Digital Marketing. A Case Study of Adidas and Snapchat


Term Paper (Advanced seminar), 2018
29 Pages, Grade: 1,3

Excerpt

Contents

List of figures

List of tables

Abbreviations

1. Introduction

2. Part I: E-Marketing & E-Commerce
2.1 Unique factors of communication and adidas’ objectives
2.1.1 Unique factors of communication and sales approach
2.1.2 Explanation of adidas’ objectives
2.2 Strategy of adidas and Snapchat
2.2.1 Advantages and benefits of e-marketing and e-commerce
2.2.2 The use of specific functions and tools within Snapchat campaign

3. Part II: Online Marketing, Online Advertising & Social Media
3.1 Explanation of online marketing and social media activities and tools
3.2 Three social media trends to bring added value to the campaign
3.3 Advantages and disadvantages of online advertising

4. Part III: Mobile Marketing
4.1 Outline of an alternative mobile marketing campaign
4.2 Marketing objectives and KPIs
4.3 Creation of an agency briefing

5. Bibliography

6. Statutory Declaration

List of figures

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List of tables

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Abbreviations

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1. Introduction

Since market power has moved from enterprises to consumers, and global competition has increased substantially, managers in almost all industries need to face enormous per­formance challenges. To avoid being replaced by rivals, they are forced to be more inno­vative in establishing and performing their competitive strategies. Long-term success will not be achieved solely through competitiveness but instead will depend on the ability to evolve new demand and create and gather new markets. Therefore, marketing is one of the most fundamental topics when concentrating on the customers’ desires. Mainly it is about picking up the clients by delivering a unique feeling in form of a must-have product.

Adidas is counted among one of the global players of sports and lifestyle brands, together with its biggest competitors Nike and Puma. With an annual revenue of EUR 21.218bn (in 2017), over 56,888 employees worldwide, and more than 900 million products produced per year (Adidas, 2018a), the German business is an omnipresent sports and lifestyle brand, which became more and more important over the last decades. According to sta­tista (2018a), it was voted one of the ten most reputable companies worldwide in 2018, being the only sports and lifestyle brand in this ranking. In addition, Forbes (2018) pub­lished an article, stating that Adidas reached the third place of the World’s most valuable sports brands, following Nike and ESPN. When looking at Figure 1, illustrating the global revenues of Adidas, Nike and Puma from 2006 to 2017 (in billion euros) it can be seen, that the company founded in 1924 by Adi Dassler in a small village in Southern Germany called Herzogenaurach (Adidas, 2018a) is lagging behind Nike’s global revenues for many years. This is one of the core reasons driving the brand with the three stripes to establish new marketing strategies for diversifying and simultaneously increasing its customer port­folio.

Figure 1: Global revenues of Adidas, Nike, and Puma from 2006 to 2017 (in billion euros): Adidas, 2018

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The sections below concern aspects referring to the research fields E-Marketing and E­Commerce, Online Marketing, Online Advertising and Social Media, and Mobile Market­ing. A summary with the most fundamental information is provided at the end of each part.

2. Part I: E-Marketing & E-Commerce

Hereafter, the focus is on describing and evaluating adidas’ unique communication and sales approach from a digital sales and marketing perspective. Followed by explaining the objectives of the German sports and lifestyle brand. The last section of this part deals with the strategy of adidas and Snapchat, pointing out advantages and disadvantages of e- marketing and e-commerce, and describing how the enterprise used specific functions and tools within the scope of the campaign.

2.1 Unique factors of communication and adidas’ objectives

After several years of working meticulously at home, Adolf Dassler registered the “Brother Dassler Shoe Fabric” in the commercial register of Germany in 1924 and it seems that the company ran through an enormous innovation process since then. The brand with the three stripes is known all over the world for its sportive, casual, and lifestyle products and its marketing of all major sports leagues from soccer, over basketball, to handball.

2.1.1 Unique factors of communication and sales approach

In contrary to competitive brands like Nike and Puma, adidas was the first enterprise to focus on mobile marketing in form of Snapchat, when launching the campaign “Here to Create” and therefore put itself into a unique competitive position, so to say a blue ocean of marketing. When looking for blue ocean frameworks, in theory, the main aspect to find is that firms are willing to increase their revenue shares of new products in new and unre­lated marketing areas, since competition in those areas is comparably low. Through using a combination of tools, including AR and long form video content adidas drove high en­gagement, and as a result, the firm saw an 18 percent increase in store visits.

As mentioned before, it is considered as a unique campaign since adidas acted like a pio­neer by collaborating with Snapchat. Typically, consumers look for their products in offline and online stores or are even offered those by ads on web respectively search pages, but in this case, they solely opened their social media app and started to receive updates of their friends’ lives. It was an extracurricular side effect that they were able to have a look on the “Here to Create”- campaign, so nobody was forced or offered to have a look on that, compared to pop-up ads and similar. Top snaps did not only feature well-known ath­letes praising the power of creativity but encouraged the community to swipe up and watch a long-form video of inspiring high school athletes and non-famous people demon­strating their skills. In addition, the clips were always underlined by background music creating a good mood and pushing every viewer to participate. It gave the spectators a feeling of community, affiliation, and being proud to be part ofthat hype.

