This month's football World Cup in Germany will showcase the branding tactics and marketing ploys adopted by the leading sporting goods companies. As the big three lock horns, German brand Adidas hopes its combination of geographical location and football heritage will pay dividends. Joe Ayling reports.

The FIFA World Cup 2006 is expected to attract a worldwide audience exceeding one billion, with 32 countries having qualified for the finals in Germany.

It's not just skilful Brazilians and speedy Spaniards on view either; seven major sporting goods companies are seizing the opportunity to climb up the popularity ladder themselves.

Aside from kit and player sponsorship, the likes of Nike, Adidas and Puma will splash their logos across posters, banners, billboards and television advertisements surrounding the event.

The newly formed Adidas Group, operating on home soil and official partner, supplier and licensee status for the 2006, 2010 and 2014 tournaments, looks strong.

Market analyst Chris Svezia, of Susquehanna Financial Group (SFG), says: "Adidas is spending a considerable amount of money in marketing and sponsoring teams. It has the edge on its own turf and the leading market share in football generally.

"Puma will see the opportunity to gain some ground and market presence too. The company is sponsoring several teams and has a strong heritage in Germany."

Puma has the strongest presence in terms of shirt sponsorship deals, supplying 12 of the 32 nations qualified for the finals. Other lesser-known combinations, of Joma with Costa Rica and Marathon with Equador, have also been secured.

Adidas will sponsor six teams in Germany, with Nike backing eight teams, including defending champions Brazil, Australia, and USA. 

Italian brand Lotto has signed deals with Ukraine and Serbia and Montenegro, while England has continued a long-standing contract with domestic brand Umbro - which is also sponsoring Sweden.

Corporate dominance
Crucially, Nike has World Cup favourites Brazil on board - whose superiority in class to possible Adidas victors Argentina, France or hosts Germany aptly mirrors a corporate dominance off it.

However, Adidas concedes that it is not necessarily pinning its hopes on a brand-clad captain lifting the trophy aloft on domestic turf.

Adidas spokesperson Anne Putz told just-style: "As we are the overall sponsor and licensee of the World Cup, if the teams we are sponsoring get far it will help us - that is a given - but you have to look at the whole picture, we are not depending on the success of one nation."

Adidas Group's slightly increased marketing spend for the competition - of 14.2% to EUR142m (US$266m), from 13.8% before the FIFA World Cup in 2002 - does not include any marketing of its Reebok brand, indicating that brand segregation at the group will remain intact for the time being.

Returns on investments are projected to result in a 30% sales leap for Adidas' football merchandise, Putz said: "We are expecting sales of EUR1.2bn on football products alone this year."  

Nike, which leads the sporting goods market overall, has improved "soccer" revenue from US$40m in 1994, and its current value of US$1.5bn (EUR1.17bn) only slightly falls short of Adidas.

The company has rolled out a series of characteristic television and web ads called Joga Bonito featuring former star Eric Cantona and current idols Wayne Rooney and Ronaldinho.

Nike spokesperson Morgan Shaw said: "The World Cup is our biggest initiative by far, it is an important period for Nike and for soccer as a whole."

Adidas' winning streak
However, analysts believe that despite Nike's efforts, Adidas is set to bear most fruit from the tournament, which starts on 9 June.

Svezia told just-style: "It is always tough to say whether the return on marketing investment will be worthwhile and companies are always quite apprehensive.

"Adidas, on the other hand, can look back to 2002 and be reassured by a top heritage in football and a headquarters in Germany itself. The company will spend a lot to support and grow its market share.

"On the back of marketing at the FIFA World Cup 2002 in Japan and Korea, Adidas gained a leading market share in Japan, overtaking Nike. It has also embedded itself in football and other categories throughout Europe."

It seems Adidas' track record on the football World Cup "pitch" proves a lot, but the full effects may not reverberate for a few years, as with Japan.

Meanwhile, Nike continues to show its merits globally and "tick" every box with glamorous advertisements and Puma has a strong presence with teams, numerically at least.

The big three cannot really fail to impress at the competition, which is a marketers dream, but home advantage is always useful in sport.

By Joe Ayling.