Yesterday, one of my friends purchased what he believed to be an Adidas hoodie from a local store. I was initially taken aback by the price, but my surprise quickly dissipated when I noticed the spelling of the brand on the hoodie. Instead of the recognizable “Adidas,” it was marked “Adibas.” While the situation was amusing, it also served as a striking example of how Adidas has grown to such prominence that counterfeit products with similar logos and names are being sold, and yet consumers are still buying them. This, in my view, highlights the remarkable success of Adidas.
Path to success
Adidas (officially spelled “adidas” in lowercase) takes its name from its founder, Adolf (“Adi”) Dassler. After World War I, the Dassler family began producing footwear. By the early 21st century, the company had become Europe’s leading sportswear manufacturer and the world’s second-largest, following Nike. The brand has long been recognized for its signature three-stripe logo, along with its trefoil and mountain emblems. Adidas is headquartered in Herzogenaurach, Germany.
In the 1950s, footballers began wearing Adidas’ lightweight, screw-in studded boots, propelling the brand to widespread recognition. The company soon expanded its product range, introducing footballs in 1963 and entering the apparel market three years later. While Adidas maintained dominance in the sports footwear industry for years, competition intensified in the 1970s, particularly with the rise of emerging brands like Nike.
Adi Dassler passed away in 1978, and despite securing a groundbreaking endorsement deal with the rap group Run-D.M.C., creators of the famous song “My Adidas,” the brand experienced a decline in market share throughout the 1980s, reaching its lowest in 1986. However, in 2016, Adidas revitalized its image with a new partnership with artist and entrepreneur Kanye West. These two key moments stand out as significant milestones in the company’s success journey.
The first instance was when Jesse Owens, an American athlete who wore Adidas shoes, won four gold medals at the 1936 Berlin Olympics, catapulting the brand to global recognition. Another crucial moment came in 1954 when the German national football team, wearing Adidas footwear, triumphed in the World Cup final, further cementing the brand’s status in the sports industry.
How Much Does Adidas Spend on Marketing?
Marketing is a fundamental pillar of business success, and Adidas has always recognized its importance. The company’s marketing budget grew significantly in the years leading up to the COVID-19 pandemic, reaching 3.04 billion USD in 2019. While the investment dropped by over 670 million USD in 2020, the company rebounded, increasing its marketing spend to 2.5 billion USD in 2021.
Adidas’ marketing expenses cover a wide range of initiatives, from point-of-sale investments such as in-store advertising and shop fittings to broader marketing activities like sponsorship deals, media advertising, and events. This strategy appears to be paying off, as the Adidas brand value skyrocketed, more than tripling from 2016 to 16.48 billion USD in 2020. Notably, Adidas’ 2018 “Original is Never Finished” campaign was recognized as one of the world’s most effective advertising campaigns of that year. However, despite these successes, Adidas’ brand value dropped by over two billion USD in 2021, leaving its future marketing performance uncertain.
Ad Campaigns that Proved “Impossible is Nothing”
Several iconic ad campaigns have played a crucial role in shaping Adidas’ story, reinforcing its message that “Impossible is Nothing.”
- The ‘All In or Nothing’ Campaign
Adidas’ most expensive media campaign to date, the ‘All In or Nothing’ initiative, is led by the television commercial titled “Leo Messi’s World Cup Dream.” Featuring global brand ambassadors like Argentine footballer Leo Messi, Dani Alves, and Luis Suárez, the campaign also features a soundtrack by Kanye West.
“This advertisement embodies the ‘#allinornothing’ mindset, emphasizing the dedication and commitment required to win such a prestigious championship,” explained Tom Ramsden, the global brand marketing director of Adidas Football. “Anything less than full commitment will not secure the World Cup. At Adidas, we believe that being ‘all in’ is the only way to approach sports, unlock your potential, and make the most of the world’s greatest event,” he added.
The TV commercial, produced by TBWA/Worldwide and directed by Fernando Meirelles of City of God fame, debuted during the Champions League final on May 23. The campaign was bolstered by social media, in-store promotions, e-commerce pushes, and experiential marketing, including a branded media hub that toured Brazil. Adidas’ significant marketing investment highlights the importance of the World Cup in its strategy, as it seeks to counter Nike’s growing dominance in the football apparel industry.
