BERLIN: Sportswear firm Adidas probably thought it had hit the marketing jackpot when Adidas-sponsored Germany beat Adidas-sponsored Argentina to win the Adidas-sponsored World Cup.
But arch rival Nike may have stolen much of its soccer branding thunder with quirky videos, innovative boots and amusing Tweets, not to mention the odd sponsorship coup of its own such as signing up hosts Brazil.
Know more: Nike beats Adidas in World Cup teams battle
Adidas said it had secured “victory on and off the pitch” at the soccer tournament, providing the highest-scoring boots and generating 22 per cent more discussion on social media than Nike.
But more than half the players displayed Nike’s brightly-coloured shoes and it was one of Nike’s new lightweight “Flyknit” boots worn by Germany’s Mario Goetze that volleyed in the winning goal.
Nike has been eating into its German rival’s market share and some branding experts and investors don’t believe throwing more cash into marketing will necessarily fix the problem.
Instead, Adidas needs to spot and set more trends and create a buzz among fashion and sports-mad youngsters.
“At the moment, Nike is cool, very cool. If you ask a 20-year-old, they are not going to pick Adidas right now,” said Tammy Smulders, head of marketing consultancy SCB Partners.
“It is not as easy as just writing a cheque. They need to be doing more of the viral, underground activities which brings out the cool factor of the brand.”
After recently issuing its third profit warning in a year, Adidas said on Thursday it would boost spending on marketing to about 13pc of sales in 2014 and to between 13 and 14pc of sales in 2015.
The company also said it would give marketing experts more responsibility and bring them closer to sales and product development staff.
Adidas spent 12.4pc of its 2013 revenue of 14.5 billion euros ($19.4bn) on sales and marketing, up from 12.1pc in 2012 and already well above Nike, which spent 10.8pc of sales of $27.8bn in the year to May 31.
Adidas chief Herbert Hainer admitted the company, known for its three stripes logo, was being taken on even on its home turf. But he said second-quarter results - including double-digit growth in Germany, Britain, Spain and Italy and a 41pc jump in soccer sales - showed Adidas was fighting back.
While Nike can focus on its “swoosh” logo and the “Just do it” slogan it has used since 1988, Adidas has to spread its ad budget across a range of brands such as Reebok, TaylorMade golf and Rockport shoes, as well as its Originals and NEO sports-inspired fashion labels.
“They are fighting fires everywhere. Pouring money into marketing might put out some fires, but they will continue to burn elsewhere,” said Ingo Speich, a fund manager at Union Investment which has a 1.2pc stake in Adidas and has repeatedly criticised management in recent months.
While Nike has encroached on Adidas’s home territory, the German firm has failed to make serious inroads in North America. The US firm extended its lead to take a 15pc global market share in 2013 compared with 10.8pc for Adidas, according to Euromonitor.
Nike has focused on exploiting social media to target young consumers, while Adidas has relied more on official partnerships with the likes of the FIFA World Cup and the National Basketball Association (NBA).
Nike’s animated film “The Last Game”, featuring soccer stars Cristiano Ronaldo and Neymar on a quest to save football from the hands of a villainous mastermind, has become one of Facebook’s most shared posts ever.
The value of the Nike brand rose 13pc in 2013 to $17bn, making it the world’s 24th most valuable brand, according to consultancy Interbrand, more than double the value of Adidas on $7.5bn.
Published in Dawn, Aug 10th, 2014
