Adidas: Marketing Budget Reallocation to Digital Channels

Adidas is about to restructure its marketing budget: “The biggest share of our communication is done via digital channels. By far, the traditional media do not play such an important role any more as they did in the past”, Chairman of the Board at Adidas Erich Stamminger told the German newspaper Handelsblatt. The second-largest sporting equipment manufacturer after Nike plans to reallocate the biggest chunk of its marketing budget to the (mobile) Internet. Marketing via traditional channels will only play a complimentary role then. This constitutes a radical shift in allocating the company’s marketing budget that amounted to 1.5 billion Euro in 2010 (approx. 13% of its annual turnover). Up to now, the marketing budget was allocated the other way around, with marketing spending via TV and print media occupying the main part and online marketing being just a supplementary addition.

The reason for this shift lies in the fact that the main target audience for Adidas is the group of 14-19 year-olds, who spend most of their time online. At the same time, traditional media like TV and print report a steady decline in usage. With its new fashion brand adidas Neon, the company seeks to compete with the leading fashion companies H&M and Zara. adidas Neon is one of the cornerstones of the company’s growth strategy. Yet, Adidas is not alone with shifting its focus to online and mobile channels: Nike pursues a similar strategy and Puma has also announced to double its digital marketing budget.

Take the corporate Facebook page as an example: Adidas already reaches a couple of million people there. The Adidas Originals Facebook page has 6.2 million fans, the Adidas football page, which counted some 100,000 fans at the beginning of the year, has gathered 3 million fans in the meantime, and the Adidas’ main page lists 1.5 million fans.