- Impossible is Nothing
One of Adidas’ most iconic campaigns, “Impossible is Nothing,” was created by 180/TBWA in Amsterdam, with contributions from TBWAChiatDay in San Francisco. This campaign featured sporting legends like football icon David Beckham and boxing champion Muhammad Ali.
The campaign focused on inclusive marketing, featuring personal documentary-style videos of athletes and other notable individuals from around the world, showcasing their paths to success. What made the advertisement stand out was its diversity, representing a wide array of sports, genders, races, and cultures.
- All Adidas
The “All Adidas” campaign was designed to highlight the brand’s global presence across various sports, cultures, and lifestyles. It featured prominent celebrities such as football players Lionel Messi and David Beckham, NBA star Derrick Rose, and music sensation Katy Perry.
Competitors Who Made It Difficult for Adidas
To reach its current stature, Adidas had to navigate a highly competitive market, where new challenges and rivals emerge regularly. Throughout its journey, the company has faced fierce competition from several key players. Here are some of the major competitors that have posed significant challenges for Adidas on its path to success.
- Nike: Nike stands as the world’s leading footwear and apparel brand, a direct competitor to Adidas. The Nike vs. Adidas rivalry has sparked endless debates among consumers worldwide. Nike’s relentless pursuit of excellence has pushed Adidas to innovate continuously, striving to create superior products that match Nike’s dominance in the market.
- Puma: Puma is another notable competitor of Adidas. The history between the two brands is deeply intertwined, as they were originally part of the same company, Gebrüder Dassler Schuhfabrik, founded by brothers Rudolf and Adolf Dassler. However, their strained relationship led to the division of the company, resulting in the creation of two separate entities: Adidas and Puma. Today, Puma continues to challenge Adidas in the sportswear market.
- New Balance: New Balance, a prominent American multinational corporation with manufacturing bases in the U.S. and U.K., is a significant rival to Adidas. Known for its higher-priced products, New Balance justifies its premium pricing through superior product quality and technological integration. The brand enjoys strong consumer loyalty, particularly in the U.S. and U.K., where customers prioritize high-quality goods. New Balance presents tough competition for Adidas in both footwear and apparel categories.
- FILA: FILA, a South Korean sports brand, manufactures footwear and apparel for both sports and leisure. It targets the middle-class demographic and has built a robust reputation with various sponsorships, including backing the Australian cricket team and the Korean national football team. The brand’s support for major events and its roster of athlete ambassadors make it a formidable competitor to Adidas.
- Under Armour: Under Armour, launched in 1996, has rapidly become a prominent player in the sportswear market. Known for its footwear, performance gear, and casual apparel, Under Armour caters to athletes and active individuals across various demographics. The company’s focus on clothing, which constitutes 66% of its revenue, and its strong presence in North America make it a fierce competitor to Adidas.
Controversies in the Story of Adidas
Like many successful companies, Adidas’ journey has not been without controversy. Here are two significant controversies that have shaped the brand’s narrative:
1. The Shackle Shoe Controversy
In 2012, Adidas attempted to launch a shoe design that deviated from its typical sleek and athletic styles. The JS Roundhouse Mids featured a striking design element—a yellow rubber shackle that attached the shoe to the wearer’s ankle with a chain. The promotional slogan, “Got a sneaker game so hot you lock your sneakers to your ankles?” sparked outrage, especially in a country with a painful history of slavery. Civil rights leaders, including Reverend Jesse Jackson, condemned the shoe, arguing it evoked memories of slavery. In response to public backlash, Adidas quickly apologized and discontinued the product.
2. USSR-Themed Adidas Products
In 2018, Adidas released a series of USSR-themed products in anticipation of the 2018 FIFA World Cup in Russia. However, the decision to sell items featuring the Soviet Union’s branding was met with strong disapproval, particularly from post-USSR nations. Countries like Lithuania expressed their shock, with the Ministry of Foreign Affairs sarcastically tweeting about the products. Many questioned whether Adidas would ever consider releasing similarly controversial items, such as uniforms featuring Nazi insignia.
