Brands That Over-invest in Online Ads Switch to Billboards
In an article by Marketing Week, Adidas admitted they over-invested in digital advertising. Adidas admitted that their focus on efficiency rather than effectiveness led them to over-focus on ROI and performance based digital. This came at the expense of brand building and general brand awareness. By only caring about short-term goals, Adidas spent their time focused on hitting specific KPI’s as opposed to focusing on the best interest of their brand overall.
Recent econometric models and long-term marketing strategies show a focus on brand activity results in better long-term sales. Adidas found brand activity drove 65% of sales but their budget was mainly spent on performance based marketing. With a split of 77% to 23% with an emphasis on performance marketing, Adidas found splitting their budget 60% and 40% with an emphasis on branding to be the best split based on new econometric and marketing models. With a focus on branding and brand awareness would help sustain Adidas long-term.
Adidas also found that they were over-invested in targeting their existing buyers. Adidas found that 60% of their sales were actually from new customers. Other problems Adidas ran into were that individual, targeted sports marketing wasn’t driving sales for those targets, but brand awareness advertisements were. They had also created a price sensitivity with targeted sales.
With this knowledge, Adidas invested less into digital advertising and more into brand building and brand awareness tools. One of the best brand awareness tools is bulletins, posters and digital billboards. Billboards have high reach as well as frequency within their markets, creating the cheapest media vehicle to build brand awareness. Adidas also invested more into video, which performs very well when mixed with billboards. Read more about How Billboards Boost Digital Video Campaigns.
