Derrick Rose Injury Delivers Blow To Olympic Hopes For Adidas

http://www.forbes.com/sites/kurtbadenhausen/2012/04/29/derrick-rose-injury-delivers-blow-to-olympic-hopes-for-adidas/

 Every four years the world’s greatest athletes gather to compete in the Summer Olympics. This year’s event in London will feature stars in track and field, soccer, tennis and more. The Olympic competition extends outside the playing arena to the shoe and apparel market where Nike and Adidas compete for their own kind of gold on the backs of the athletes each company endorses. 

The ultimate rock stars of the London Games are expected to be the U.S. men’s basketball team, which will feature Nike athletes LeBron James, Kobe Bryant and Kevin Durant. Adidas was banking on Chicago Bulls point guard Derrick Rose to be its Olympic basketball stud, but a torn ACL in today’s playoff game against the Philadelphia 76ers will shelve Rose for the Olympics. This comes on the heels of another Adidas athlete, Dwight Howard, getting knocked off the U.S. team after back surgery in April. Chauncey Billups, also with Adidas, will miss the Games after tearing his Achilles tendon in February.

The Rose injury is a crippling blow for Adidas. Major sporting events like the Olympics and World Cup are prime opportunities for Nike and Adidas to showcase their talent. The German apparel company made Rose its marquee athlete in February when it signed the 2011 NBA MVP to a 13-year worth $185 million that could net Rose more than $200 million after royalty payments. The deal kicks off with the 2012-13 NBA season.

Adidas badly lags Nike in the U.S. basketball shoe market with only 4.5% of the U.S. market in March. Nike has a stranglehold in the U.S. with 91% of the market including the 58% share of the Jordan brand, which is owned by Nike. Adidas is hoping Rose can be a transcendent athlete for the brand as Michael Jordan was for Nike.

Adidas will have to sell a lot more of Rose’s signature sneaker for the deal to make sense from economic standpoint. Wholesale sales of Rose’s shoe were $25 million in 2011 in the U.S. compared to $40 million for Bryant’s shoe and $90 million for James’ Nike kicks. Everybody is looking up at Jordan though where wholesale sales were $1 billion last year.

Does Rose just represent the basketball shoes or the brand as a whole?  Do you think it was worth the $200 million for them to sign Rose?

In response to Christine Sullivan
If you were a business owner would you look to advertise your business online? What benefits do you see from online advertising?

There are many businesses that have been around for years and years, and get advertised pretty much solely from word of mouth.  The owners have a basic business plan, that just works.  These businesses have been successful for many years, and will be for another many.

Most businesses today though, have a huge need to get their name out.  Billboards can work, TV ads can work, but they all are expensive and it is tough to narrow down the target market.  The internet however is a different story.  People voluntarily give their information about all of their demographics.  This is an advertiser's fairy tale, as they can cater to a very small group of potential customers.  

The next trend is advertising on mobile phones.  There are some discrepancies on how to do it though, as the screens are so small one can't view an ad and text at the same time.  

How do you think this issue will be solved?  When do you expect the mobile phone advertisements to skyrocket?  Or do you believe it has already happened, or there isn't much potential in it?

In Response to Lyndzi
Can you think of a store that has drawn you in because of a pleasant ambient scent? What do you think the target market of that store consists of?


There are many stores that do this.  In a male's point of view, a nice scent still isn't going to get them to buy clothes they don't want or need.  At the same time, if we walk past a food place that smells very appealing we are much more likely to stop in.  Subway pumps the fresh bread smell into the store and outside onto the street to remind potential customers that they bake their own bread in each store and the bread is fresh.  
Another example of this are the waffle cabins that are now located at many ski slopes.  There is a machine that is very similar to a fog machine that pumps a syrup smell that reminds you of a home cooked meal into the air.  
This aroma spreads quite far and makes people realize how hungry they have become since they started skiing. Skiers also have more money so they have more disposable income and are therefore more likely to make an impulse buy which is what these companies try to get the consumer to do with the aromas.  
Do you feel more likely to buy from a retail store that smells different?  Can you walk by a food place that smells good without looking at the menu?

Gannett drops in profilts, rev: Strong TV advertising couldn't offset slump in print

http://www.bloomberg.com/news/2012-04-16/gannett-falls-most-in-2-months-as-profit-falls-25-on-ad-revenue.html

Big broadcaster/publisher Gannett saw profit and revenue slide last quarter as stronger TV advertising couldn't offset a slump on the print side early in the year.

Net income fell 24% to $68 million from $90 million, in part on $20 million in restructuring costs. Revenue eased 2.6% to $1.22 billion from $1.25 billion.

