At a glance

adidas is on a marketing effectiveness journey as it shifts its focus from simple efficiency measures and embraces econometric modelling to give it a more nuanced view of the impact of its spending.

Why it matters

As the brand has now realised, an over-reliance on what can be easily measured distorts understanding of how its marketing spend is actually working. Business structures and accounting procedures can also obscure the true picture.

Takeaways

  • When aiming for a 60:40 split in spending between brand and activation, consider how overall budget is allocated between emotional and rational advertising.
  • Focus on the right metrics; digital measurement is easy but doesn’t tell the whole story.
  • Don’t confuse marketing efficiency with marketing effectiveness.

adidas is one of the giants of the sportswear market. Its market capitalisation is $60 billion, it operates in 150 markets, advertises in 120 and claims an 8-9% market share compared to market leader Nike’s 11%. It claims to have grown far faster than the overall sporting goods category over the past five years (40% v 8%), so when its global media director says the brand has struggled with marketing effectiveness, it comes as a bit of a surprise.