Mark Ritson: Adidas’ CEO is failing his brand with his exclusively digital mindset – Marketing Week


Source: Mark Ritson: Adidas’ CEO is failing his brand with his exclusively digital mindset – Marketing Week

Adidas CEO Kasper Rorsted, despite his marketing background, seems to have forgotten the concept of media neutrality in his misguided quest to go digital-only.

Adidas media neutralityMarketers complain, bitterly, about getting the ear of the CEO and achieving representation in the boardroom. But when a marketer does finally get to be the boss of one of Europe’s biggest brands he almost immediately starts talking bollocks.

I’m referring to Kasper Rorsted, the relatively new CEO at Adidas. Rorsted started his stellar career as a marketer at software company Oracle, so one might have hoped this formative experience might have resulted, two decades later, in a leader with a knowledge and appreciation for marketing.

But it was immediately apparent from his interview last week on American TV that this was not the case. Asked about his approach to technology, Rorsted could not wait to outline it.

“It’s clear that the younger consumer engages with us predominately over the mobile device,” Rorsted told CNBC. “Digital engagement is key for us; you don’t see any TV advertising anymore. All of our engagement with the consumer is through digital media and we believe in the next three years we can take our online business from approximately €1bn to €4bn and create a much more direct engagement with consumers.”

READ MORE: Adidas compares TV to the fax machine, claiming digital is its ‘most relevant channel’

Ignoring TV makes no sense

Before I suggest Mr Rorsted has got this all terribly wrong let me make two important caveats.

First, he is the CEO and if he wants to run Adidas with a dumbo digital-first mentality then that is his prerogative and I respect his right to do so. Second, I have no problem with digital marketing per se. I think search, despite its current travails, remains an unassailably useful tactic. I also think, if you dodge the dirty programmatic stuff and the overstated video metrics, that digital media have very clear advantages for many brands that merit their inclusion in many a brand’s media spend.

Media neutrality allows a company to get its strategy work done first and then worry about which media will deliver that strategy best and for least money.

I always had a problem with social media, which just struck me as an entirely implausible concept. The idea that traditional advertising was dead and that “conversations” between consumers and brands would replace ads is bat-shit crazy. Once organic interactions were replaced by what is, essentially, display and TV advertising on phones – the whole social approach made a lot more sense.

But where I continue to go completely mental is when a company, like Adidas, wilfully ignores all the actual data and propels itself into an entirely stupid, exclusively digital mindset. To understand why this makes no sense you have to examine a couple of key concepts that appear to evade Kasper Rorsted completely.

First, all that cock about TV being dead and young people just “engaging” with their phones is hyperbolic horseshit. Yes, young people watch less TV than old people. Yes, they watch less TV than their generational forebears from the 1980s and 90s. And, yes, they are gradually watching less TV each year as time goes on. All true.

Source: Nielsen and Deloitte Canada

But TV was such a dominant form of media for young people that its decline has many, many years to go before mobile advertising supersedes it. Indeed, the latest data from Nielsen in America suggests that the decline is starting to flatten even among younger demographic groups.

READ MORE: Mark Ritson – Facebook’s erroneous video metrics show no one has a clue about digital

The other complicating factor that Kaspar Rorsted is missing with his digital-only approach is how difficult it is to get a commercial message through to even the most mobile-obsessed consumer. As Thinkbox recently demonstrated with its own analysis, even a group as glued to their mobiles as the all-important 16 to 24 demographic still consume around 90% of their video advertising via TV.

That big flat screen on the wall might not be watched as much by the kids as it used to be, but compared to the tiny, active, ephemeral device in their pocket, it’s still the dominant source of advertising for young people. Facebook’s own data confirms that TV retains a superior reach for even the youngest demographic groups.

Digital savants can continue to predict the death of TV and its imminent replacement by mobile, but it’s not going to happen. Like cinema before it, which was widely seen to be in its death throes when video technology emerged in the late 1970s, the fatalistic predictions for TV’s long-term future will fall foul of social context, prime content and the simple size advantage of a screen that is 30 times bigger than the one in your pocket.

Source: Thinkbox

Remember media neutrality

Even if TV was on its last legs with younger consumers, Rortsed’s digital focus is still troubling. One of the great principles of good marketing strategy is the concept of “media neutrality”. It’s an embarrassingly simple concept but one with some of the biggest implications for how marketing should be done. It’s somehwat akin to José Mourinho deciding his adidas sponsored Manchester United team will spend the upcoming season playing with eleven centre-halfs long before he has reviewed the fitness and ability of his squad, the strengths and vulnerabilities of his opponents, or the objectives and importance of the various games ahead. 

Very simply, a company like Adidas should start each year with an open mind and no general preference for any medium over any other. The minute a company starts ring-fencing a medium-specific budget or announcing that it is “digital first”, it inherently makes a mockery of its own strategic foundations and will almost certainly invest its marketing budget in a sub-optimal way.

Media neutrality allows a company to get its strategy work done first and then worry about which media will deliver that strategy best and for least money. The minute a CEO like Rorsted prioritises digital and rejects TV he immediately nudges his whole organisation out of the strategy stage and pushes them prematurely to tactics.

By doing so he also closes down an important annual process in which good clients like Adidas can share their strategic objectives and see, first hand, which agencies and media can deliver on their brief the best.

Throughout my long and, at times, torturous defence of so-called traditional media I have never suggested clients actually spend money on TV or print or radio or outdoor. I have merely, and repeatedly, suggested that they should consider these options against the much cooler, much less questioned digital alternatives that now seem to get star billing at many companies, not just Adidas.

Being media-neutral does not mean saying goodbye to Google and Facebook, it just means asking them to fuck off until the strategy is done and then ensuring that outdoor, TV and print get a chance to get your money too.

I genuinely feel for serious marketers at Adidas. I have seen similar situations before in which properly trained, strategic marketers attempt to do their media-neutral job properly but find themselves constrained both upstairs and down in a digital shit sandwich.

Above our professional marketer is a CEO or CMO desperate to appear up-to-date and on top of all the very latest marketing tech. For these sad exemplars of leadership it’s all about the optics and the next big job down the road. Below our erstwhile senior marketer is a digital marketing department that, if you asked them to consider outdoor advertising or some full-page print ads, would look at you like you had suggested an unmentionable sex act behind the photocopier.

The hegemonic forces of marketing are such these days that moronic CEOs like Kaspar Rorsted can say what he said last week and most people will tip their hat in his direction and praise his “vision”. I bet six pairs of trainers and a Man United top that by the time we hit Christmas there will be a big TV campaign for you-know-who on the box. Just don’t tell the boss.

  • Professor Mark Ritson will be teaching the next class on the Marketing Week Mini MBA in Marketing from April 2017. To find out how it could make you a more confident, more effective and more inspired marketer, and to book your place, click here.
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