World Cup Shoot-out

Tomorrow at noon local time in Marseille, Adidas officials, aided by luminaries such as Franz Beckenbauer, will unveil the World Cup football – the official ball of the 32 team tournament which starts next June.

Six hours later the draw for the actual competition will take place, with the 32 countries anxiously waiting to find out who they will play in the opening games. The same Adidas bosses, including president Robert Louis Dreyfus and global advertising director Neil Simpson, will again be in attendance, having paid 20m for admission to the select club of 12 official World Cup sponsors, along with the likes of Coca-Cola, McDonald’s and General Motors.

But on neither occasion will Adidas be pondering the winning team. Instead the company’s thoughts and efforts will be centred on arch-rival Nike and how to prevent it from stealing World Cup glory.

Of the many compelling business stories that surround the 1998 World Cup, none catches the imagination more than Adidas versus Nike – one an official sponsor, the other unofficial, but with enough money to confuse a worldwide audience. The prize: ownership of the planet’s biggest sport.

Both companies are expected to spend about 20m each in marketing and advertising in the four to five months up to and including the competition.

As Matthew Patten, chief executive officer of M&C Saatchi Sponsorship, puts it: “For the marketing team at Adidas, coming out of this competition with enhanced awareness is a matter of life and death.

For Nike, coming out of this competition well is a matter of life and death.”

Robert Senior, the account director on the Nike team at TBWA Simons Palmer, which will not now handle World Cup advertising after losing the account to Wieden & Kennedy last week, does not see the battle in quite such dramatic terms.

“This will be a seminal moment for a lot of brands involved in the World Cup,” claims Senior. “Advertisers and marketers can state the case for their brand, and say what it stands for. The World Cup is able to do this because at the moment football is everything. It dominates not just other sports but much of contemporary culture. You can see its influence in both fashion culture and pop culture.”

The clash between official sponsor Adidas, and unofficial Nike, is of wider interest than the two companies immediately involved. The other official sponsors will look at how the threat of Nike is dealt with by the organiser FIFA, and its sponsorship agency International Sports & Leisure (ISL), because Nike has a history of hijacking major worldwide sports events.

The most famous example was the Atlanta Olympics in 1996. Nike’s Olympic Village full of events and Nike star athletes, combined with a high impact poster campaign from Wieden & Kennedy made it the most talked about brand at the games. The result was that the public came away with the idea that Nike was an official sponsor.

This led the official Olympic sponsors, who paid 28m each to be associated with the games, to demand stricter safeguards from the International Olympic Committee (IOC) for future games. For instance, the IOC instructed Athens, the Olympic host city in 2004, to buy up the city’s outdoor advertising for the six weeks around the games and sell it to the IOC, which in turn will pass it on to non-conflicting advertisers.

Glen Kirton, head of football at ISL, says: “A lot of things came out of Atlanta. We saw how powerful ambush marketing could be. We saw that it was not good to overload an event with commercial sponsors.

“If you have too many 100,000 sponsors it takes away from the time you have to spend on your multi-million pound sponsors. The event simply looks too cluttered if too many companies get involved. We will move in this direction for the World Cup in 2002. If sponsors pay a lot of money to be an exclusive partner, exclusivity is exactly what they want.”

But the clutter effect is already having an impact with, for instance, some England stars signing sponsorship deals with Pepsi, while the team’s official sponsor is Coca-Cola. There is also potential for players to wear Nike kit with Adidas boots or vice versa.

The fight between the two brands is more evenly matched than it looks at first sight. True, Nike is by far the bigger company and last year recording revenues of 5.6bn ,compared with Adidas’ 2bn.

But in markets like the UK, Adidas still holds greater market share. What’s more Adidas has been involved in the finals since the Seventies, giving it a 20-year headstart on Nike.

In the UK for example, Adidas has a 21.8 per cent share of the football shoe market. Nike trails in fifth, with just 5.8 per cent, behind Puma (14.8), Reebok (11), and even Umbro (5.9), according to ACNielsen-MEAL.

As Eurosport sales director Lawson Muncaster, who works extensively with both brands, says: “Adidas is still seen as the authentic football shoe. It will benefit from its long involvement in the game.” But Nike is spending heavily to catch up.

