Mike Simpson

caseinpoint World Cup stadiums were the battleground as Nike took on Adidas Nike tackles Adidas Was it ambush marketing, or simply legitimate tactics in the off-field battle? In this case study, Mike Simpson examines how Nike tackled Adidas at the 2006 World Cup. 50 strategicmarketing Issue 2 2010 T he soccer World Cup is the premier international sporting event, creating interest in every country on earth and attracting audiences that surpass even the Olympic Games and America’s famous Super Bowl. For brands in the highly competitive sporting apparel and footwear market, associating themselves with the tournament is a marketing imperative. However, the sport’s governing body, FIFA, accepts only a limited number of non-competing partners, sponsors and national supporters. It is vigorous in protecting the rights of these commercial partners, to the point of persuading host governments to enact legislation that protects them from ambush marketing – which is defined as “a promotional tactic designed to associate a company, product or service with a particular event, without payment being made for an official sponsorship”.¹ Such is FIFA’s fixation with ambush marketing, that it famously made Dutch fans remove their trousers and watch a match in their underpants – because the orange pants they were wearing (orange being the colour of the Dutch national team) bore the name of a brewery which was not an official sponsor. In the run-up to the 2006 World Cup in Germany, Adidas had become one of the 15 sponsors who had paid between US$38-million and US$68-million to be associated with the event. Adidas is a German-based company that manufactures athletic shoes, apparel and sporting goods. At the time, it was the second largest such manufacturer in the world, with 34% of the market and a strong base caseinpoint in Europe and other traditional soccerplaying countries US-based Nike occupied the overall market leadership position, with a 38% share. It was particularly strong in its home market, where basketball, baseball and American football ruled the roost. While it had successfully expanded internationally into other markets and into ‘non-American’ sports, it still played second-fiddle to the Germans when it came to soccer. The challenge In July 2005, almost a year ahead of the start of the World Cup, Nike had made clear that it saw the event as a springboard to even greater things. In a letter to its retailers, Nike said it would: “Serve as the platform for launching Nike into the number one soccer brand in the US and the globe… football is the number one played sport (sic), and so if we want to stay the number one company in the industry, we are going to have to be number one in football”. The difficulty for Nike, of course, was that arch-rival Adidas had already signed up as an official sponsor and its CEO, Herbert Hainer, was on record as saying: “It’s vital for Adidas to dominate the World Cup… our three-stripes logo will be everywhere. For two years we have had more than 100 people in a separate building working on the World Cup… we have set ourselves aggressive goals”. Reporting on Hainer’s statement, The Guardian newspaper in Britain noted: “The real goal is clear: get Nike, especially on what should be Adidas’ home turf of European football”. In addition, Adidas was spending an estimated US$175 - US$200-million to buy up as much airtime and billboard space as possible, in an attempt to shut Nike out of most of the traditional media for the duration of the event. This was an important strategy, Nike saw the event as a springboard to even greater things because Nike was acknowledged as being particularly strong in television advertising. Indeed, respected US-based media consultant, Baba Shetty, called it “one of the great television advertisers of all time”. Nike, therefore, needed to come up with a clever alternative strategy, or risk losing a decisive battle in the war for dominance of the world soccer market. The solution Shut out of its traditional marketing strengths in mass media, Nike decided to opt for a new media strategy targeting its core group of customers – young males. In doing so, it also involved perhaps the biggest and most influential name in new media – Google. The key component was the development of an internet site called Joga Bonito – Portuguese for ‘play beautiful’. It became an online community for soccer fans worldwide, enabling them to share footage, download material, get news of the sport and its players, release viral videos, network with other fans, and set up games and groups. The multi-pronged campaign also included Joga TV, an online TV channel dedicated to football, and a real-life football tournament called Joga3. Not completely forgetting its roots in traditional advertising, Nike also created a series of ads featuring superstars of the game Crucially, Joga Bonito, was not meant to be just a way for international soccer fans to connect. Its ethos was to promote ‘the beautiful game’ – the expansive, free-flowing and exciting aspects – while downplaying the sometimes negative elements like diving, cheating, negative tactics and unnecessary rough play. The former attributes are embodied in teams like the revered Brazilians, with which Nike had close ties. While far from being devoted exclusively to Brazil, significant content was built around the team and its star creative players, including the high profile Ronaldinho, who also featured in the ad campaign. “It’s not about the Brazilian team; it’s about the spirit with which they play the sport,” a Nike spokesman said at the time. Clips of the beautiful aspects of the game – which Brazilian fans call ‘ginga’ were downloadable via iPods, computers, cellphones and portable Playstations. “Kids are talking online, connecting online…it’s just part of their world. Gone are the days of one big ad,” said Trevor Edwards, Nike’s vice-president for global brand management. Edwards also pointed out that Nike needed to convince fans that Joga. com was not merely a marketing site for the brand. “It has to be of the people; authentic and credible. It’s a self-governing community. Our job is to feed it, help it start and then they’ll fuel it (themselves). It’s a long-term way of connecting with consumers.” The site launched in mid-March 2006, and was rolled out to 140 countries in 14 languages. Joga3, a three-a-side game inspired by the Brazilian indoor soccer game of futsal, was created by Nike and then launched in February 2006, four months before the start of the World Cup tournament. Aimed at children and To page 52 Issue 2 2010 strategicmarketing 51 caseinpoint The key component was the development of an internet site called Joga