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8B05A24

Teaching Note

THE BRAND IN THE HAND: MOBILE MARKETING AT ADIDAS

Andy Rohm, Fareena Sultan and David Wesley prepared this teaching note as an aid to instructors in the classroom use of the case
The Brand in the Hand: Mobile Marketing at Adidas, No. 9B05A024. This teaching note should not be used in any way that would
prejudice the future use of the case.

Ivey Management Services is the exclusive representative of the copyright holder and prohibits any form of reproduction, storage or
transmittal without its written permission. This material is not covered under authorization from CanCopy or any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services,
c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-
3208; fax (519) 661-3882; e-mail: [email protected].

Copyright © 2005, Northeastern University, College of Business Administration Version: (B) 2006-07-03

CASE SUMMARY

In the “Brand in the Hand: Mobile Marketing at adidas” case, Nick Drake, global media manager
for adidas International, is responsible for developing and championing a new marketing strategy
at adidas called “Brand in the Hand,” which is based on the convergence of cell phones and the
wireless Internet. The case presents company background information, data on the penetration of
mobile devices such as cell phones, the growth of global mobile marketing practices, and several
mobile marketing communications (MMC) campaigns that adidas recently launched in 2004. It
also introduces a specific campaign — Respect M.E.: The Missy Elliott campaign — that adidas
launched in 2004 featuring Missy Elliott, a popular female hip-hop artist. This campaign was
designed to strengthen adidas’ position in the U.S. market within the 12 to 17 year-old market
segment.

This teaching note describes the results of the Missy Elliott (ME) campaign. For a number of
reasons, the campaign failed to meet management expectations. Drake and the Global Media team
at adidas are wondering how to respond to the disappointing results of the Missy Elliott mobile
campaign launched in the United States in 2004. The question facing Drake is what, if anything,
adidas should do differently in launching similar campaigns in the future.
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TEACHING OBJECTIVES

This case can be used in graduate MBA as well as undergraduate marketing classes to highlight
the role of new technology (e.g. mobile marketing) in marketing strategy and, specifically,
integrated marketing communications. In an e-marketing course, the case can illustrate the use
and impact of new technologies on marketing strategy and consumer behavior. In an advertising
management course, the case can be used to discuss specific mobile campaigns, compare mobile
campaigns with traditional and fixed-Internet campaigns, and discuss the opportunities and issues
surrounding the growth of digital interactive advertising vehicles. In a brand management course,
it can be used to illustrate the influence of the Internet and wireless platforms on branding
strategy, the importance of integrating marketing communications (particularly with respect to
emerging mediums such as mobile phones), and how mobile marketing applies to both global and
local marketing and branding strategy.

Specific teaching objectives for the case are:

• To introduce the concept of “Brand in the Hand” and its application to branding and
marketing communication strategy.
• To introduce several Internet-based and mobile marketing programs and allow the students to
analyse the degree of success of each of these programs using the various metrics provided in
the case.
• To examine the role of the value delivered to consumers through interactive and mobile
marketing platforms and content (e.g. the Missy Elliott campaign) in influencing campaign
success.
• To examine the objectives of mobile marketing strategies, whether to get consumers to take
action (behavioral) or to entertain and provide content and information (attitudinal/brand
building).
• To examine differences in consumer response to, and adoption of, mobile technology and
mobile marketing campaigns across different regions, e.g., between Europe and the United
States.
• To illustrate the factors that might lead to these differences across regions — e.g. consumer,
culture, technology, campaign content factors.
• To reinforce the importance of cross-media integration in the development of a marketing
campaign involving new mediums (e.g. the mobile marketing platform).
• To discuss how mobile marketing strategy applies to brands in different industries and
competitive situations (such as the auto or financial services industries).

