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The Lesson Of Adidas Spending 3 Billion: How To Build A Brand?

What exactly does a brand do? We answer that to be a brand is to build the depth and breadth of the brand. It is the classic combination of these two dimensions. Some time ago, Marketing Week reported a piece of small news, although most marketers ignored it, in our opinion, it should be a small milestone in the marketing circle. The news headline is “Adidas: We are over-delivering in digital marketing.” Simon Peel, global media director of Adidas, said: Over the past few years, Adidas has over-invested in digital and performance channels, thereby sacrificing brand building. The article also provides exact figures: 77% of the budget is in effect, 23% in the brand. The word “over-investment” may not sound too serious.

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(All the pictures in this article are from XinDeSheng shoe factory)

But you should know that Adidas spends about 20% of its marketing budget every year. Even if it is only a 20% mismatch, one hundred million euros is the lesson of buying 3 billion yuan. What does the so-called “digital and effect channel” mean? In essence, you can understand that there are two standards: 1. Investments that can be monitored > those that can not. 2. Investments that directly generate conversions > Investments that cannot directly generate conversions. That is to say, Adidas spends a lot of budget on information flow, SEO/SEM (search engine optimization), e-commerce advertising channels; these channels can be monitored and even paid by CPA, or even CPS (purchase), ROI (return on investment) has a perfect effect. And traditional outdoor, TV, radio, and newspapers, are not such a good effect. More interestingly, the article mentions that Adidas has been citing an attribution model called “last click” for the past few years. As the name suggests, this model takes “pragmatism” to the extreme. No matter how much other brand information consumers have seen and clicked before, this model will attribute the conversion to the last click before the purchase. Seeing this, you should suddenly realize that this violates the essential marketing common sense: effect transformation is not water without a source. This source is brand building. From any consumer decision journey or basic funnel model, we can see that there will be no final conversion and purchase without source awareness and interest. Quoting data from a digital advertising veteran: In fact, users generally have to click on more than 20 advertisements to make a purchase. Various display methods include search, social, email, special-shaped, or TV advertisements. Therefore, I believe there is a bigger question in your mind: Adidas is stupid? Why doesn’t it pay attention to the brand? It is challenging for most parties first to insist on brand building. 

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The difficulty of understanding: what exactly is brand building?

The brand is a vague term with too many definitions, which can easily confuse everyone and increase the difficulty of mutual communication and promotion. And brand building so on. Considering the following scenario: Mr. Wang opened a restaurant and asked a designer to make a LOGO. Is this brand building? After the restaurant opened, Mr. Wang voted for a local public account to spread the word. Is this brand building? Mr. Wang invites relatives and friends to dinner and recommends more people by word of mouth. Is this brand building? Mr. Wang invited ten famous chefs to join the company. Is this brand building? Mr Wang imitates Haidilao hot pot and is famous for his services. Is this brand building? From the macro perspective of corporate value, every behavior here makes a brand. But if you start from individuals with different functions, each has its own bias. To establish three-dimensional thinking, never think of “making a brand,” think of an advertisement made by Apple or Nike, or write a creative slogan.

What exactly does a brand do? We answer that to be a brand is to build the depth and breadth of the brand. The so-called “mental salience” is a typical combination of these two dimensions. Depth can be seen as a vertical axis. From the most superficial recognition and memory to commitment and endorsement to the level of emotional and symbolic value, the deeper it goes up. The breadth can be seen as the horizontal axis, and any brand should focus on covering its category users more comprehensively. From the example of Mr.Wang mentioned above, we can see that sometimes he is doing depth, and sometimes he is doing breadth, which is directly related to the career and resources.

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Difficulty in Execution: How to Get Started with Brand Building

The second most serious difficulty in brand building is: although we know that brand building is significant, what kind of brand building should be done at what time? Without accurate feedback, how do you know if you’re doing it right? The most irresponsible answer is: it depends. The most responsible answer is also: it depends on the situation. Depending on the situation, what is tested is the underlying analytical ability of the brand operator. With analytical skills, there is confidence in execution. Generally speaking, the starting point of the analysis is at the two most fundamental questions: stage and category. At this stage, it is more about the timing of decision-making from the perspective of the enterprise, which determines how the person in charge of the enterprise makes the brand launch decision and how to divide the priority. For a newly launched Internet product, the time to achieve PMF (product-market fit) determines the importance and timing of brand drainage; in the early stage of research and development of a fast-moving consumer product, a good name may be the focus of the brand strategy. Defining brand values may not be the focus of consideration at this stage.

The ultimate goal of brand building is undoubtedly to build a rectangle so that the brand is both broad and deep in people’s minds, and there are enough consumers who have a strong enough memory and dependence on it.

