Mark Ritson: Adidas’ CEO is failing his brand with his exclusively digital mindset

Adidas CEO Kasper Rorsted, despite his marketing background, seems to have forgotten the concept of media neutrality in his misguided quest to go digital-only.

Adidas media neutralityMarketers complain, bitterly, about getting the ear of the CEO and achieving representation in the boardroom. But when a marketer does finally get to be the boss of one of Europe’s biggest brands he almost immediately starts talking bollocks.

I’m referring to Kasper Rorsted, the relatively new CEO at Adidas. Rorsted started his stellar career as a marketer at software company Oracle, so one might have hoped this formative experience might have resulted, two decades later, in a leader with a knowledge and appreciation for marketing.

But it was immediately apparent from his interview last week on American TV that this was not the case. Asked about his approach to technology, Rorsted could not wait to outline it.

“It’s clear that the younger consumer engages with us predominately over the mobile device,” Rorsted told CNBC. “Digital engagement is key for us; you don’t see any TV advertising anymore. All of our engagement with the consumer is through digital media and we believe in the next three years we can take our online business from approximately €1bn to €4bn and create a much more direct engagement with consumers.”

READ MORE: Adidas compares TV to the fax machine, claiming digital is its ‘most relevant channel’

Ignoring TV makes no sense

Before I suggest Mr Rorsted has got this all terribly wrong let me make two important caveats.

First, he is the CEO and if he wants to run Adidas with a dumbo digital-only mentality then that is his prerogative and I respect his right to do so. Second, I have no problem with digital marketing per se. I think search, despite its current travails, remains an unassailably useful tactic. I also think, if you dodge the dirty programmatic stuff and the overstated video metrics, that digital media have very clear advantages for many brands that merit their inclusion in many a brand’s media spend.

Media neutrality allows a company to get its strategy work done first and then worry about which media will deliver that strategy best and for least money.

I always had a problem with social media, which just struck me as an entirely implausible concept. The idea that traditional advertising was dead and that “conversations” between consumers and brands would replace ads is bat-shit crazy. Once organic interactions were replaced by what is, essentially, display and TV advertising on phones – the whole social approach made a lot more sense.

But where I continue to go completely mental is when a company, like Adidas, wilfully ignores all the actual data and propels itself into an entirely stupid, exclusively digital mindset. To understand why this makes no sense you have to examine a couple of key concepts that appear to evade Kasper Rorsted completely.

First, all that cock about TV being dead and young people just “engaging” with their phones is hyperbolic horseshit. Yes, young people watch less TV than old people. Yes, they watch less TV than their generational forebears from the 1980s and 90s. And, yes, they are gradually watching less TV each year as time goes on. All true.

Source: Nielsen and Deloitte Canada

But TV was such a dominant form of media for young people that its decline has many, many years to go before mobile advertising supersedes it. Indeed, the latest data from Nielsen in America suggests that the decline is starting to flatten even among younger demographic groups.

READ MORE: Mark Ritson – Facebook’s erroneous video metrics show no one has a clue about digital

The other complicating factor that Kaspar Rorsted is missing with his digital-only approach is how difficult it is to get a commercial message through to even the most mobile-obsessed consumer. As Thinkbox recently demonstrated with its own analysis, even a group as glued to their mobiles as the all-important 16 to 24 demographic still consume around 90% of their video advertising via TV.

That big flat screen on the wall might not be watched as much by the kids as it used to be, but compared to the tiny, active, ephemeral device in their pocket, it’s still the dominant source of advertising for young people. Facebook’s own data confirms that TV retains a superior reach for even the youngest demographic groups.

Digital savants can continue to predict the death of TV and its imminent replacement by mobile, but it’s not going to happen. Like cinema before it, which was widely seen to be in its death throes when video technology emerged in the late 1970s, the fatalistic predictions for TV’s long-term future will fall foul of social context, prime content and the simple size advantage of a screen that is 30 times bigger than the one in your pocket.

Source: Thinkbox

Remember media neutrality

Even if TV was on its last legs with younger consumers, Rortsed’s digital focus is still troubling. One of the great principles of good marketing strategy is the concept of “media neutrality”. It’s an embarrassingly simple concept but one with some of the biggest implications for how marketing should be done. It’s somewhat akin to José Mourinho deciding his adidas sponsored Manchester United team will spend the upcoming season playing with eleven centre-halfs long before he has reviewed the fitness and ability of his squad, the strengths and vulnerabilities of his opponents, or the objectives and importance of the various games ahead. 

