Soca Warriors Online Discussion Forum
Sports => Football => Topic started by: Augi on March 28, 2006, 11:19:39 AM
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Adidas' World Cup Shutout
Stanley Holmes
BusinessWeek April 3 2006
U.S. fans of soccer's big event will see only Adidas ads on TV. Nike's response: A MySpace-style site for soccer nuts
In new Adidas TV ads, U.S. soccer star Pablo Mastroeni and Mexican soccer standout Jaime Lozano have three hours to recruit amateur players from the streets and beaches of Los Angeles. Their goal is to form one team of U.S. players and one team of Mexican-born players to square off in a sandlot soccer game. The ad, one in a series, is meant to capture the high-octane international rivalries that will erupt starting on June 9, the kick-off of FIFA World Cup Soccer. But all that competitive tension is nothing compared with how the company behind the ads, Adidas Group, feels about soccer when it comes to its nemesis, Nike Inc. (NKE ). Advertisement
In the latest escalation of this decades-old rivalry, Adidas is pumping big bucks into soccer, the only category in which it leads Nike, to try to close the overall gap between the two companies. Over the next few months, Adidas is spending about $200 million to market all things soccer. Shoes, boots, national team jerseys, soccer balls, and more are featured in the ad campaign, dubbed "+10," which revolves around the idea that one player plus 10 others equals a team.
The World Cup's global TV and Web audience is bigger than the Olympics' or the Super Bowl's -- 28 billion in-home viewers worldwide. Adidas is an official sponsor and paid for the rights to shut Nike out of TV advertising in the U.S. for all 64 games. It's vital for Adidas "to dominate the World Cup," says CEO Herbert Hainer.
LEADING IN JAPAN
Hainer has some momentum, but he's under pressure to deliver more. After spending $3.8 billion to buy Reebok International last fall to boost Adidas' women's business, Hainer must prove the deal was more than a market share grab and integrate the companies smoothly. Meanwhile, Adidas, based in Herzogenaurach, Germany, has made gains in baseball and basketball in the U.S. and abroad. Its soccer business is growing in Europe at Nike's expense, and overall sales in Asia are rising faster than those of the U.S. sneaker giant. Adidas' global share of the branded footwear market is 34%, vs. Nike's 38%, according to NPD Group. But Adidas has surpassed Nike overall in Japan. Even its once-prosaic advertising, which paled in comparison with Nike's iconic spots, has given way to cinematic, edgy ads such as the World Cup campaign and spots featuring superstar David Beckham created by TBWA\Chiat\Day (OMC ), the same agency that handles Apple Computer Inc.'s (AAPL ) ads. Although it trails Nike in the U.S. by 14 share points, Adidas has an overall share outside the U.S. of 28%, not far from Nike's 31% (table).
Nike isn't about to concede any sport to Adidas. The Beaverton (Ore.) shoe giant is beefing up its lead in basketball and running, and since soccer is such an important gateway to brand loyalty with children worldwide, it's also pushing back on the soccer field. "Our goal is to be the No. 1 [soccer] brand in the world," says Nike President Charlie Denson.
Locked out of ad placements in the U.S. during the World Cup games, Nike is going guerrilla to get exposure. While Adidas blows its dollars on traditional ads, including locking up most of the outdoor signs in Germany, where the matches are being played, Nike is taking the viral and digital route. The company teamed with Google Inc. (GOOG ) to create the world's first social network for soccer fans, Joga.com. The site, which launched on Mar. 15, will roll out to 140 countries in 14 languages. Hoping to make Adidas wonder why it spent all that money on mere ads, Nike is making the site a replica of top social network site MySpace.com (NWS ) for soccer-mad fans to commune with each other over their favorite players and teams, download videos, create discussion groups, and the like. Nike expects millions of people to register. "It's this enormous focus on everything [soccer] that exists nowhere else that could make Joga.com so rich," says Stefan Olander, Nike's global digital director.
SHAPE-SHIFTING SHOES
The campaign and web site are named after the Brazilian phrase "joga bonito," or "play beautifully." Fans who join Joga.com or visit Nike's site can sift through layers of video clips, messages, and ads involving Nike's star players as well as watch videos about the magic of soccer -- called ginga by Brazilians -- in different nations. Fans can then download the clips to their iPods, computers, wireless phones, or portable PlayStations. Says Trevor Edwards, Nike's vice-president for global brand management: "Kids are talking online, connecting online, it's just a part of their world.... Gone are the days of one big ad, one big shoe."
If Nike has achieved maximum brand cachet through associations with top athletes such as Michael Jordan and Tiger Woods, Adidas is betting on buzz-generating designs and sponsorships of its own to win back share. Last year the company introduced a $250 computerized running shoe, Adidas 1, with a microchip that senses fit and performance and helps change the shoe's shape during a run. And it's looking to its World Cup ad blitz to position the recently launched +F50 Tunit soccer boots as the must-have footwear for soccer players, especially against Nike's Mercurial Vapor III boot, which has gained popularity as the lightest soccer shoe on the market. The Tunit allows wearers to customize the fit, including choosing among different weights for shoe chassis and cleats to match weather conditions and even the wearer's style of play.