SUGGESTED ASSIGNMENT QUESTIONS

1. What is adidas’ position in the athletic shoe market? How does the brand seem to be doing in
this market?
2. What evidence does adidas have that suggests the importance and potential success of digital
interactive and mobile marketing?
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3. What is the Brand in the Hand concept? What does this mean to adidas and its branding
efforts?
4. What were the objectives of the Missy Elliott (ME) campaign in the United States, and why
did adidas choose to centre the campaign based on Elliott? Do you think this campaign will
be successful in the United States and why?
5. How important a role should MMC play in adidas’ overall brand communications strategy? Is
MMC just a novel approach to marketing communications and a marketing fad (is it merely
communicating the same message in a new format?), and to what extent should it play a part
of overall marketing communications strategy at adidas or at other firms competing in
different industries in the future?

TEACHING THE CASE

Because of students’ awareness of the adidas brand and their familiarity and involvement with
wireless applications cell phones, instructors should have no trouble getting students interested in
the case. One way to start the case is to ask the students in what ways do they use their cell
phones and how they would feel if they lost their cell phone?

Based on experience with the case, this question will jumpstart a lively discussion around
students’ use of their cell phones or other handheld devices and how they would feel if these
devices were lost or taken away. The instructor should try to draw out student comments
regarding functional usage (to make calls, access e-mail, stay in touch) or gratification usage (for
entertainment, games, to enable one’s social network).

When asked the question “What would you do if you lost your cell phone” as part of the case
discussion, students’ replies suggest that they would be completely lost without it — that it is like
a security blanket to them. Graduate students, especially “older” students such as those who
might be part of an executive MBA course, might relate more to the use of PDAs (e.g. Blackberry
or Palm) for business/functional use and less to using these devices for social interaction and
entertainment.

PROPOSED CASE DISCUSSION FORMAT AND FLOW

One approach to teaching the case is to lead with the question “How successful do you think the
Missy Elliott campaign will be in the United States and why?” From this question, the case
discussion can be directed to discussion points about adidas’ position and challenges within the
global footwear market, what evidence the case provides that suggests the potential for mobile
marketing platforms such as the ME campaign, the rationale driving adidas’ use of Missy Elliott
for this campaign, and the specific campaign objectives stated in the case.
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The chart below illustrates a proposed discussion flow:

adidas’ market position

and challenges

Evidence of the potential

for mobile marketing
platforms based upon Discuss the results
previous campaigns of the ME
Will the ME described in the case campaign and
campaign be what seemed to go
successful and why? wrong, and what
Attributes and appeal of were the lessons
Missy Elliott learned.

Specific ME campaign
objectives

1. What is adidas’ position in the athletic shoe market? How does the brand seem to be doing in
this market?

There is evidence in the case that suggests that adidas, although a strong global brand with a rich
sports heritage (particularly in Europe), may indeed be struggling on three fronts: (1) Its
previously dominant position within the soccer category in Europe has now been compromised by
Nike, its primary rival; (2) adidas is a distant second in the important U.S. basketball footwear
category, in which Nike is a market leader; (3) adidas is significantly outspent in marketing
communications by Nike. Students may also bring up a weakness of adidas not mentioned in the
case — that the brand is primarily associated in the United States with European football (i.e.
soccer); this may limit its potential to increase sales in important and high-volume product
categories such as basketball shoes.

Industry/Company Situation

At the time the case is set (2004), adidas possesses a strong brand image both in the United States
and particularly in Europe, yet the brand faces significant challenges, as well from competitors
such as Nike and Reebok. As evidence of the brand’s strengths and challenges, students may
point to the following:

Strengths:

• adidas possesses a rich sports heritage (founded in 1920 by Adi Dassler).

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• The adidas brand produces athletic footwear and apparel within numerous sports categories.
• adidas has experienced significant growth in the U.S. market (between 1998 and 1999, it
doubled its U.S. market share), and the basketball footwear and apparel category is becoming
more important in the brand’s marketing and product efforts.
• adidas recently launched the “Impossible is Nothing” campaign, which was customized to
regions based on overall advertising guidelines provided by adidas corporate.