Partners in Success
Throughout its history, Adidas has forged several impactful collaborations, partnering with brands and influential personalities to elevate its products. Here are a few notable collaborations in the brand’s success story.
The Adidas Yeezy Collaboration
Adidas has built some of its most significant partnerships through collaborations with hip-hop stars. The iconic Yeezy-branded shoes, created in partnership with Kanye West, are a prime example of this strategy. Along with collaborations with artists like Pharrell Williams, Pusha-T, and Missy Elliott, Adidas’ influence on hip-hop culture dates back to the 1980s. The partnership between Adidas and the influential group Run-D.M.C., who popularized the brand’s tracksuits and shell-toe Superstar shoes, culminated in the 1986 hit song “My Adidas.” Some of the brand’s most famous footwear models include the Adidas Samba, Stan Smith, and the classic shell-toe Superstar.
Additionally, Adidas has partnered with renowned streetwear brands such as A Bathing Ape and Palace Skateboards, as well as high-fashion designers including Yohji Yamamoto’s Y-3 collection, Raf Simons, Rick Owens, Stella McCartney, and Alexander Wang.
Collaboration with Manchester United
In July 2014, Adidas struck a ten-year kit partnership with the prestigious Manchester United football club, beginning with the 2015-16 Premier League season. The agreement, valued at a guaranteed £750 million (approximately US$1.29 billion), made it the most lucrative kit deal in sports history. This deal marked the replacement of Nike as the club’s official equipment supplier.
In the realm of tennis, Adidas also signed a significant partnership with Andy Murray, the former World No. 1, in November 2009. The five-year contract was reportedly worth $24.5 million, making him Adidas’ highest-paid talent at the time. Beyond individual athletes, Adidas has sponsored ball-boy and ball-girl uniforms at the ATP Tennis Tournament in Mason, Cincinnati. The brand has also formed collaborations with organizations such as Malibu Tennis Camp, Green Fitness GmbH, and Schöler & Micke Sportartikel Vertriebs GmbH.
Expansions in the Pipeline
As part of its renewed ‘Impossible is Nothing’ campaign, Adidas is significantly expanding its focus on women’s activewear and sports footwear. The company has pledged to allocate more resources to women in sports, through innovative new products and targeted marketing strategies.
In June 2021, Adidas launched Stay in Play, a collection of period-proof apparel aimed at reducing the drop-off in sports participation that many women experience during menstruation. Furthermore, the company introduced the Adidas Ultra Boost sneaker, designed specifically for women’s feet, and is offering an extensive range of 72 sizes for sports bras, a product developed in response to the realization that 90% of women wear ill-fitting bras. Adidas emphasized that this initiative was designed for women, by women.
These highlights illustrate the key factors behind the success story of Adidas. Today, the brand stands as one of the top sportswear companies globally. As long as Adidas products continue to be sold under names like “Adibas” or “Abidas,” the brand’s success story is sure to keep evolving and adding new chapters to its remarkable legacy.
Adidas’ Sustainability Plan
Adidas has made significant strides in reducing plastic waste, setting a goal to use exclusively recycled polyester in its products by 2025.
Prioritizing durability, the Adidas-Terrex team has partnered with extreme athletes to rigorously test gear in the most challenging environments. Inspired by glacial landscapes, the collection features a refined palette of white, blue, and earthy red-brown hues.
The Three-Loop Strategy
The journey toward sustainability is a long-term commitment, and Adidas has developed its “Three-Loop Strategy” to ensure product sustainability in the future:
- Recycled Loop: Replacing new plastic with recycled plastic.
- Circular Loop: Creating products that can be recycled after use.
- Regenerative Loop: Designing products from natural materials, such as cells or proteins, which can return to nature at the end of their life cycle.
Currently, the development is still in the early stages, with prototypes like a circular loop anorak already in place. Adidas is actively working on advancing the regenerative loop.
Adidas is committed not only to creating sustainable products but also to fostering a culture of sustainability among consumers. One of its notable initiatives is the Adidas Running Community, which hosts running groups in multiple cities, emphasizing personal growth beyond just setting records.
Additionally, Adidas organizes events like *Infinite Trails*, encouraging participants to push their limits and test their endurance in challenging conditions.
Prepared by Zukhrakhon Mansurova
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