Addressing local design trends is paying off, too. Adidas took the lead from Nike in Japan after sponsoring the Japan national team in the 2002 World Cup and by coming up with the adiZero, a lightweight, thin-soled sneaker that hit the spot with Asian consumers. Adidas was early to see the trend in Japan "to more lifestyle footwear and away from the technical, performance brands," says John Shanley, who follows Adidas for Susquehanna Financial Group.
Adidas is growing faster than Nike in other Asian markets, too, notably in China. It spent $80 million to be the exclusive sneaker sponsor of the 2008 Beijing Summer Olympics. "Nike could be rocked back on their heels...this all sets the stage for [expansion in] China," says Jeffrey Bliss, president of Javelin Group, an Alexandria (Va.) sports marketing firm. In fact, Adidas' gains in Asia pushed Nike to spend $44 million to sponsor the India national cricket team. That price tag may sound daft, but cricket is as much a gateway sport in India as soccer is in China.
All these frenzied moves and countermoves mean Adidas can't take its lead in soccer for granted. "I would never underestimate Nike's marketing muscle," says Sal Galatioto, president of Galatioto Sports Partners, a New York investment firm specializing in sports. "They always seem to have their finger on the pulse of what people want." Add to that pressure questions about whether Adidas can make the Reebok deal pay off, and the challenges of supplanting Nike in other markets remain huge. That's all the more reason Adidas needs its World Cup play to score early and often with fans.
READER COMMENTS
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nice business article.
now if you $150 US to buy a new pair of boots, what brand would you buy? or it doh matter?
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???
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nice business article.
now if you $150 US to buy a new pair of boots, what brand would you buy? or it doh matter?
Puma Kings... everytime
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Adidas regional sweat (http://newsday.co.tt/businessday/0,56906.html)
By Rory Rostant
Trinidad & Tobago Newsday
Thursday, May 10 2007
Footwear giant, Adidas, is ramping up its regional presence as it moves to increase its market share and visibility by tapping into the growing youth market.
“We have confidence in this market,” said Keiko Hara, head of brand communication, Latin America, Adidas, in a telephone interview last week. “It is a growing market.”
The global company has spiked its “Impossible is Nothing,” bringing in 30 more athlethes to its existing portfolio all in an effort to capture that growing interest in sports and “encouraging everyone to take their first step in reaching their impossible.”
While no Caribbean athlete was selected, Hara said it was something that Adidas has to consider in its global plans. “The company is not going to rule it out,” she said.
She pointed out though that a lot of ads have been appearing on cable stations like Tempo and Synergy. “We want to inspire and motivate,” she said, noting that Adidas sponsored the Soca Warriors during last year’s World Cup.
“Through stories of real people attempting and achieving what once seemed like impossible goals, adidas hopes to inspire people to think about their own obstacles and how to overcome them,” a press statement from the company said. Each athlete chose a defining moment in their life and then illustrated it through images and words which would later be combined to create the campaign, it was noted.
Hara said Adidas has seen double digit growth in Latin America and the Caribbean and 31 percent increase in revenues in 2005. Adidas acquired Reebook in a February 2006 deal and was seen as a strategy to head-to-head against Nike, another global footwear giant.
She explained that international sports stars and everyday athletes have been encouraged to tell their “Impossible” stories using their own hand-drawn illustrations and paintings.
“With this campaign we get a glimpse of the athletes not at the finish line, but rather at a pivotal point in their journey,” explained Eric Liedtke, Senior Vice President Global Brand Marketing, Adidas Brand. “When you witness the victory, the end result, it is not always clear how they got there or what they had to overcome along the way.
“By sharing the journey and, more specifically, a challenge that was encountered along the way we get to a place that is truly inspiring and not often seen. We believe that by giving everyone a glimpse behind the scenes of lives of these athletes, we really will be encouraging them to attempt their own journey,” he said.
The unique content was created by inviting the athletes to spend time in an art studio with a toy box of art supplies and allowing them to bring their story to life in their own way. This created a wealth of material which consumers will see in commercial films, posters, books, documentaries, exhibitions and even clothing designs. “In film, print, digital, and retail content, the athletes’ real-life experiences come to life through animated films and static images created by the athletes themselves. The results are deeply personal, edgy and refreshingly honest,” it was noted.
Highlights from the new campaign include David Beckham telling how he braved death threats from fans after the 1998 FIFA World Cup. All Blacks rugby legend Jonah Lomu talks about the challenges he faced when told of the possibility of spending the rest of his life in a wheelchair and US basketball star Gilbert Arenas explains the reason he wears the number 0 on his shirt.
The integrated campaign was launched simultaneously on a global and local level and includes TV commercials, documentaries, one long-format film, behind the scenes footage, print, large scale outdoor as well as exclusive digital content on www.adidas.com.
Hara said Adidas was using 17 percent of its advertising budget to boost sales across the globe and was “investing heavily” as it spreads its global message.