Adidas-Salomon AG

Author:Rayna Bailey, Chris Amorosino, Mark Lane
Pages:23-29
 
INDEX
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Adi-Dassler-Strasse 1-2

Herzogenaurach, 91074

Germany

Telephone: 49 9132840

Fax: 49 9132842241

Web site: www.adidasgroup.com

IMPOSSIBLE IS NOTHING CAMPAIGN
OVERVIEW

Over the years adidas-Salomon AG has maintained an international reputation as a premier maker of sporting goods and athletic footwear. It has hired some of the sporting world's top athletes as spokespersons for its products, and the company has also owned a sponsorship deal with the New York Yankees. Despite its high profile in the industry, however, the company remained the also-ran athletic footwear company in the United States, behind Nike, Reebok, and New Balance. In addition, in 2003 the company reported that its total sales in the United States had dropped 16 percent in the first nine months of that year. Further confounding adidas, which sponsored the 2004 Olympic Summer Games, was the loss of its sponsorship rights to the 2008 Olympics to its competitor Nike.

To gain an edge over the competition and to reenergize its business in the United States, in 2004 adidas-Salomon AG introduced a $50 million brand-marketing campaign—the largest ever undertaken by the com-pany—that included television, print, and Internet ads. Themed "Impossible Is Nothing," the yearlong global campaign was created for adidas by 180/TBWA, a partnership between 180, an agency based in Amsterdam, and the San Francisco agency TBWA/Chiat/Day. It kicked off with television spots featuring digitally altered footage of boxing legend Muhammad Ali jogging with some of the top athletes of the 1990s and 2000s, such as soccer star David Beckham. Athletes featured in subsequent ads included Ali's daughter Laila, also a boxer, NBA greats Tracy McGrady and Tim Duncan, and tennis champion Justine Henin-Hardenne.

The campaign clearly resonated with consumers and earned praise and official recognition from the advertising industry. After it began, the company reported that U.S. sales were up 11 percent compared with the same period the previous year.

HISTORICAL CONTEXT

Adidas was founded in the late 1920s in Germany by brothers Adi and Rudi Dassler. According to the company, Adi Dassler "had passion for every sport and a passion to make equipment to help every athlete perform better." In 1928 adidas began equipping Olympic athletes, and it continued to do so over the years. Runner Jesse Owens wore the company's track shoes during his Olympic competition in 1936, and it was reported that at the 1972 Olympics some 80 percent of the gold-medal-winning athletes wore adidas shoes. Adi Dassler's innovations included inventing screw-in cleats for soccer shoes and introducing a lightweight sprint spike. When the brothers ended their partnership in the late 1940s, Adi kept the business going and continued to develop

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HISTORICAL CONTEXT © Peter Kneffel/DPA/Corbis. sporting equipment intended to enhance the performance of athletes at all levels

By the 1990s, however, the company was struggling. This was due in part to mismanagement by Adi's son Horst, who, after Adi died, had taken control of adidas in 1985. Horst's death in 1987 led to the sale of the company in 1989 to French businessman Bernard Tapie, who filed for bankruptcy soon after purchasing adidas. By 1992 the company's U.S. market share had taken a nosedive, dropping to 1.9 percent from a high of 70 percent 20 years earlier.

In 1992 another French businessman, Robert Louis-Dreyfus, took the helm at adidas, and by the late 1990s the company was on an upward swing, increasing its business by 74 percent in the United States. But in 2003 adidas, with a 10 percent market share, still lagged behind Nike in sales, and its North American business was again on a downward slide, dropping 16 percent in the first nine months of that year. Herbert Hainer, who had succeeded Louis-Dreyfus as adidas-Salomon president and CEO in 2001, told Advertising Age that the drop in U.S. sales in 2003 was not a one-year problem but rather had been ongoing for several years. Hainer blamed the problem on the fact that adidas had been "slow to adapt to a shift in demand from many of our customers."

In an effort to revitalize its U.S. business, the company refocused its marketing to attract younger consumers and shifted its global marketing functions to the company's American headquarters in Portland, Oregon. Adidas also implemented a new, more cohesive approach to its international advertising by hiring American agency TBWA/Chiat/Day as its "global agency network." For the development of the upcoming campaign, TBWA was partnered with 180, an Amsterdam-based shop that had been creating successful ads for adidas since 1998.

TARGET MARKET

The "Impossible Is Nothing" campaign was driven by adidas's efforts to shift its marketing focus to reach its target audience, 12- to 24-year-old consumers involved in sports. Based on statistics showing that men between the ages of 18 and 34 spent more time online than watching television, adidas also shifted some of its marketing to the Internet. Tara Moss, Internet business developer for adidas America, explained during an interview with Advertising Age, "We were trying to reach that teen audience that is dedicated to sports. Their apparel and footwear is really necessary to them in their daily lives."

Whether the new campaign would actually appeal to its target audience was questioned by some. In an interview with the Oregonian, Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon, said that adidas needed to make changes in its marketing to be competitive with such companies as Nike and Reebok, who were using high-profile athletes, including NBA stars LeBron James and Yao Ming, respectively, to promote their products. "The challenge here is whether young teenagers, who are really the hot market for shoes and apparel, resonate with [Muhammad] Ali," he said. "Many of these kids may never have seen him compete in their lifetime."

COMPETITION

With a 37 percent market share in the United States, Nike had a firm hold on its position as the number one sporting goods company. In 2004 it introduced one of its most extensive advertising pushes, a campaign that asked the question "What If?" Like the adidas ads that featured star athletes, Nike's commercials used a roster of top athletic performers. But rather than showing the athletes doing what they did best, the Nike ads depicted athletes participating in sports other than their specialty. For instance, tennis star Serena Williams played beach volleyball, and Tour de France champion Lance Armstrong sparred in a boxing ring. As Nancy Monsarrat, Nike's director of U.S. advertising, explained to the Washington Times, "What if Lance Armstrong was given a pair of boxing gloves instead of a bike as a child? Our belief is that a passionate athlete's drive to win would translate into success in any sport."

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Reebok International Ltd., the number two maker of athletic shoes in the United States, had employed numerous memorable marketing campaigns, from "Because Life Is Not a Spectator Sport" in the mid-1980s to "Life Is Short, Play Hard" in 1991. In 2003 it introduced its "Outperform" campaign. According to the company, this campaign allowed...

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