Adidas plays down Russia World Cup opportunity

Amid concerns about whether the Russia World Cup presents a brand risk, Adidas’s CEO admits the event is not the sales opportunity it used to be, but says it still offers the chance to build the brand.

Adidas CEO Kasper Rorsted has admitted there is “no doubt” the World Cup, which kicks off in Russia in a little over a month, offers less of a sales opportunity for the brand compared to the same event in Brazil four years ago.

In 2014, Adidas sold more than €2bn (£1.7bn) in football gear helped by Germany (one of the team it kits out) winning the World Cup. But speaking on Adidas’s Q1 2018 financial conference with investors, Rorsted acknowledged Russia doesn’t offer the same opportunity.

However, he did describe the World Cup as a “tremendous” platform to showcase the brand. Twelve teams will don Adidas clothing or equipment for the event and Adidas will be looking to drive global desirability around the brand.

READ MORE: The Russia World Cup: A brand risk or a unique opportunity?

“We see this as a brand-building event. The direct financing impact is limited and the football has over time relative to the size of the company become a small event from a financial standpoint, but not from a brand standpoint,” he explained.

To make the most of the brand opportunity, Adidas will invest 12% more in marketing in this quarter taking its budget up to about €80m (£70.5m).

Rorsted’s comments come amid FIFA’s struggle to sign up sponsors ahead of the World Cup, with many brands reluctant to jump on board or give their campaigns the tick of approval.

Ahead of the World Cup in Brazil in 2014, sponsors were touting their campaigns months in advance, signing up the stars of the game and getting their messages ready for the tournament.

But this year, just a little over five weeks out from the start, few sponsors have started talking about their plans, with most brands telling Marketing Week that they won’t be ready to do so until much closer to the start of the tournament.

For more information about what brands are doing around the World Cup, follow the Marketing Week FIFA World Cup 2018 blog.