Months after a roughly $1 billion marketing tab sent Adidas stock plunging, the sportswear giant is facing its next major test: proving that the hefty spending set the stage for lasting benefits.
When Adidas reports its quarterly earnings at the end of this month, investors will be looking for signs of sustained momentum from a push that included supplying jerseys for 14 teams, fan events and an ad campaign starring actor Timothée Chalamet alongside soccer stars like Lionel Messi.
Chief Executive Bjørn Gulden recently defended the 30% spike in marketing and point-of-sale expenses, shaking his head when asked about the subject.
"We have to remember that if we spend 2, 3, 4, 500 million, whatever the number is, it is not for the event. It's for the future of the brand," Gulden said last month at a Fast Company conference in New York.
The company also noted in its late-July earnings report that its marketing spending levels will normalize in the second half of the year.
Some outside observers are supportive. Adidas's marketing spending is a useful expense to support the brand's new products and brand health, Morningstar analysts said in March.
The company's brand equity is improving, supported by the World Cup marketing campaign, Deutsche Bank analysts wrote after the company posted lower-than-expected earnings in late July. "We believe this will be viewed as a period of solid outperformance for Adidas and the investment in marketing a steppingstone to further rebuilding the global relevance of the Adidas brand," they said.
The analysts added that they believe there is still EUR250 million to EUR350 million, equivalent to $280 million to $393 million, of World Cup-related sales to be delivered in the company's third-quarter results.
While immediate sales could provide a near-term boost, it will take time to determine whether Adidas's major investment in its brand moved consumer sentiment in a lasting way.
Buzz about the brand among U.S. consumers received a modest lift during the tournament but has since returned to normal levels, according to research firm Morning Consult.
"Men's favorability and purchase consideration rose modestly during the tournament and stayed elevated into September," a Morning Consult spokeswoman said. "Women's favorability dipped during and right after the tournament before recovering in September, and their purchase consideration drifted down slightly across the whole window. If the marketing broadened Adidas's appeal, it landed more with men."
Adidas was one of many major spenders making big marketing bets during the World Cup. Other official sponsors including Coca-Cola, Hyundai and Visa mounted major campaigns, but so did Nike and other non-sponsor brands. Nike's program spanned 12 weeks and featured stars like Kim Kardashian and athletes including Cristiano Ronaldo.
Morning Consult said Nike's favorability has shown a downward drift across the window beginning before the tournament and through September. The brand also saw a bump in buzz during the tournament, which faded afterward to lower levels than before.
Companies like Adidas and Nike don't just have rivals of their own size to worry about anymore, said Mark Beal, a Rutgers School of Communication and Information associate professor who formerly was a partner of a sports public relations and marketing agency. Brands like Kane, Hoka and Lululemon have been eating away share and consumer attention, he said.
"There's so much competition now," he said. "It used to be two or three or four -- and now it's all the established brands, but then you have all these other brands that are scaling market share... They're gaining customers."
To make the most of the buzz around the World Cup, Beal said brands would be smart to engage Gen Alpha -- and their Gen Z or millennial parents.
"They are the next most important consumer in another few years as Gen Z ages a little bit," Beal said. "The Gen Alphas for sure, and the younger Gen Zs, they're still making decisions about brands they like, brands they prefer. They also have a huge influence on what is trending."
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