Very simply, a company like Adidas should start each year with an open mind and no general preference for any medium over any other. The minute a company starts ring-fencing a medium-specific budget or announcing that it is “digital first”, it inherently makes a mockery of its own strategic foundations and will almost certainly invest its marketing budget in a sub-optimal way.

Media neutrality allows a company to get its strategy work done first and then worry about which media will deliver that strategy best and for least money. The minute a CEO like Rorsted prioritises digital and rejects TV he immediately nudges his whole organisation out of the strategy stage and pushes them prematurely to tactics.

By doing so he also closes down an important annual process in which good clients like Adidas can share their strategic objectives and see, first hand, which agencies and media can deliver on their brief the best.

Throughout my long and, at times, torturous defence of so-called traditional media I have never suggested clients actually spend money on TV or print or radio or outdoor. I have merely, and repeatedly, suggested that they should consider these options against the much cooler, much less questioned digital alternatives that now seem to get star billing at many companies, not just Adidas.

Being media-neutral does not mean saying goodbye to Google and Facebook, it just means asking them to fuck off until the strategy is done and then ensuring that outdoor, TV and print get a chance to get your money too. An integrated campaign does not have to actually consist of multiple media forms, it just has to have been built from a strategic and then tactical process that ensures all of them were considered. In many cases, in my own consulting experience, the optimum tactical solution was 100% digital. But that was after we completed the strategy and after we reviewed all the tactical possibilities.

I genuinely feel for serious marketers at Adidas. I have seen similar situations before in which properly trained, strategic marketers attempt to do their media-neutral job properly but find themselves constrained both upstairs and down in a digital shit sandwich.

Above our professional marketer is a CEO or CMO desperate to appear up-to-date and on top of all the very latest marketing tech. For these sad exemplars of leadership it’s all about the optics and the next big job down the road. Below our erstwhile senior marketer is a digital marketing department that, if you asked them to consider outdoor advertising or some full-page print ads, would look at you like you had suggested an unmentionable sex act behind the photocopier.

The hegemonic forces of marketing are such these days that moronic CEOs like Kaspar Rorsted can say what he said last week and most people will tip their hat in his direction and praise his “vision”. I bet six pairs of trainers and a Man United top that by the time we hit Christmas there will be a big TV campaign for you-know-who on the box. Just don’t tell the boss.

  • Professor Mark Ritson will be teaching the next class on the Marketing Week Mini MBA in Marketing from April 2017. To find out how it could make you a more confident, more effective and more inspired marketer, and to book your place, click here.
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Comments
  • Sumeet Vermani 22 Mar 2017 at 8:42 am

    As much as I agree with the view on having an integrated media mix to meet marketing or business objectives I can’t help but push back on this diatribe against Adidas. Unless we have further external knowledge I would find it hard to believe no current customer insight has been used to inform this shift or no analysis of current marketing spend and its measurable effectiveness at meeting business objectives was done (primarily in this case selling shoes). In terms of measures of TV effectiveness used in your examples it is a further example of marketers perspective and opinion focused on 2 markets, rather than a global business view that takes into consideration global multiple markets view. One has to also robustly challenge the measures of tv viewership from Nielsen and Thinkbox, as vigorously as we should challenge social or programmatic advertising for true media neutrality. The research you present also doesn’t account for trends such as multiple device watching – where people of all ages are increasingly engaging with mobile devices while watching TV – and the impact this is having on advertising effectiveness. Whilst I would agree that we should be open to suggestions as to how best to spend our marketing budgets from agencies, marketers should always have a view based on experience and knowledge to ensure there is rigour in challenging what a media agency presents us before we commit spend. The current challenge with programmatic fraud and YouTube extremist content, is as much an example of how much more of a knowledge and interest marketers should have in this area.

  • Joshua Rex 22 Mar 2017 at 8:44 am

    Here here! I’ll see your Christmas TV campaign and raise you a Super Bowl spot.

  • Justine Tate 22 Mar 2017 at 10:04 am

    Agree about media neutrality – however once you have been to their UK flagship store on Oxford Street you will never want to return instore again. I don’t know about the US presence – but assume it can’t be much better. Therefore the point of increasing/growing their online business sales is valid – I personally would only purchase their product online.