Bonito teenagers under 19 years, it involved regionalised tournaments in 39 countries, building towards the global final in Brazil, one month after the completion of the World Cup. The results While the results are hard to quantify, there’s no doubt that Nike managed to attracting significant worldwide attention, at a time when Adidas and FIFA would have wished all soccer-supporting eyes to be focused 52 strategicmarketing Issue 2 2010 elsewhere. According to some reports, Nike’s overall spend was only around 50% of Adidas’ spend², but its impact was significant. In June 2006, as the World Cup kicked off, the Joga Bonito site was receiving 760 000 visits a week, while its sister site, Nikefootball.com, (which was linked) was recording 2-million weekly visits³. At times, the Joga site was receiving twice as many visitors as Adidas.com and had become rated as one of the top 1 000 internet sites in the world4. Prior to the start of the World Cup, 12-million people had already seen ‘Ping-Pong’, a Nike-created and downloadable trendy viral TV ad involving Ronaldinho playing ping-pong with a ball and a crossbar.5 Joga3 attracted 448 000 footballplaying participants in 39 countries, and proved sufficiently popular for some regional tournaments to be played in subsequent years as well. The Joga Benito campaign also received praise from critics for its innovation. “Nike went (in) another direction, building a community around an appreciation for the poetry of the game – paying nothing for sponsorship and, to a large extent, creating its own media,” said marketing commentator, Baba Shetty. “By enrolling consumers in shaping the marketing, Nike is figuring out what kind of microcontent audiences want and nurturing deeper bonds of loyalty and advocacy,” commented Pete Blackshaw, chief marketing officer at Nielsen BuzzMetrics, which monitors and measures global internet activity. “Beyond its nakedly commercial intent, Nike’s Joga Bonito seems rather like a poignant attempt to impose a ‘play ethic’ – no diving, no faking, no arguing,” said Pat Kane, British-based writer and creativity consultant. But there was criticism too, claiming that the campaign put style above substance and failed to recognise other important aspects of soccer – such as defending, goalkeeping and tactical play. “Some critics felt that Joga.com would appeal only to kids and people new to the sport, but not to serious supporters and die-hard fans of football. Critics also felt that Nike’s campaign was dampened by its association and over-dependence on the Brazilian team,” said researchers at the Centre for Management Research in India, who compiled a marketing case study on Joga Bonito. John Hagel, a business strategy & information technology consultant said on his blog (www.johnhagel.com) that he was critical of the website’s initial strategy of being a members-only closed site. “Joga.com apparently has since opened up, presumably in response to a lot of early criticism of the invitationonly policy. Once you get into Joga.com, you find that it features Nike players, caseinpoint The future Adidas is again a sponsor of the 2010 World Cup in South Africa, as it and Nike continue to be fierce competitors in the global soccer market. In 2007, for example, Adidas offered a reported $40-million to the Brazilian national team in an effort to coax it away from Nike. A year later, Nike responded by signing a $64-million deal to sponsor the French team. This comes into effect in 2011 and is reportedly four times what Adidas was paying the French. The Joga.com website remains in existence and now focuses on covering the European Champions League, the world’s top club competition. However, who is to say that it won’t be converted to a World Cup site in time for the 2010 finals? Nike has a history of clever ambush marketing activities – at the Olympics as well as the World Cup – and it’s hard to imagine that it won’t have a strategy in place for this year’s event. Late in 2009, Nike unveiled its ‘Lace Up, Save Lives’ initiative involving a number of top class footballers and rock star Bono, References: 1 www.yourdictionery.com 2 Islam, F, Stripes versus Swoosh in the Marketing World Cup, The Guardian, 28 May 2006 United Kingdom 3 Centre for Management Research, Nike’s Joga Bonito Marketing Campaign, www.icmrindia.com, 2006 India co-founder of the (RED) charity organisation. Nike is partnering with it to fight HIV/Aids in Africa by asking consumers to buy a pair of Nike laces. The proceeds then go to (RED). Already Didier Drogba, the Chelsea and Ivory Coast star striker, has captured headlines in a game by taking off his boot and displaying his red laces to the crowd after scoring a goal. Is this merely an isolated charity campaign, or perhaps the start of something bigger –aimed once again at somehow poking a finger in the eye of Adidas at World Cup time? The influential New York Times certainly seems to think so. In a December 2009 article, journalist Rob Hughes commented: “The governing body of world soccer has an exclusive partnership with… Adidas. That means that if Nike wants to be seen around the tournament it has to think up imaginative ways to trump the ‘official sponsor’ logo (that) Adidas can stamp on its products. “Nike’s publicity machine is as smart and as forceful at marketing as Drogba is in the goalmouth. But when the cause is as worthy as this one, when commerce and charity can be blended to such needy effect, it would be churlish not to applaud it.” Even for non-soccer lovers, the World Cup finals should make riveting watching. If not for the on-field action, then for the imaginative off-field marketing battles that will be waged. Shetty, B, World Cup Update: Nike Slams Adidas, www.hhcc.com, 18 June 2006 USA 5 Islam, F, et al •B usiness Week, Adidas’ World Cup shutout, www. businessweek.com, 3 April 2006 USA •M eyer, H, Adidas Banks on World Cup Marketing to Rally Global Sales, www.oregonlive.com, 5 December 2009, USA 4 The 2010 FIFA World Cup again sees Adidas as sponsor wordpress.com again conflicting with the open and all-embracing culture of soccer. “Joga.com is closed in another important sense – it is presented as an entirely self-contained environment with few if any pointers to the enormous wealth of soccer-related content that already exists on the Web,” he wrote. Late in 2009, Nike unveiled its ‘Lace Up, Save Lives’ initiative involving a number of top class footballers • Hughes, R, Drogba Shows His Sense of Timing, New York Times, 2 December 2009, USA • Business Wire, Nike Hosting Joga3 Futsal Tournaments, www.businesswire.com, 10 May 2006, USA • www.bbcnews.co.uk • www.sportstrader.co.za • www.johnhagel.com Issue 2 2010 strategicmarketing 53