Another unique factor in terms of a digital sales and marketing perspective is, that adidas did not want to sell products or services via Snapchat through using social media activities or tools, like directing to landing-pages via ads, using QR-Codes, and others. In contrary, the brand with the three stripes wanted to direct the consumers to its physical stores to experience the variety of their products from sports fashion to lifestyle wear.

To sum up, the communication and sales approach from a digital sales and marketing perspective was unique at the time starting the campaign with Snapchat, but recently Nike did not only follow adidas it even overtook the business. The biggest competitor of the brand with three stripes launched a campaign via Snapchat, becoming the first business selling a product directly through the Snapchat app over the weekend in February 2018, with a special pre-release of its Air Jordan III "Tinker" shoe, which afterward hit stores in March 2018. People participating at a Nike party after the NBA All-Star game on 18th of February 2018 were allowed to scan exclusive Snap codes to open the social media app and purchase the sneakers for same-day delivery straight away. As a result, the shoes sold out within 23 minutes. The well-known e-commerce platform Shopify and a startup called Darkstore were in charge to manage the order-taking and delivery for this special sneaker promotion. The effort behind it was enormous, since “the brand with the swoosh“ also developed a Snapchat geofence over the Staples Center in Los Angeles, California, where the All-Star game took place to enable fans in the arena accessing a special 3-D AR lens illustrating basketball legend Michael Jordan.

2.1.2 Explanation of adidas’ objectives

Implementing an innovative, from a strategic perspective brilliant idea, at the right time, in a potential market, enabled the business to drive 18 percent more customers into its stores. The main objective of adidas to create this campaign was to drive footfall to stores and show how creativity in sports has the power to spark positivity around the globe (cf. Case Study). In addition, the company wanted to increase the online and offline store traffic by targeting engaged audiences. Moreover, the company wanted to enhance the retention rate of its customers. Last, reducing the length of the sales cycle (cf. Figure 2, page 4), by minimizing as many steps as possible was another essential objective.

As shown in Figure 2, the length of the initial sales cycle is reduced by three steps, namely one, five, and nine, with the help of automated processing when starting a campaign like adidas in collaboration with Snapchat. Of course, general objectives like increasing sales by a predefined percentage, building brand awareness, improving search rankings, increasing customer retention, improving customer service, and improving search rankings are considered as well but are not connected directly to this specific campaign with Snapchat, meaning that those are achieved as additional side effects.

In sum, the campaign was very effective, since it lifted message awareness and action content and increased the visits of physical stores by 18 percent. Furthermore, people following it were able to experience a completely new form of adidas and social media marketing in general, which led to higher brand awareness and image.

2.2 Strategy of adidas and Snapchat

When thinking about those two collaborating enterprises, which cannot be more diverse in their business models, the question what their strategy behind the campaign was arises. The following chapter is explaining, why this cooperation was a win-win-situation.

Mainly, adidas tried to concentrate on entering a new channel of e-marketing to increase not only its brand awareness but also its overall reach, by establishing a collaboration with Snapchat. The well-known social media platform was able to provide the creative tools, engaged audiences, and the scale to realize such an ambitious campaign. Through giving influencers and famous athletes, but also unknown consumers the ability to participate in a global, interactive creation campaign, the business generated an enormously high traffic respectively reach.

2.2.1 Advantages and benefits of e-marketinq and e-commerce

According to Wills (2014) and Edkent Media (2018), e-marketing and e-commerce show the following advantages compared to traditional advertising channels (cf. Table 1).

Table 1: Benefits of e-marketing and e-commerce: Author's own illustration

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As illustrated in Table 1, huge overlaps between the benefits of e-marketing and e­commerce can be found since the way of operating is very similar in both concepts. Any­way, the big difference between both is that in e-commerce buying and selling of prod­ucts or services is carried out by using electronic systems such as the internet and other computer networks, whereas e-marketing, including email marketing, search engine mar­keting, social media marketing, and others, uses the internet to spread advertising mes­sages to consumers. According to El-Gohary (2010), most of the researchers misuse the term e-marketing since they are using the terms e-marketing, internet-marketing, e­commerce, or e-business as equivalents or a deferent wording for the same meaning. To explain it in more detail, Internet-marketing is solely referring to the Internet, World Wide Web, and Emails, while e-marketing includes all of those and also other e-marketing tools like intranets, extranets, and mobile phones. Furthermore, e-commerce consists of even more components than e-marketing and last, e-business covers all of the afore-mentioned plus additional elements (cf. Figure 3).

