Last week, Adidas announced they were going all-in on digital advertising.

Chief Executive Kasper Rorsted said he was going to ditch TV ads and instead spend 100% of his budget on digital to capture younger consumers, a crucial demographic for the sports clothing line.

This way, he said, Adidas would quadruple e-commerce revenues by 2020.

“All of our engagement with the consumer is through digital media and we believe in the next three years we can take our online business from approximately one billion (euro) to four billion (euro) and create a much more direct engagement with consumers,” he said.

Predictably, the internet exploded.

It was a hell of a time to bet all your chips on digital marketing, said critics. Digital ad giants Facebook and Google are now embroiled in full-blown scandals and a quick glance at today’s CampaignLive reveals a headline which screams “Marketers must tell their boards 60% of programmatic spend is wasted.”

Critics have also pointed out that Adidas may also have its sums wrong. Just six per cent of Adidas’ current sales are online. (Adidas annual sales are about $17b, about $1b of which is the result of e-commerce.) Do they really want to spend 100% of their advertising money to support 6% of their sales?

Nay-sayers also pointed out that retailers would not be happy about Adidas spending all its money to support its own online store sales and provide no money to support theirs.

These are important points.

But to me, this debate centres around something even more fundamental than TV vs digital. It’s brand versus customer relationships.

For the rest of my article go to Smart Insights.

 

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