Challenges:

• Nike is the global industry leader with 40 per cent market share (adidas and Reebok each are
at 16 per cent share). Nike has a 60 per cent share of the basketball market versus 20 per cent
for adidas.
• Nike had recently taken the lead in the European soccer market for the first time in 2003.
• Nike spent $1.4 billion on advertising and promotion in 2004, compared with only $900
million by adidas.

It is important for students to recognize that adidas is significantly outspent in advertising and
promotions by its main rival, Nike. This begs the question of what adidas might do regarding
aggressively adopting new marketing communications mediums such as mobile marketing to gain
an edge over its rival.

2. What evidence does adidas have that suggests the importance and potential success of
digital interactive and mobile marketing?

Prior to the launch of the Missy Elliott campaign, the success of past digital interactive and
mobile marketing programs can be illustrated by some of the following campaigns and their
associated performance metrics (see Exhibit TN-1).

The case also presents significant background information that points to the current and future
potential of mobile marketing programs:

• Case Exhibit 1 shows current trends in wireless applications, online gaming and digital TV
• Case Exhibit 4 shows high mobile phone penetration rates in Europe (ranging from 60 per
cent to almost 80 per cent penetration).
• Spread of 3G technology and rich content (enabling users to browse the web, access content,
watch movie clips and sporting events, download music and wallpaper and ringtones, and play
games).
• Case Table 1 shows mobile spending by youth and forecast growth across the North America,
Europe, and Asia-Pacific markets.
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3. What is the Brand in the Hand concept? What does this mean to adidas and its branding
efforts?

Overall, the case comments reflect the widespread popularity of hip-hop and significant spending
on music and related products ($10 billion) by young consumers. Students may adopt various
positions as to the reasoning behind adidas’ choice of Missy Elliott for the campaign. To some,
she may represent concepts such as the empowerment of women; to others she may simply be a
popular and likable entertainer. Indeed, she is a five-time Grammy nominee and has sold some
seven million albums. However, some students may also question the use of Missy in the mobile
campaign and suggest that her appeal may be limited to younger female fans.

Because of their age, undergraduates might offer more nuanced opinions of adidas’ use of Missy
Elliott as the central element of the ME campaign than would graduate students. Graduate
students may more generally state that Missy Elliott, by nature of her roots in hip-hop, is an
effective person with which to reach the 12- to 24-year-old audience, whereas younger
undergraduate students might be more critical of her use.

Related to these differences among age segments, Exhibit TN-2 illustrates a framework with
which to differentiate the usage of and attitudes towards cell phones between the Gen Y and
Tweens segment and Baby Boomer consumers.

Students may also bring up issues related to the personal nature of cell phones and the potential
for intrusiveness and personal privacy invasion by brands if mobile marketing campaigns are not
executed on a permission-based or opt-in basis (whereby the individual gives permission for the
brand to send information or content).

4. What were the objectives of the Missy Elliott (ME) campaign in the United States, and why did
adidas choose to centre the campaign based on Elliott? Do you think this campaign will be
successful in the United States and why?

According to the case, the objectives of the ME campaign seemed to be to:

• Promote adidas-branded “Respect ME” products,
• Create consumer demand,
• Drive traffic to retail and provide a retail locator,
• Grow database of Missy fans for use at adidas, and
• Enable consumers to download exclusive ME mobile content for viral promotion.

The instructor can then ask whether these objectives are brand- or consumer-centric, meaning are
they focused on the needs of the brand or the needs of the consumer? What value do these
objectives propose to the consumer?
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5. How important a role should MMC play in adidas’ overall brand communications strategy? Is
MMC just a novel approach to marketing communications and a marketing fad (is it merely
communicating the same message in a new format?), and to what extent should it play a part
of overall marketing communications strategy at adidas or at other firms competing in
different industries in the future?

During the first two months of the campaign, the ME campaign website attracted 4,000 visitors:
• Twenty per cent registered for SMS and Missy picture alerts.
• Less than 50 per cent (2,000) downloaded free wallpaper.
• Only 10 per cent of visitors (400) visited the “Find a Store” area (an example of second-order
response and brand attitude formation versus first-order response and intention to buy).
• Two and a half per cent visited the Spread the Word page and sent viral e-mail link to a friend
(only 100 individuals!).

