland’s envoy to the world.”

In an interview with CFR .org, van Ham, who now consults for The Hague, the European Union, and the North Atlantic Treaty Organization (NATO), notes the rise of another kind of brand marketing: “investment branding.” Countries promote their infrastructure, favorable tax structures, or other incentives in an effort to lure foreign investment. Some countries also promote their financial markets in an effort to increase their standing as a financial hub.

Other countries focus on different areas. Tourism promotion has traditionally dominated nation-branding efforts among developing countries. Australia, which the Nation Brands Index recently cited as the country with the strongest brand, profited greatly by establishing an adventurous image through international television shows and movies, perhaps most notably the 1986 film Crocodile Dundee.

How successful are these branding efforts?

The successes of nation-branding projects depend on a number of factors—but most basically on the quality of the product the country is trying to sell. Commonly cited success stories include post-Yugoslav countries like Slovenia and Croatia, which launched aggressive marketing campaigns following their respective secessions, emphasizing scenic venues and a definitive cultural break from Belgrade, the Yugoslav capital. These campaigns proved wildly successful and both countries emerged relatively quickly as tourist destinations. Tony Blair’s “Cool Britannia” campaign—which came to stand broadly for shifting political paradigms in a liberalizing country—also stands out. Part and parcel of that campaign was the decision to encourage people to refer to the nation as “Britain” rather than the anachronistic “Great Britain” or the more formal “United Kingdom.”

But van Ham notes other countries that have been disappointed with branding campaigns. Switzerland, he says, met limited success with a branding campaign it launched following a row in which Swiss banks were publicly accused of holding Nazi gold. The country worked with a branding firm, but eventually abandoned the effort, he says. Another example van Ham notes is Belgium, which gave up on a branding campaign after not seeing rapid progress. In these specific instances, Van Ham doesn’t blame the branding campaigns, but rather the countries, saying they showed a lack of patience. “It’s like watching a flower grow,” he says. “Policymakers don’t have the patience, and politically they don’t have the time.”

Branding campaigns fail for other reasons as well. Cromwell says branding a country successfully requires collaboration of many of the senior-most figures in the country—both in government and the private sector. “It really requires a partnership on a very, very high level,” he says. “You need someone who can get the ministries to work together.” Without this kind of communication, Anholt says a nation’s many brands can work at cross-purposes: “You have the tourism board saying how wonderful the country looks and how welcoming the people are. You have the investment-promotion agency saying almost the opposite, that it’s super modern and full of cars and roads and railways. And you have the cultural institute telling everybody how wonderful the film industry is. And you have the government occasionally doing public diplomacy, and perhaps occasionally attacking its neighbors. They’re all giving off completely different messages about the country.”

What does the rise of nation branding mean for foreign policy?

Anholt says the rise of interest in nation-brand-focused consulting is “potentially a very dangerous thing.” He notes the easy allure for countries to think they can simply pay somebody to fix problems that are in fact caused by bad policy. “I don’t tell countries how to do marketing,” he says. “I advise them on what sorts of policies they need to undertake in order to earn the reputation they feel they deserve.” He adds that consulting practices can be particularly dangerous in cases where governments don’t have a sophisticated sense of what they are getting into. These countries, he says, make “rather easy victims for a lot of the communications consultancies who will go along and show them an attractive slogan or a nicely designed logo and will sell it to them for an enormous amount of money.” In addition, experts note the risk that a misguided country might choose to invest in public relations efforts at the expense of economic development or other more tangible reforms.

With all these caveats, there are also plentiful benefits to be gained by countries that successfully embrace branding techniques. USC’s Fouts says one positive upshot of nation branding is the way it gets smaller countries “involved in the global conversation.” He specifically highlights Ghana, which he says ought to be able to find a valuable niche clientele, globally, given its vibrant arts and music culture. Fouts stresses the role creative use of new media and new technology can have as smaller, less wealthy countries work to broadcast their strengths to the world.