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Category determines the commonality of consumers’ needs, decision-making mode, and the value composition of products/solutions. Take the example of online celebrities selling goods. The success rate of selling goods is essentially the possibility of purchasing. The possibility of purchasing depends on consumers’ perceived value VS actual price: an Internet Celebrity about beauty and fashion, and it is straightforward to sell new shoes of Adidas. Because in the perceived value of consumers, in addition to the most basic use-value of shoes, the design value of shoes and the sense of fashion superiority (brand social value) brought by the brand Adidas can quickly make the perceived value exceed the price, even if it sells for 1399 yuan, It is also likely to be sold out. In addition, the difficulty of implementation is often related to a thorough understanding. For example, it is to choose to cast effect advertising or choose brand advertising. Adidas seems to tell you that effective advertising should not be too much, and the brand should pay attention to it. But do we have to stick to concepts? There is no absolute “effect” and “brand” advertising. Therefore, we believe that the more thorough the understanding of the user’s mind and the objective law of brand growth, the more decisive the implementation will be.

The Difficulty of Persistence: Multiple Dilemmas Internal and External

The third difficulty in brand building lies in perseverance: many external temptations exist. Such as objective channels and media dividends. Video category: TikTok, Youtube; Social category: Facebook, Twitter, LinkedIn; Image category: Instagram, Pinterest; Chat category: Snapchat. At the beginning of the rapid rise of all channel bonuses, they were more or less proud of being able to sell out goods. Taking live broadcast as an example, when our customers are doing a live broadcast, they often admire its super high ROI. It is not surprising that even cars have recently sold tens of millions or hundreds of millions of dollars on live broadcasts. Ask: Which Party A is not interested? Danger often appears at the moment of greed when you have finished harvesting the first and second waves and intend to continue harvesting.

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Another example is various concepts that are constantly emerging and iterative in the circle. In 2017, it was “integration of quality and efficiency,” in 2018, it was “growth and fission,” and in 2019, it was “private domain traffic.” Behind the rise of new terms is attracting the attention of marketing decision-makers. The popular terms always imply that we can “catch big fish with short lines.” Not to mention, the old and new BAT giants use their powerful data capabilities and packaging capabilities to instill their set of methodology into you. There are too many things to tell you about new media, new concepts, and new platforms. These external temptations can pull you down from any “marketing common sense” or “long-term.”

The challenges within enterprises are more severe

The human weakness of brand managers: The company’s purpose is to make profits in the long run and may determine the tenure of the brand manager. His interest is to obtain promotions and salary increases in the short term. But it’s not managers who are more troublesome. Personal shortsightedness can rely on strong leaders to rectify the bias. The overall shortsightedness of large enterprises often happens with organizational expansion. In this confession of Adidas, this key factor is mentioned:”Our wrong short-termism is because we must be responsible for shareholder profits.” The goal of a business is to create value for shareholders, but shareholder profits lead to extreme short-termism that spreads from top to bottom throughout the company. We cannot say that the leaders have the problem, but the system and the culture. We can see Ali’s self-reform at the corporate culture level. When the company has not yet grown into a giant, the leaders actively lead all employees to “retreat” with their vision and invite external consultants to build the corporate culture and incorporate it into the KPI assessment. This conflicted with the KPI of sales performance at the time. As a result, we saw their latest corporate values some time ago, the first one with customer-first, employee second, shareholder third. The power of the organization has something to do with it. Extremely reticent, and to some extent, extremely pragmatic. It can say that making an enterprise more significant and more robust depends on the leader’s foresight, while making the enterprise sustainable may depend on a system and culture that can accommodate long-term. Trust that sticking to the more complicated, longer-term things will always pay off better.

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Brand building is complex, and it is more confusing and difficult for entrepreneurs who initially create a brand. It costs money and takes a lot of time and energy. Of course, the most important thing about a brand is the logo and the cultural connotation. (But not that the logo doesn’t matter, please click to learn more: UGG: How to grow from selling only 28 pairs a year to an international luxury brand.) For most people, a brand that can quickly gain popularity is good. But the popularity of product quality can not keep up. Sooner or later will hit their signboard. So, when you want to create your brand, you have first to find a supplier that belongs0 to your own or works well. Generally speaking, it is not the cheaper the shoe cost, the better, the best supplier should be to provide the best shoe quality within the acceptable range of customers, do the most robust backing of the brand, the brand, and suppliers run in, and trust each other to make the best shoes, to achieve a win-win situation! Our company’s purpose is to provide customers with safe and comfortable shoes!

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