In short, there were several issues associated with the “failure” of the ME campaign that included
technology issues and content access issues. As well, compared with the Euro 2004 campaign,
which was based around several well-known soccer players and teams playing in a major
championship, the ME campaign was tied solely to one person and personality. Other issues to
discuss include:

• Technical problems occurred — messages were delayed, and the planned Missy online chats
never took place (25 per cent of 800 chose to discontinue receiving interaction/messages from
adidas).
• There was no cross-promotion of the Missy Elliott website and mobile campaign.
• Consumers had to access the ME website versus the applet-driven Euro 2004 Match Centre
for accessing content. (In the Match Centre, users could access content directly from their cell
phones.)
• Some students may comment that it might have been difficult to locate the campaign
registration site in the first place and that some people might have misgivings about providing
personal information within the online registration form.
• Part of the registration process for the ME campaign involved providing a credit card. Is it
reasonable to expect a 12-year-old to have access to a credit card?

Here, the instructor can emphasize three general issues related to the less-than-expected
performance of the ME campaign: (1) the choice of the celebrity (Missy Elliott), (2) the
campaign content and process to access that content (limited value to the consumer; web-based
versus the applet-driven Euro 2004 campaign), and (3) other technology limitations that might
have hindered the success of the campaign.

The instructor can also point out that if one looks at the chain of conditional probabilities based on
a number of assumptions that can be inferred from the case — from total population of Missy
Elliott fans to the number of possible ME Campaign registrants — it might have been evident to
adidas management that the total number of registrations might indeed be quite low:

Assumption #1 From the seven million albums sold, there are 3.5 million Missy fans.
Assumption #2 Assume that 80 per cent of these fans live in the United States (2.8 million)
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Assumption #3 Of these 2.8 million fans, 60 per cent might have cell phones (1.7 million).
Assumption #4 Of these 1.7 million fans, 10 per cent might have access to a credit card
(170,000).
Assumption #5 Of these 170,000 fans, five per cent might have heard of the ME Campaign
(8,500).
Assumption #6 Of these 8,500 fans, 10 per cent to 20 per cent might register for the campaign.

Keeping in mind that these figures are estimates inferred from the case. Students may come up
with different numbers using different assumptions. Still, one could project that there may be only
850 to 1,700 registrants in all, and the potential for reaching a large audience is limited.

If students are then asked to apply a similar set of conditional probabilities for the Euro 2004 and
Match Centre applets, they should notice a wide disparity between expectations and probable
outcomes. In comparing the two campaigns, students should consider the following.

• The number of soccer fans in Europe is very high. The case states that, for Euro 2004, “more
than one million event tickets were sold to fans in 100 countries, and television broadcasts of
the 31 games reached a cumulative audience of approximately seven billion viewers.” (In the
United Kingdom alone, major soccer matches attract between eight million and 20 million
viewers.)
• The penetration of cellular phones, especially with advanced features, is much higher.
• Leisure spending on mobile media is much higher than the United States.
• Access to content is not limited to credit card holders.
• Registration is simple (enter the text code and press start).
• Cross promotion of soccer websites should generate higher awareness.

Therefore, given that the Euro 2004 campaign attracted more than 63,000 subscribers, one would
expect the number of Missy Elliot campaign subscribers to be significantly lower. Using these
assumptions, the expectation of “hundreds of thousands” of subscribers was clearly unreasonable.

One point the instructor might pursue here is whether the ME mobile campaign sufficiently took
advantage of mobile technology, an important characteristic of which is to provide access
(location- and context-specific) anytime and anywhere. Content provided in the ME campaign,
such as wallpaper and ringtones, consisted of static marketing elements and was not unique
compared to what could be found on the Internet. In comparison, the Euro 2004 Match Centre
provided useful information that truly leveraged the unique advantage of cellular telephony,
namely mobility and location- and context-specific content.