Figure 3: Differences between marketing terms: Author's own illustration according to El-Gohary

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Summing up, e-marketing and e-commerce benefits overlap enormously, since e- marketing is a part of e-commerce, which again is a section of e-business.

2.2.2 The use of specific functions and tools within Snapchat campaign

Hereafter, the focus is on describing how adidas used specific functions and tools of e- marketing during its campaign with Snapchat.

As explained in the case study, the brand with the three stripes launched local filters fea­turing the advertising message of the campaign with the goal to reinforce local pride and as well encourage others of the social media community to spread positive vibes. In addi­tion, audience lenses enabled Snapchatters to distribute the “Here to Create” message through targeting high school and college athletes and simultaneous embolden the com­munity to engage by simply triggering a ball of their choice through moving the eyebrows. Furthermore, Snap Ads empowered adidas to make use of vertical video content through broadcasting high school athletes showing off their skills with the goal to spread content to the masses. Last, the business served Snapchatters the most relevant ads matching their favorite sports via Sport Snapchat Lifestyle Category targeting.

Recently, adidas has broaden its mind by using AR, Geofilters, and interactivity in its campaigns. In April 2018, adidas was the first company in the golf sports footwear market, which launched an AR app to see a golf shoe’s single components and to experience it in action on a life-sized golfer (Adidas, 2018b). So far, this has nothing to do with the collab­oration between the sports brand and Snapchat, but if applied to Snapchat campaigns in combination with influencers like athletes wearing products, the reach would be enor­mous.

Geotagging enables consumers to mark a geographical location like a photo or video posted online (Nations, 2018). When using Snapchat, consumers are able to snap a pic­ture or clip and swipe right on it to add a sticker, changing dependent on your location. One major benefit of geotagging is the improved SEO, since customers often look for a location to find a business as a first step and by using geotagging it is ensured that the company is listed higher in the results. Furthermore, it is used by enterprises to under­stand which locations are performing better than others. Moreover, it helps to gather es­sential behavioral information about consumers and therefore it is easier to target various market behaviors using the collected data to channel new advertising strategies in differ­ent areas (Outsource2india, 2018). Referring to adidas and Snapchat, this feature might be extremely useful at sports events, e.g. when FC Bayern Munich is playing in the Allianz Arena and people are snapping their experiences, adidas may place an ad of the new jerseys, shoes, or similar on Snapchat as a sponsor of the soccer team. In summer 2016, when the rapper stormzy celebrated his birthday at Thorpe Park, adidas created an indi­vidual Geofilter for him as a present, which was seen by almost three million people, alt­hough solely 400 attended the party. This might also confirm the theory that using Geofil­ters can have a huge reach if having the right influencers (Business Insider, 2016). Last, adidas targeted its loyal brand followers to interact with the brand by inviting those to use Snapchat’s doodle tool for designing individual footwear (cf. Figure 4), rounded off by the possibility to win a trip to its headquarters in Herzogenaurach.

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To conclude, Starbucks developed and built the brand through word-of-mouth channels and by being visible in a consumer's life. Most important for the business is to continuous­ly focus on its employees at the front desks, since those are the ones communicating with customers. To avoid damages on the enterprise by competitors, it is essential to create new value innovation by enhancing customer experience through investing in online con­tent and interactivity. Rather than creating additional new products, focusing on brand loyalty and enhancing the connection to its loyal customers, will create competitive ad­vantages. All in all, it is the concept of the future to transform passive customers into ac­tive ones by integrating their ideas, comments, and design proposals.

3. Part II: Online Marketing, Online Advertising & Social Media

In the following this paper is concentrated on online marketing and social media activities and tools to optimize and underline the cooperation and collaboration of adidas and Snapchat, followed by social media trends bringing added value to their campaign. Last, advantages and disadvantages of online advertising referring to the case study are de­scribed.

3.1 Explanation of online marketing and social media activities and tools

It is difficult to decide, which online marketing and social media activities and tools might be applicable in an individual situation, since there are a lot of opportunities in theory and practice. The table below (cf. Table 2, page 9) lists the most common tools and activities and evaluates the fit to this case study of adidas and Snapchat.

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Excerpt out of 29 pages

Details

Title
Digital Marketing. A Case Study of Adidas and Snapchat
College
International School of Management, Campus Munich
Grade
1,3
Author
Year
2018
Pages
29
Catalog Number
V438275
ISBN (eBook)
9783668785588
ISBN (Book)
9783668785595
Language
English
Tags
Adidas, Snapchat, Marketing, E-Marketing, Digital Marketing, Viral Marketing, Mobile Marketing, Online Advertising, Social Media
Quote paper
Ricardo Escoda (Author), 2018, Digital Marketing. A Case Study of Adidas and Snapchat, Munich, GRIN Verlag, https://www.grin.com/document/438275

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