  • Matthew Chappell 22 Mar 2017 at 10:39 am

    Good article, but I’d argue that Mourinho would play 11 centre-halfs if he could.

  • dinger 22 Mar 2017 at 10:59 am

    the last time I noticed the adidas product Dr Gregory House was wearing them – this CEO is going to tell these celebs to ditch their tv aspirations and the resulting supernova will be visible on every tv in existence

  • Matthew Connaughton 22 Mar 2017 at 11:18 am

    Why, if Twitter – among all brands who don’t need to “go digital” – can decide that turning to TV to target YOUNG, female, SPORTS FANS makes solid marketing sense (and don’t forget, they’re only flogging free content – not trainers and sportwear), has Adidas conclude the complete opposite?! This is all a bit embarrassing to watch.

    Mark, you should start a MW pontoon on how many months before the next Adidas TV advert airs.

    https://www.linkedin.com/pulse/did-twitter-just-kill-social-tv-matthew-connaughton

  • Matthew Connaughton 22 Mar 2017 at 11:20 am

    Just a thought. Seeing Adidas “doesn’t do TV”, maybe it should put its money where its mouth is by pulling its multi-million football shirt deals with real Madrid, Man United et al – and go sponsor YouTube “skills and goals compilation” videos instead…….

  • Freddie Ossberg 22 Mar 2017 at 11:25 am

    This reminds me of a panel I hosted a few years ago where a senior marketer from HSBC said they were now “digital-only”, yet when an audience member asked what was their most effective marketing campaign globally, she said “oh, airport gates by far – year after year”.

  • Zbiggy Ucinek 22 Mar 2017 at 12:58 pm

    Mark, what the hell is going on with you? From exceptional and insightful articles that challenged, you have started to peddle the same old drivel. Is it any surprise so much current advertising is crap, if you sell this nonsense to so called marketers.

    Rather than rely on bent or cover your ass research, once again, I will base my comments on real life insights rather than theoretical bullshit.

    The Adidas CEO is completely right, with the advent of catch up TV et al, my teenage daughters watch TV but not the ads, fast forwarding, because;
    A) They have a multi connected and busy life. They multi task while even watching a TV program, normally via a smart phone.
    B) They have been brought up in age where unlike my generation they don’t need or want to waste their time watching mostly rubbish adverts.

    They and their friends love and have numerous Adidas trainers. I also own and have bought many. The most recent being due to an exceptional two part documentary about a bunch of quality Manchester lads who discovered this amazing dude in Argentina. The guy ran a shop filled with nothing but Adidas trainers, many no longer available. Due to the internet I spent nearly two hours being exposed positively to the Adidas brand.

    Not only that but I also shared. So please stop your obsession with TV, it’s days are clearly numbered. Unlike cinema which is and will always continue to be an exceptional advertising venue because you have a receptive and focused audience, plus via the film shown exceptional targeting.

    The simple fact is digital while still many run by cowboys re Media Companies, offers immense possibilities re value for money, transparency and reach. As the saying goes a bad workman blames his tools.

    • Chris Gilfoy 22 Mar 2017 at 1:31 pm

      I think you’ve missed the point. Did you read the article? It’s not pro-TV or anti-digital. It’s simply pro-media neutrality, which is exactly the approach that every marketer should take. ‘Tactics without strategy is the noise before defeat’, and all that.

      • Zbiggy Ucinek 22 Mar 2017 at 4:23 pm

        Sit in the middle of the road and all you do is get run over. I haven’t missed the point at all, neutrality is done by those that are afraid to take a position. Mark has made a reputation speaking his mind and spreading his view, but someone else that clearly knows his target audience and gives his view is wrong. Give me a break!

    • Lee Grunnell 22 Mar 2017 at 4:04 pm

      Well, Zbiggy, if your teenage daughters watch TV but not the ads, I guess it must also be the same for every single teenager in the whole world, probably every single person…

      • Zbiggy Ucinek 22 Mar 2017 at 4:46 pm

        No but it is called real in depth insights. Based on real knowledge not bullshit focus groups or quantative studies. Via people you don’t know, have no idea if even relevent and yet so many companies believe they can give answers to people who should be paid to do so. This is an article about Adidas, company that we have purchased a significant and most likely will continue to do so. Therefore I know what I am talking about based on real life. Re all teenagers no idea, I believe if read Marks posts I believe that is called segmentation.