At this point, it might also be helpful to discuss what differentiates mobile marketing
communications (MMC) from traditional marketing communications practices. Exhibit TN-3
provides a framework with which to do so, based on the dimensions of interactivity level and
location specificity, and helps to illustrate the unique characteristics of MMC versus traditional
approaches.
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Relative to the information-heavy and entertaining nature of the Euro 2004 Match Centre,
students may also point out that there was minimal content in the ME campaign, that added value
to the consumer. It is telling that most, if not all, the ME campaign objectives listed in the case
are brand- rather than consumer-focused.

Another approach for framing the discussion of what makes MMC a unique marketing
communications medium is the concept of interactive communications and uses and gratifications
theory. Uses and gratifications theory proposes that consumers are goal-oriented and that they
draw on mass media to satisfy their needs for information and content, escapism or diversion, play
and entertainment, and identity formation.1 This theory adds support to the popular belief that
marketing communications and entertainment are fast becoming one in the same. This also
relates well to MMC in that the mobile marketing campaigns discussed in the case are primarily
content- or entertainment-driven. However, the ME campaign seems to be lacking in this area.

ADDITIONAL QUESTIONS

1. What is the Brand in the Hand concept? What does this mean to adidas?

As wireless infrastructures and mobile devices such as cell phones evolve, so will branding
strategies by firms such as adidas. The convergence of handheld mobile devices with the Internet
is now making possible a whole new array of marketing applications and offerings available to
brands. The brand-in-the-hand concept means that, with this convergence of wireless mobile
devices and the Internet, marketing communications and branding efforts by companies like
adidas now can be delivered to consumers in their pocket, in their car, or in their hand.

As discussed in the case, global brands such as McDonalds, Coca-Cola and adidas have begun to
explore the use of MMC strategies. One reason for this movement is that MMC enables relatively
more personal and interactive brand-consumer communication than does traditional marketing
communications. Another reason is that MMC strategies can be tailored specifically to
consumers’ location or consumption context.

An interesting point of discussion here involves the question, “What is a brand and what
specifically do we mean by ‘branding’?” On one hand, students may say that branding is about
building an image of the company or product in the mind of the consumer. Students may also
bring up the concept that consumers sometimes seek to form relationships with brands and the
idea that branding is about fostering or strengthening these relationships (e.g. relationships
manifested through some degree of interaction between the brand and the consumer).

On the other hand, students may suggest that branding within a mobile marketing context and
MMC should be about more than merely building brand awareness and image by delivering
content to consumers in a passive manner, and that driving consumer response by emphasizing
consumer response and purchase at the retail level (e.g. creating retail incentives by providing

1
Michael Solomon, “Consumer Behavior,” Prentice Hall, Upper Saddle River, New Jersey, 2004.
Page 10 8B05A24

purchase incentives or communicating with the consumer in the specific context of purchasing
products, perhaps in the location of a retail store selling specific adidas products) is really the true
essence and objective of branding.

Exhibit TN-4 illustrates a way to structure this discussion of branding and the concept of brand-
in-the-hand by linking it to various degrees of consumer response2 in a virtual cycle of brand
development. The activation stage would illustrate a first-order response, for example where a
product offer yields consumer response in the form of a retail purchase. However, a variety of
other branding objectives might include building brand awareness and enhancing brand attitudes
among consumers or building relationships and interactions between consumers and brands, and
these involve second-order responses.

2. How important a role should MMC play in adidas’ overall brand communications strategy? Is
MMC just a novel approach to marketing communications and a marketing fad (is it merely
communicating the same message in a new format), or should it be an integral part of adidas’
overall brand communications strategy?

Recent studies3 have indicated that the Internet is an effective mechanism for instituting global
marketing strategy by nature of its ability to centralize communications as well as customize
messages efficiently to local markets. However, the question remains: to what extent is MMC a
global or local medium? In adidas’ case, it can be both, particularly given the universal nature of
sports and music appeals. For instance, a European MMC campaign might feature David
Beckham, where a similar U.S. campaign might feature an athlete such as the NBAs Tracy
McGrady.