FIFA claims that the finals, the largest single sporting event on the planet, will be broadcast to 195 countries with each game attracting a global audience of 500 million people. Nearly 2.5 million people will walk through the turnstiles to watch the matches played in ten French cities.

For their 20m, the official sponsors get between two and four advertising hoardings around the ten grounds, although one sponsor, Anheuser-Busch, will have to sell its boards to other companies because its Budweiser brand falls foul of French laws, preventing drink or tobacco being linked with sport.

The sponsors also have the right to use the “official FIFA World Cup” tag on their products, advertising and any related promotions, and up to 600 tickets per game.

The other ten sponsors are: Canon, Coca-Cola, Fujifilm, General Motors (which will promote its Opel/Vauxhall Astra) Gillette, JVC, Mars (promoting Snickers), MasterCard, McDonald’s, and Philips.

It means that no TV screen in the world will be free from World Cup related ads in the next six months – including many from companies which have not paid for any association.

Adidas is the only sponsor which is also an official supplier to the finals, in the form of clothing to the competition’s officials. But it may well be Nike that supplies the kit to the eventual winner, having bought the rights to ten international teams – including Brazil, Italy, Holland and Nigeria.

Adidas has a long association with football and FIFA. In the 1982 World Cup finals in Spain Adidas actually helped set up ISL together with FIFA when the games were short of money and needed commercial help.

Kirton says that ISL will constantly “police” the use of official trademarks, titles and logos. A team of French copyright lawyers has been retained to search for infringements around the world. Last month, FIFA and ISL issued a warning to advertising and marketing agencies worldwide, and threatened legal action against any company involved in infringing World Cup copyright.

But the French organising committee was forced to admit that unless a company uses the World Cup logo it will be powerless to act. As Senior says: “You can’t control people’s hearts and minds. If you have something interesting to say then people will want to hear it. It is impossible to police the airwaves all the time. It’s like trying to hold sand.”

Kirton agrees: “It’s impossible to buy the world’s media. In an event spread over so many cities it is impossible to stop rival poster campaigns. Once you have bought a sponsorship it is down to the skill of the company’s marketing department to make it work. Some will do better than others.”

He also accepts that of the 12 sponsors involved only one or two will be remembered as having any involvement in the competition at all. A Nike spokesman says: “The World Cup – and football in general – is very important for us. We intend to have a significant presence at the World Cup next year.”

An Adidas spokesman states: “Our heritage is in soccer, and we are a brand leader in that market. We’ll use our resources tactically and our aim will be to dominate the competition.”

Both Adidas and Nike are keeping details of their plans for the competition under wraps. But there is an emerging difference in their approach, with Adidas concentrating on individual stars and Nike, for the first time, having the opportunity to display its huge investment in international teams over the past three years.

Adidas will launch a new boot, its Predator range, next May backed by a major TV campaign. It plans to shoot a personality ad centred around the England and Manchester United striker David Beckham. It has also confirmed it will erect its own football village underneath the Eiffel Tower in Paris, Nike will have its own counterpart site on the outskirts of the city.

The focus for Adidas will be its stars, including England’s Paul Gascoigne, Holland’s Patrick Kluivert, and Germany’s Matthais Sammer. In a way this strategy has been forced on the company because many of the most attractive teams in the world now wear Nike kits. However, Germany and Argentina both still wear Adidas.

To emphasise how much things have changed, no team wore Nike at the 1994 World Cup finals. At that stage the company saw first-hand how powerful a world sport football is and decided to get involved. It is estimated to have invested more than 600m in the sport. Ten international squads now wear Nike: Holland, Italy, South Korea, the Czech Republic, Poland, Russia, the US, Portugal, Nigeria, and Brazil – which it signed earlier this year in a 250m deal over ten years. Nike is also still in the running to pick up the England team in a 50m deal over four years.

Sources close to Nike say the company will concentrate on its star teams and on the thrill of playing the game.

During the Atlanta Olympics Wieden & Kennedy produced a poster ad that ran: “You don’t win Silver. You lose Gold.”

Often ad slogans are meaningless, but this one may be especially apt for one of these companies.