The kicker

Adidas laces up to cash in on the World Cup

adidas world cup
Three stripes, one team. Source: dpa

German sports equipment maker Adidas has been the title of world’s top football brand ever since the West German team won the World Cup for the first time in 1954 with boots provided by the company founder, Adi Dassler.

This year, Adidas is equipping 12 of the 32 teams in the tournament, two more than rival Nike, and is devoting a large proportion of its estimated advertising budget of more than €2.5 billion ($2.95 billion) to the World Cup. It won’t say how much exactly. Football accounts for some 10 percent of the company’s sales, or more than €2 billion in revenue per year.

Adidas pays the German Football Association about €50 million per year for the privilege of equipping “Die Mannschaft,” the national football team, with gear. Argentina and Spain, two other teams with good chances to win the World Cup, are also likely also getting tens of millions for wearing Adidas, and superstars like Lionel Messi have their own individual contracts. It makes sense — football makes heroes, and heroes sell sports equipment.

But the design is also important. The German team shirt for the World Cup in Russia has a striped zig-zag band across the chest, echoing a design introduced in 1988 that is fondly remembered because the team that won the World Cup in 1990 wore it. “It was an era that revolutionized the design,” said Jürgen Rank, who designed all the Adidas shirts in this year’s tournament. “We have a legacy like no other brand.”

The 1988 shirt was new because it added the national colors of red and gold to the previous austere black and white of German squads. The 2018 version keeps the stripes but does away with the colors. Getting the design wrong would be disastrous — Adidas has already produced millions of the shirts.

12 p18 The outfitters of the FIFA World Cup 2018-01

Adidas is also making the official World Cup ball, the Telstar 18. “It’s the most heavily tested ball of all times,” said Holger Krätschmer, who holds the post of “Head of Football Future” at Adidas.

At the company HQ in Herzogenaurach, Adidas fired the ball against a steel plate 2,000 times. It was then handed over to 31 teams in 12 countries for further testing. The ball alone is huge business. In 2014 during the World Cup in Brazil, Adidas sold more than 14 million balls, from mini versions for a few euros to as much as €100 for the full-sized official ball.

And that’s not all. Adidas clothes the referees and will be the only sports company to advertise inside the stadiums. It’s Florian Alt’s job to make sure these huge outlays pay off.

He is in charge of the company’s World Cup marketing. TV ads are a mainstay, of course, but in the other big marketing conduit, social media, trends are changing. Facebook topped the agenda at the 2010 World Cup in South Africa. Four years ago in Brazil, Adidas focused on Twitter. “This year, Instagram is one of the most important social media platforms for us,” Mr. Alt said. It’s all about engaging young people visually with the brand, measuring success by the numbers of comments and shares of content featuring Adidas products.

There’s a battle raging between the world’s two dominant brands, Nike und Adidas. The US company entered the football market half a century after Adidas but is neck and neck with it, and possibly even in the lead.

Smaller German rival Puma equipped four World Cup teams this year: Switzerland, Senegal, Uruguay and Serbia. None of them is a serious contender for the title, but the company is hoping at least one of them may spring a surprise after Italy, the highest-profile team using Puma products, failed to qualify for the tournament.

Joachim Hofer is the Munich correspondent for Handelsblatt. To contact the author: hofer@handelsblatt.com

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!