Fool’s Gold?

 As far as Adidas is concerned, when it comes to the Olympics, you need to go big or go home. The Herzogenaurach, Germany-based athletic company is pulling out all the stops for the 29th Olympiad in Beijing. It has launched new technical shoes for 26 of the 28 official sports; created event apparel and footwear (to the tune of 500,000-plus pieces) for athletes, staff, volunteers and officials; rolled out a year-long marketing campaign in China; and plans to have 4,000 Adidas retail stores in the host country before the games kick off Aug. 8.

Adidas is just the latest brand to engage in the lavish spending and big campaigns, both product and marketing, that have come to be a hallmark of the Olympic Games. The company — which reportedly paid roughly $100 million for the rights to be the games’ official sportswear brand — said the investment is a no-brainer. “The Olympics are a tradition, and [our involvement is] something that sets us apart,” Patrik Nilsson, president of Adidas America, told Footwear News late last year.

Paul Pi, head of marketing for Adidas in greater China, added. “Whether viewers see records broken live or on delay, we believe the Olympic spirit is strong,” he said. “The games are an opportunity for us to showcase the Adidas commitment to athletes, products, innovation and leadership.”

There’s no doubt there is an audience to be had. On the ground, there are more than 10,700 athletes, 70,000 volunteers and an estimated 3 million visitors. And although TV viewership has been on the decline in the U.S., roughly 4 billion people will watch the Games worldwide over their 17-day run, according to the Chinese state media. Through its Olympic exposure, Pi said, Adidas is hoping to target what he calls a wide range of customers around the globe, “from hard-core athletes to weekend-warriors to style- and technology-conscious consumers.”

Nike, in its latest conference call with investors in March, touted ad campaigns centered around the games. While it is not a sponsor of the Beijing Olympics, Nike is the official sponsor of the U.S. Olympic Committee, which gives sportswear rights in certain areas, and it has said that marketing in China is key to its strategy. Nike Brand CEO Charlie Denson credited ad spending around the Olympics and the associated Just Do It campaign the company launched in China more than two years ago as key drivers of sales growth in Asia.

But do the games represent the public relations bonanza they’ve been made out to be? Some analysts and companies don’t think so. “The general sponsorship of the event is a big waste of money,” said Matt Powell, an analyst for SportsOneSource. “There’s some indirect [value] in seeing the logo all the time, and I wouldn’t say that’s worth nothing — there’s clearly some indirect marketing impact — but with the kinds of money people are spending, it’s not cost effective.”

This is especially true in China, said Shaun Rein, founder and managing director of Beijing-based research firm China Market Research Group. “There are so many companies pushing the Olympics right now that customers are getting etherized,” he said. Citing all the improvements in the public sphere that have happened under the banner of the Olympics — including environmental reform and increased freedom of speech — Rein said, “People in China have been hearing about the Olympics for six or seven years, and for much more meaningful things than shoes.”

In fact, Rein’s research shows that more Chinese consumers think Nike is the official Olympic sponsor than Adidas, and a significant number think it is homegrown brand Li Ning (which was founded by a Chinese gymnast who was an Olympic hero at the 1984 Los Angeles games).

While companies and analysts don’t agree on whether linking yourself with the games pays off in good public relations, they do agree that it is a spur to industry innovation. Powell called the games “an interesting laboratory for creating product that’s really special and unique,” and he predicted that this year’s Olympics will be no exception.

For instance, Adidas’s Made for Beijing collection, which includes footwear for every sport but judo and equestrian, has a new weightlifting style that incorporates a block of wood into the heel for support during lifts. And there is a canoeing shoe that features improved toe protection and drainage. The footwear also has a new look: Every sockliner comes with a GPS map showing the location of its associated event, and many styles in the collection use the company’s ClimaCool mesh, whose design references the new Beijing National Stadium, the “Bird’s Nest.”

Nike also created shoes for virtually all Olympic events and is using the games as a platform to debut a number of new technologies, among them Flywire, a Vectron-string-based construction being used in the new Zoom Victory Track Spike, a 93-ounce model in development for four-and-a-half years.

And Flywire is a good illustration of the ultimate goal of product innovation: commercial success. As Kris Aman, Nike’s global GM for the Beijing Games, said, “We really look at the Olympics as a starting point, not an end point.”


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