    • John Kenndal 22 Mar 2017 at 5:21 pm

      Are you the adidas CEO?

      • Zbiggy Ucinek 23 Mar 2017 at 10:22 am

        Sadly not, would be far more wealthy, no links whatsoever but really think the brand is a great case study re smart marketing. Incredibly clever use of heritage, positive and coherent line extensions that add to the brand not dilute it and and partnerships with cutting edge people that spread worth of mouth. Mark would have been better focusing on Nike that for me has completely lost its way.

  • Alexander 22 Mar 2017 at 1:27 pm

    Would be great to be able to share this to linkedin but your social share isn’t working as is pasting this in to linkedin

  • Brian LeCount 22 Mar 2017 at 2:25 pm

    What makes you think he doesn’t have a strategy? From a digital marketer with a strong appreciation for the role of TV and other ATL efforts, the issue I have with this POV is the massive assumption that he hasn’t done his homework and has no strategy. Perhaps you have insider info, but that wasn’t referenced here to prove the absence of a well-informed plan. Appreciate the strong POV though. Always love when folks take a stand in any direction.

    • Zbiggy Ucinek 22 Mar 2017 at 4:33 pm

      Very good point, but I guess it sums up the point of difference between real Leaders and Lecturer Consultants. One just talks the talk the other needs to walk the walk.

  • Jason Chastain 22 Mar 2017 at 4:46 pm

    Glad to agree with you, Mark Ritson. You nailed it on the head. There are many companies with weak sales from going all digital in a race to market to a stereotype of the unplugged Millennial. I also agree Television isn’t going away any time soon. As the younger get married and have kids, they’ll come home from work tired like Gen X, sit down after dinner and watch some of the best television programming that has ever existed. Used to be that movies were great and TV sucked. Now it’s just the opposite.

  • dinger 22 Mar 2017 at 6:00 pm

    and you can binge now, not an adidas in sight (ad, adidas geddit)

  • Gareth Rees 23 Mar 2017 at 11:21 am

    Adidas will be advertising on non-digital formats until at least 2025 due to the Manchester United shirt deal referenced in the article!

  • Steve 27 Mar 2017 at 3:25 am

    From a U.S. perspective, the most tellingly accurate quote from this article is: “it’s all about the optics and the next big job down the road.”

    It is all about the optics – and the budget. I’ve seen SVPs of Marketing pitch digital as a means to stretch the budget, and CMOs and CEOs lap up this thinking. To be fair, it does stretch the budget, but at the cost of conversions and sales. In short, a marketing department can buy a tonne of leads with a digital only budget. Unfortunately for the company (and the rest of us who worked there), leadership was more concerned with the appearance of marketing activity, than with qualified leads that led to actual sales.

  • Nicky Smith 28 Mar 2017 at 1:21 pm
  • Ryan Skinner 29 Mar 2017 at 3:12 pm

    I suspect the CEO is just signaling (internally and to the market) that they’re changing their sales model. The ‘kill the TV’ meme just ensures more attention. The real thrust is, I suspect, in product innovation and building the direct sales channel, as these two are far more likely to move the dial in a significant way over the next 3-5 years, compared to any slicing or dicing of a media budget – whether it be neutral to online/offline channels or no. Many brands in similar spaces are betting (big) on a similar approach.

  • Anonymous 30 Mar 2017 at 3:14 am

    End of the day – good marketing starts with research, analysis, OBJECTIVES AND STRATEGY!!!!! The strategy used has to be informed by clearly understanding the target market and their media consumption BUT it’s not only about that as we all know – what is the communication objective and what media is best to achieve that.

  • Anonymous 30 Mar 2017 at 3:15 am

    If I understand it correctly, Mark’s view was not PRO TV, it was PRO STRATEGY!

  • James Methven 15 Apr 2017 at 1:48 pm

    Ritson is a smart guy (a Prof to boot), but he can surely make his point better? In his article, the first 2/3rds is all about bashing his target and stroking his rather large ego. His actual point only arrives in the final 1/3rd. It’s correct, but not especially insightful. Perhaps this is why he feels the need to use expletives and colourful language to deliver the point…

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