</strong>Adidas team strives to maintain brand momentum

Already the top player in the worldwide soccer market, Adidas is making gains in the US - and hopes an aggressive ad effort and focused PR strategy will help keep the streak alive.

Already the top player in the worldwide soccer market, Adidas is making gains in the US - and hopes an aggressive ad effort and focused PR strategy will help keep the streak alive.

Ask any soccer mom - the sport may not be No. 1 in the US, but for the current generation, it's getting huge. Elsewhere in the world, where the game is named football, soccer has long been enormously popular. Adidas-Salomon, which dominates soccer globally but has struggled in the US market overall, came on strong last year to gain share in America and solidify its position in the worldwide market by spreading its reach to other sports. And PR has had a lot to do with the comeback.

According to NPD Group, a sales and marketing consultancy, Adidas was the fourth-ranked athletic-footwear brand in the US last year, behind Nike, Reebok, and New Balance. Total sales, however, jumped 7% from 2003 to 2004, according to Adidas.

The company handles most of its PR work in-house, notes Jan Runau, who leads Adidas' 15-member corporate and global PR department from its worldwide headquarters in Herzogenaurach, Germany. Adidas works with Edelman in New York to increase its coverage in US business publications, while major subsidiaries throughout the world have their own, local PR units.

Expanding its foothold

In its drive to gain market share, the athletic apparel giant has linked a substantial part of its PR and marketing efforts to major sports organizations throughout the world, and made New York the focus of all major announcements involving new products, endorsements, and related developments.

The company has been an official sponsor, supplier, and licensee of the F?d?ration Internationale de Football Association (FIFA) World Cup since 1998, and will continue that relationship for the 2006 event in Germany. And an exclusive 10-year partnership signed last year with Major League Soccer (MLS) in the US helped Adidas lead the field in soccer gear in 2004.

Adidas also holds similar rights to all other major FIFA tournaments through 2006, including this year's World Youth Championship. In January, it became the first company to commit to a relationship with the 100-plus-year-old organization from 2007 to 2014.

"By leveraging connections with sports organizations like FIFA and the Olympic committee," says John Horan, publisher of industry newsletter Sporting Goods Intelligence, "Adidas has always had an 'official supplier' status. Nike never did. So when Nike was going up against ... Adidas, it took the approach of going more for the athlete - the individual athlete - and, to some extent, the teams. Neither company is exclusively doing one or the other, but there's a difference in emphasis."

Nike has made a big deal about passing Adidas footwear's market share in Europe, Horan added, but that can be misleading. While Nike had a lot of success with a street shoe that had a soccer look, it wasn't a field shoe.

"There's still not much doubt that Adidas is bigger in soccer," asserts Horan. "Nike's goal is to pass Adidas by the time of the next World Cup. Both are gaining market share at the expense of the second-tier brands like Diadora and Reebok."

Adidas is also diversifying, manufacturing a line of winter sports gear, inline skates, and hiking apparel, and its TaylorMade unit produces a line of golf equipment, footwear, and apparel.

Besides FIFA, Adidas has partnerships with national soccer federations in more than a dozen countries, ranging from Argentina and Canada to South Africa, Spain, and the United Arab Emirates.

The company also scores ongoing publicity through its sponsorship of many of the world's best athletes in various sports. After launching its first major advertising campaign last February in New York, Adidas, which recently canceled its contract with Kobe Bryant, signed a trio of basketball stars to long-term contracts, according to Edelman SVP Doug Donsky, who describes the threesome - Tim Duncan, Kevin Garnett, and Tracy McGrady - as "marquee athletes." Its objective, Donsky says, is to tie in with the best athletes and sponsor the best tournaments.

Horan, however, says because Kobe doesn't have a huge following with inner-city basketball kids, the shoes weren't selling. "These kids identify with Allen Iverson, not Kobe," he says.

Adidas also announced partnerships with designer Stella McCartney and hip-hop superstar Missy Elliott.

In a recent Footwear News article, Erich Stamminger, president and CEO of Adidas America, stated that the company's reach extends beyond advertising. "We were too fragmented in the past in terms of putting money into concept [advertising]... We needed something fresh, new, inspirational, and passionate ... that demonstrated in a very clear way our mission - to be the leading sports brand." The company's new tagline is "Impossible is nothing," which Stamminger says "is the most impactful campaign we've ever done."

A place for PR

An important part of this undertaking for Adidas is using PR to introduce its more expensive and innovative products. Late last year, the company began offering the $120 laceless T-Mac 4 sneaker, which adjusts and tightens through a dial on a lever that can be snapped shut at the back of the shoe, like ski boots. The dial controls hidden cables that hold the shoe on.

Adidas recently unveiled in the US what Footwear News referred to as "arguably the most technologically advanced shoe ever produced" - the $250 Adidas 1. Time described it as "one of the most amazing inventions of 2004," and named it the "Product of the Year." This self-adapting running shoe has a micro sensor in its heel that can adjust the amount of cushioning and is capable of a thousand calculations, Donsky explains.

But not everyone is ready to slip on such expensive shoes. A recent article in The Wall Street Journal stated that the sports apparel industry is "trying to push prices up because profits have been constrained by the retro fashion trend that favors less-expensive footwear.

An Associated Press article noted that "expensive athletic shoes practically disappeared from American stores a couple of years ago, reflecting in part a trend toward classic, no-frills sneakers and tightening consumer purses. Now manufacturers [are trying] to entice consumers to pay more, with new models that claim to deliver a better fit and more comfort - and cost between $100 and $250."

Given a stronger economy as well as marketing studies that support higher prices, Mitch Kummetz, an analyst for D.A. Davidson & Co., believes that "the athletic footwear companies are trying to tell a technology story again because it seems that the pockets of consumers may be opening up again," according to the AP. "But I don't think too many people are going to pay $250 for a pair of sneakers."

With 17,000 employees in its 115 subsidiaries around the globe, Adidas maintains a steady marketing barrage in Europe, Latin America, and Asia-Pacific, as well as North America. Though its US market performance in recent years admittedly has been up and down, the company is determined to reignite its brand here. Adidas has branches in more than 20 countries, including nine in the US, and its product line runs from soccer and basketball to track and golf.

But not everything is a slam dunk for Adidas. As a global brand, it finds itself the target of some anti-globalization organizations.

One recent issue the communications team had to face was a report published by a coalition of international workers' rights groups. Released before last year's Olympics, the report focused negatively on the working conditions at smaller athletic brands. The report "put us into the same pot [partly] because we were an official partner of the Olympics in Athens," says Runau.

But overall, Adidas has a good reputation among its stakeholders, including employees, NGOs, shareholders, and the media, adds Runau, who reports directly to CEO Herbert Hainer. "We are respected for our open and honest information policy."

With Stamminger in charge in the US, says Donsky, "Adidas had the most incredibly successful year in the company's PR history." He credits the global brand campaign, which has achieved "tremendous response," particularly for the Adidas 1.

"I don't think there's a shoe launch that's ever received more public attention - something like 3,000 articles," adds Donsky. "Footwear News recently named Adidas 'Marketer of the Year.' The company is absolutely on a roll."

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PR contacts

Head of corporate and global PR Jan Runau

Corporate PR manager Anne Putz

Corporate PR service manager Monica Salmaso

PR agency Edelman

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