Broadcasting revenue of $176 million rose 7.5% on strong advertising demand, the company said Monday, citing higher auto spending, advertising associated with the Super Bowl, and an increase of $3.8 million in political ad demand. Gannett owns 23 stations covering 18.2% of the U.S. market.

Retransmission revenue rose 17% to $22.8 million. Television station digital revenues grew 6.4%.

Based on current trends, Gannett expects the percentage increase in total television revenues for the current second quarter to be in the high single digits compared to the 2011 period.

Broadcast operating income of $72.6 million, was up 14.4%.

In publishing, Gannett owns 82 daily papers led by flagship USA Today. Revenues fell to $874 million from $929 million reflecting soft advertising demand due in part to the tepid pace of the economic recovery. January was particularly weak and although activity improved in February and March it wasn't enough to overcome the slow start to the year, said CEO Gracia Martore.

Advertising revenues totaled $551.4 million compared to $601.7 million in the first quarter of 2011. Advertising revenues in the U.S. were 8.3% lower in the first quarter. At Newsquest, the company's operations in the UK, advertising revenues declined 6% percent, in local currency.

Digital revenues in the segment rose 12.5%.

According to market reports Gannett has had a few bad years now.  Is TV marketing just not as successful as it used to be?  What will be the next latest and greatest marketing scheme on TV?

NFL to Permit Advertising by Casinos During Next Two Seasons

http://www.usatoday.com/sports/football/nfl/story/2012-04-13/casino-advertising/54251646/1

The National Football League will allow teams to accept advertising from casinos during the next two years.

A memo sent to all 32 teams yesterday said franchises could sell ads in game-day programs, on club-controlled radio and in stadiums. The casinos must be in a team’s market. Under the altered policy, advertisers can’t take bets on any sports other than horse and dog racing.

“We remain steadfast in our opposition to the proliferation of gambling on NFL games,” Brian McCarthy, a spokesman for the NFL, said in an e-mail last night. “There is a distinction between accepting advertising in a limited fashion and gambling on the outcome of our games.”

Other state-licensed gambling establishments will also be able to buy ads, the memo said. Players, coaches and other team and league employees are not allowed to appear in any of the ads or endorse the entities or their products.

Teams are already able to sell ads to horse and dog-racing tracks, municipal lotteries and off-track betting organizations that don’t take wagers on sporting events.

Is this “splitting hairs”?  If gambling is allowed to be advertised should it not be endorsed by the league?

In Response to Rebecca's Post

If this trend continues, what kinds of things will you do in order to cut back on the money you spend weekly on gas? Do you think that people will change their lifestyles to save money?

Gas prices were at record highs around 2005 until 2007.  During this time period automakers realized people's demands are changing.  The trend which used to be SUVs and Minivans, was starting to change.  People wanted smaller more affordable cars that were more fuel efficient.  The auto industry responded in two different and unique approaches.  The foreign manufacturers listened to the wants and needs of the customers.  Toyota created the Prius, Honda created smaller more efficient cars, even the luxury cars such as BMW, added turbos and cut down on the actual size of the engines.  

The American manufacturers on the other hand, tried to push their cars onto the consumers.  This proved to be devastating causing General Motors to declare for bankruptcy, Chrysler nearly went out of business, and Ford nearly going under as well.  After this scare, they responded in a huge way. They created some of the best alternatives out there.  The Chevy Volt is truly revolutionary, and is now a company other competitors are trying to catch up to.  

Although consumers changed some, people still drive by themselves, public transportation budgets are still being cut.  

What is the price of fuel that would really create a change in the "American way"?  Is it $7 a gallon?  $10? $20?  There will be a point in which people will look to carpooling and public transportation again as most other countries in the world do.  Do you see American's having to face that fact in the near future?

In response to Joe's Post-
Do you think Billboard Marketing should be a top choice for marketers to use?

I feel billboards have been gradually declining.  Yes they are a great way to get many people to see certain advertisements, but it is impossible to appeal to a unique crowd.  People of all demographics drive on streets so it isn't like Facebook or other avenues that are able to have more specialized ads to hopefully appeal to the potential customer more.  Many years ago Vermont outlawed billboards, and it is illegal for there to be a billboard in the entire state.  New Hampshire is considering passing a law similar to this as well.  Not only are the billboards a detraction from the state's natural beauty but they are a distraction to drivers driving down the highway as well.

Although billboards are still a very viable option to get your name out, it is quite expensive and may not be the best choice.  As time progresses the alternatives will continue to improve whereas billboards don't have much more they can do.  Hopefully billboards will become a thing of the past, and make our nation's highways look a tad bit nicer.  

Do you agree billboards are "ugly"?  Do you think the pros outweigh the cons?