Adidas to focus on brand strength

Adidas is at its zenith, with shoes and clothing worn by footballers, sports fans and followers of fashion alike. There is one dilemma: how to keep the brand from going off the boil.

To start with, Adidas joint managing director and marketing director Barry Hunter, must put a stop to his senior marketers defecting to Helly Hansen. Last week, Adidas head of advertising Andy Towne quit the German sportswear giant and threw his lot in with former Adidas managing director Bob McCulloch at the Norwegian outdoor clothing company.

Towne has followed the same trail from Adidas to Hansen as half a dozen marketing staff over the past year, since McCulloch became Hansen worldwide chief operations officer.

That the marketers responsible for one of the world’s biggest sportswear companies are jumping ship to a minor performance/outdoor player, casts doubts upon Adidas’ internal direction, for which Hunter is ultimately responsible. The exodus also draws attention to the crises facing sportswear companies worldwide.

“The sector is unbelievably ad-responsive, the strategy of the brand is key and we are now at a crossroads in terms of direction,” says Adidas creative agency Leagas Delaney’s media director Neil Hurman.

By the end of 1997, “Adidas was firmly established as the UK’s leading sports clothes brand,” states the Mintel report “Sports Footwear”. Adidas, Nike and Reebok account for 50 per cent of total sports footwear sales worldwide.

In order to compete in 1999, sportswear brands are going back to their roots – sports. Their inducement to purchase must be more compelling than, “Beckham wears it, you should wear it.”

Towne, the new Hansen global vice-president of communications, lists Hansen’s competitors as “anything kids can spend 100 on – a Sony Playstation, Levi jeans or Virgin CDs.”

Adidas spokesman Steve Martin says: “The brand, in the UK, is probably the strongest its ever been. As a result the brand will tell a story rather than – as it has over the past 18 months – use a symbol or person. In 1999 we will focus on the brand itself.”

The Asian financial crisis has hit hard. Nike issued two profit warnings in the US in the first half of this year. But the Mintel report says: “Any contraction in the sports market should, if anything, leave the core brands even stronger”, with Nike global turnover expected to increase in double figures.

After a period of rapid expansion and continuing economic instability, slowdown is inevitable, and has led the sportswear brands to re-evaluate marketing strategies.

This year the World Cup provided a focal point. There is no such event in 1999.

However, the World Cup showed that sponsorship spending power does not necessarily equate to brand awareness. Research carried out for Marketing Week (MW July 9) revealed sponsors failed to make an impact on consumers.

Adidas – which has a credible relationship with football – made less impact than McDonald’s, Coca-Cola and Vauxhall.

The use of sports stars will be reviewed. The Nike/Michael Jordan method became the way to sell sportswear, but industry observers say it was a one-off deal that happened at the right time.

One sports marketing expert says there is little point in sponsoring stars outside the top ten – which is expensive. Sponsoring an array of smaller players is not effective.

“This sector has to ask if heroes have the same potency as they did five years ago. The reality is yes, they do, but only some of them,” says Leagas Delaney’s Hurman.

Hurman reckons the number of contracts between sportswear companies and stars will slow down because they do not represent medium and long-term brand management.

Adidas has David Beckham, Naseem Hamed and Anna Kournikova. Adidas spokesman Steve Martin says they will continue to use stars, but the brand will begin to emerge from behind them.

It may seem incredible that a sports brand is saying it has to © focus more on sports. Why did Adidas lose sight of it in the first place?

The answer lies in the fact that only 20 per cent of people buying Adidas goods participate in sport. The other 80 per cent are sports fans, followers of fashion and leisurewear consumers.

“Fashion is almost a swear word here,” says Martin, stretching the point. But next year “underground style leaders” will be kept aware of the brand through promotion.

Fashion moves in cycles. It has been sports-led for a decade, it could be about to move on.

Hurman says sports brands have been living a lie – their sales are fashion-led: “The sportswear sector is under the microscope because we are entering the end of the cycle.”

Brown shoes are fashionable, outdoor/performance brands using manmade materials are fashionable. Unsurprisingly, Adidas and its competitors are moving into this sector.

Adidas’ Martin says climbing and mountain-biking are legitimate sports for it to get involved with: “We can compete with performance brands, we have very technical products in the new “Equipment” range.”

Reebok already owns brown shoe brand Rockport, makes aerobic equipment and owns the licences for Ralph Lauren footwear and Polo Sport clothing. Nike has diversified into skates, and Adidas into ski and golf equipment with the acquisition of Salomon.

Reebok, says Hurman, is a “sleeping giant” which, with investment and direction, could challenge Adidas. The media environment increasingly shapes the sporting world and Hurman says Adidas UK believes Sky Sports is the most potent sports brand in the country.

If Sky’s deal to buy Manchester United goes through, where does that leave David Beckham’s deal with Adidas? Sky will own his contract. It could be used as a advertising leverage tool, speculates Hurman. “You have to look at the way Hollywood works. Sports will be reduced to that level,” he says.

Adidas’ salvation will be in functional sports products which remain desirable to most of its fashion and leisure buyers. But so will Nike’s, so will Reebok’s. Towne, alongside ex-Adidas colleagues, will, on the other hand, be in charge of global brand direction for a small, nimble and growing company in the form of Hansen.

“Adidas is a highly successful brand which has had good fortune along the way. At some point the luck is going to run out and it needs a contingency plan,” says Towne.

The strength of that plan will be revealed in the New Year when Amsterdam advertising agency 180 unveils its first project for Adidas.


    Leave a comment


    Discover even more as a subscriber

    This article is available for subscribers only.

    Sign up now for your access-all-areas pass.

    Subscribers get unlimited access to unrivalled coverage of the biggest issues in marketing and world-renowned columnists, alongside carefully curated reports and briefings from Econsultancy. Find out more.

    If you are an existing print subscriber find out how you can get access here.

    Subscribe now

    Got a question?

    Contact us on +44 (0)20 7292 3703 or email

    If you are looking for our Jobs site, please click here

    Subscribers get unlimited access to unrivalled coverage of the biggest issues in marketing and world-renowned columnists, alongside carefully curated reports and briefings from Econsultancy. Find out more.

    If you are an existing print subscriber find out how you can get access here.

    Subscribe now