After adidas prised Houston Rockets star, James Harden, away from Nike for $200m last month, we look at whether it was enough to give the German giant the upper hand in its age-old rivalry with the Americans.
At the turn of the year, adidas’ north American president Mark King promised they would fight back to falling behind Nike and Under Armour in the endorsement stakes by signing 500 players in the next three years.
Historically, huge cheques for individual athletes had previously been the preserve of the German manufacturer’s arch rival, Nike, but after they handed over a $200m cheque to Harden last month, King’s words rang true.
In order to establish whether what this means for the balance of power in the Nike vs adidas battle, we need to look back at the last twelve months.
In the run up to the 2014 Fifa World Cup in Brazil, research firm Repucom published a report in which it concluded that United States sportswear giant Nike was winning a number of key battles with its arch-rival adidas.
While both sides had elite athlete endorsements, Repucom said Nike was ahead in terms of supplying kit to World Cup competing nations. Going into the event, it was also out in front in the social media stakes: “In terms of fan and follower figures, Nike certainly has the edge,” said Repucom.
“With over 35 million Facebook page ‘likes’ and 1.8m Twitter ‘Followers’, Nike has over twice the amount of engaged fans across the two popular social media sites than rivals adidas.”
The event wasn’t all bad for adidas, with adidas-sponsored Germany beating adidas sponsored Argentina to win the adidas sponsored tournament.
But overall 2014 was a year to forget for them. A lacklustre performance in the United States and overexposure to the sanction hit Russian market resulted in sliding sales, a shock profit warning and calls for CEO Herbert Hainer to quit came from the brand’s own shareholders.
Hainer clung on and promised a 2bn marketing revamp the company structure.
So a year on from Adidas’ annus horribilis, has Hainer’s promise to increase marketing spend made a difference? Well there’s no question that the German company has managed to regain some ground thanks to an aggressive football club sponsorship programme.
— adidas UK (@adidasUK) August 27, 2015
Having signed a 10-year, £750m sponsorship with Premier League team Manchester United in July 2014, it recently followed up by signing a 10-year extension deal with Bundesliga champions Bayern Munich (taking an existing contract that ends in 2020 and extending it until 2030). Along the way, it also signed a six-year partnership with Serie A’s current champion Juventus.
The Manchester United deal, which went live at the beginning of this season, was something of a coup because it displaced Nike in the process. It has also had a major impact on the brand’s social media status. According to Repucom, the new kit launch in July “generated over $2.3m in social media value in the first three days – and as a result making it the fastest value-generating football kit launch campaign ever”.
All of the above has led to speculation about whether adidas might now try to displace Nike as sponsor of Barcelona. Although the current deal doesn’t end until 2018, preliminary renewal talks are underway. If adidas were able to win Barca it would be in a formidable position.
The American Dream
Of course, football is only one part of the Nike-adidas duel. In the United States, adidas recently decided it would not renew its relationship with the National Basketball Association, which ends in 2016/2017. The partnership, which was picked up when adidas acquired Reebok, was regarded as a flagship. But the German sportswear giant is under attack from both Nike and Under Armour in the United States.
Nike’s domination of the United States sports sector is further enhanced by a kit deal for National Football League jerseys and a recently renewed partnership with the United States Olympic Committee, which runs to the Tokyo 2020 Summer Games.
It even found a way to attack adidas’s strength in soccer this year. While adidas was the sponsor of the Women’s FIFA World Cup, Nike was the sponsor of the victorious US team – a fact that worked in its favour according to marketing firm Amobee Brand Intelligence. In the six-hour period from the start of the final, the company tracked 2.87 million tweets having to do with the United States Women’s National Team or the Women’s World Cup.
One million of these tweets used the hashtag #USA, which was good news for Nike camp. In addition, said Amobee, Nike was the most mentioned brand connected to the event.
Outside the US and Europe, the strength of the two brands ebbs and flows. Nike’s sponsorship of the Indian cricket team has given it a competitive advantage in the subcontinent vis a vis adidas but it has found China a tough slog (see pages 32-44).
Over at adidas, the political situation in Russia and Ukraine forced it to issue a profit warning last year. But it does have the edge over Nike in rugby on the eve of the Rugby World Cup.
As sponsor of New Zealand’s All Blacks, adidas just generated a lot of PR and buzz around the new ‘Blackout’ range, which will see the All Blacks wearing black boots for the event. Nike, by contrast, lost its England kit sponsorship to Canterbury in 2012.
Jeremy Edwards, director of content at sponsorship consultancy Activative, said: “there are probably more similarities than differences between the two global sportswear titans.
“Both have corporate strategies based around R&D innovation and both have focused on technology in order to establish significant market disruption.”