How Adidas Plans To Win The World Cup

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One of the best World Cup matchups this year will be Adidas vs. Nike.

Adidas has long been the leading brand in soccer gear, but rival sports apparel company Nike has been stepping up its game.

FIFA, the group that oversees international soccer, expects 3.2 billion people to watch some portion of the month-long tournament, which begins in Brazil on June 12. That’s just under half the world’s population.

Both companies have launched major marketing campaigns, but the stakes are particularly high for Adidas (ADDYY).
The German company is spending more this year than it ever has to promote its brand at the World Cup.

Adidas would not disclose exactly how much, but CEO Herbert Hainer has said the company is spending a “double-digit million amount” on advertising.

The success of this campaign will be crucial in helping Adidas achieve its goal of raising €2 billion ($2.7 billion) in revenue from its soccer division this year. That would likely put it ahead of Nike (NKE), which reported revenue of $1.9 billion in the soccer category last year.

Sizing up the competition: Nike is the world’s largest sports apparel company, with $25.3 billion in annual revenue last year, according to FactSet. Adidas is number two, with $16.3 billion in revenue.

But Adidas has close ties with the World Cup, having sponsored every one since 1970.

Adidas is one of six World Cup partners, along with major multinationals such as Budweiser (BUD), Coke (KO) and Visa (V). It has no plans to relinquish that title anytime soon. Last year, Adidas sealed a deal to extend its partnership with FIFA for another 60 years.

“For a full FIFA partner like Adidas, the World Cup is such an important play,” said Paul Smith, CEO of sports marketing firm Repucom. “It legitimizes their brand and their association with FIFA and the whole game of football globally.”

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In addition to making the official World Cup match ball, Adidas also sponsors four of the teams with a shot at winning: Spain, Germany, Argentina and Colombia.

Nike is not an official World Cup sponsor, but the Oregon-based company backs some of the most popular players in the sport. Cristiano Ronaldo, considered by many to be the best player alive, wears Nike shoes.

Landon Donovan, one of the most well-known American soccer players, sports Nike footwear as well. However, Donovan will not be playing in this year’s tournament, since he was left off the roster by team manger Jurgen Klinsmann. Other top players on team Nike include, Spain’s Gerard Piqué, Wayne Rooney from the U.K. and the Brazilian dynamo Neymar Jr.

It’s a remarkable roster considering that Nike was not a major player in the soccer business until 1994, when it signed a number of promising Brazilian players. Adidas traces its history with the sport back to the 1954 World Cup in Berlin.

Betting on Argentina: For this year’s tournament, Adidas is throwing its weight behind Argentine soccer star Lionel Messi, with an “icon line” of shoes named after him.

“He’s our top guy,” said Ernesto Bruce, head of soccer at Adidas. “I’m confident that Messi is poised to not only break records at this World Cup, but to go down in history as the best player ever.”

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