Here the instructor might shift the discussion back to what are the objectives of such global and
regional or local branding strategies (e.g. to get consumers to take action — action-based and
behavioral) or to provide information (e.g. attitude formation, brand building) and the role of the
cycle of attitude formation and brand building, brand-consumer interaction, and consumer
response and activation as illustrated in the virtual branding cycle in Exhibit TN-3.

POSTSCRIPT

Managers within adidas’ Global Media group felt that as handheld device technology evolved and
as mobile phone penetration continued to grow in markets across the globe, adidas would need to
continue to use the mobile platform for communicating and interacting with its core 12- to 24-
year-old consumer.

Even after the disappointing results from the ME campaign, the adidas Global Media team
continued to aggressively develop mobile marketing campaigns for upcoming events. Adidas
2
For a discussion of first- and second-order consumer response in interactive marketing, see Michael Solomon, “Consumer
Behavior,” Prentice Hall, Upper Saddle River, New Jersey, 2004.
3
See George Yip and Anna Dempster, “Using the Internet to Enhance Global Strategy,” European Management Journal,
2004, 23(1), 1-13.
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management seemed to recognize the shortcomings of the ME campaign in the United States (e.g.
lack of cross promotion of the campaign employing more wide-reaching media such as print and
TV, the relatively cumbersome registration process, the potentially narrow appeal of Missy Elliott
to the younger, female audience) and commented that mobile marketing was still at a stage where
they felt they needed to experiment, learn and apply their learnings to subsequent mobile
campaigns. At the time of this teaching note, adidas management was busy developing plans for
a global mobile marketing initiative related to the 2006 World Cup.

ADDITIONAL REFERENCES

F. Sultan and A. Rohm, “The Coming Era of ‘Brand in the Hand’ Marketing,” Sloan Management
Review, 2004, 47(1), 83-90.
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Exhibit TN-1

CAMPAIGN PERFORMANCE METRICS

Campaign Metrics
Coca-Cola’s Flaschenpost Promotion • Six million downloads

adidas’ Yahoo homepage takeover • Five million downloads of 30-second Impossible is

Nothing commercials (average 22 seconds viewed)
adidas’ Road to Lisbon (2004 European • First month, 10,000 ringtones downloaded for less
Football Championships in Lisbon) than $1 per ringtone
• 12,000 downloaded clips (10 per cent of 120,000)
for Club Nokia in Germany
adidas’ Euro 2004 Match Centre (applet- • Subscription: €$5 for two months use to access
based) Euro 2004 content (real-time scores) available in
five languages.
• Actual subscriptions to the Euro 2004 program
exceeded adidas’ estimates (63,000 subscribers)
• Perceived lack of focus on adidas’ 12- to 24-year-
old target audience

Exhibit TN-2

Traditional Marketing Communications Traditional Marketing Communications

• Unless it is entertaining or offers some level • Has grown up with traditional advertising
of value, this consumer perceives traditional • Also perceive traditional advertising
advertising messages as “clutter” and tunes messages as “clutter” unless it offers some
them out level of value
• Don’t access as much traditional media
(TV, print) as previous generations

Mobile Marketing Communications (MMC) Mobile Marketing Communications (MMC)

• Use cell phones for gratification and • Use cell phones for more functional
diversion (e.g. social networks, purposes
entertainment) • Relatively less familiar and savvy with
• Savvy with regards to the Internet and use emerging technologies
of cell phones
• Cell phones are an important part of their
life
• Extensive social networks
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Exhibit TN-3

COMPARING MOBILE MARKETING TO TRADITIONAL COMMUNICATIONS

Location
Specific

Out of Home / Mobile Marketing

Billboards Communications
(MMC)
Low High
Interactivity Interactivity
Mass Communications Web-based / Fixed
• TV
Internet
• Print
• Radio

Location
Independent

Exhibit TN-4

BRANDING CONCEPTS

Brand Awareness and Image

Brand
Development
Through Mobile
Marketing

Brand-Consumer Consumer Response

Interaction and Activation