The Drum Awards for Marketing - Extended Deadline

-d -h -min -sec

Celebrity Endorsement Brand Strategy Adidas

What Adidas’ Yeezy profit plunge means for the future of celebrity partnerships

Author

By Hannah Bowler, Senior Reporter

February 22, 2023 | 6 min read

As Adidas faces a potential $1.3bn revenue loss from its failed Kanye West partnership brand, top marketers rethink celebrity collaborations.

Ye pictured with Adidas brand president Eric Liedtke

Kanye West pictured with Adidas brand president Eric Liedtke

Kanye West’s Yeezy line used to bring Adidas an eye-watering $2bn a year in profit and account for 8% of its total revenue. The six-year partnership was once a shining example of celebrity deals done right.

In September the German sports retailer was at the center of a scandal over its inability to act when its biggest celebrity collaborator Kayne West made a series of anti-Semitic remarks. Two weeks after the initial comments were made, Adidas cut ties with the rapper and wound down production of his Yeezy-branded products.

Now the retailer is left with unsellable Yeezy inventory. If Adidas decides not to sell its Yeezy stock, it’s expected to lose $1.3bn revenue or $533m in operating profit.

The potential financial loss to Adidas has reopened debates about the future of celebrity brand deals and endorsements, we asked marketers what's next.

Andrew Capper, creative director and co-founder, Echo

Celebrity endorsements as we know them may become a thing of the past. The future is celebrity-owned or part-owned brands. There’s nothing like having skin in the game to go the extra mile and that mutual interest and benefit keeps everyone in line.

Plus it’s a richer, more authentic and more powerful story, showing they’re invested for the long term because they genuinely believe in the product. Ryan Reynolds and Aviation Gin, and Jay-Z and Armand de Brignac champagne are arguably more successful because they are shareholders, not just guns for hire.

Suggested newsletters for you

Daily Briefing

Daily

Catch up on the most important stories of the day, curated by our editorial team.

Ads of the Week

Wednesday

See the best ads of the last week - all in one place.

The Drum Insider

Once a month

Learn how to pitch to our editors and get published on The Drum.

Paul Domenet, partner and creative strategy director, Free The Birds

Ever since there has been brand communication, there have been celebrity endorsements. But for a brand to be truly credible, memorable, and lasting it has to have its own personality, not rely on someone else’s. It has to have its own values, its own reason to be famous and for that, it needs to find its own point of difference, and attitude and communicate that with imagination and originality or it is purely a paid-for prop. The brand needs to be the star.

David Jenkinson, partner, design and experience at Pearlfisher London

We are seeing a phenomenon of celebrity brand fatigue, given impetus by worst-case scenarios such as the recent Ye scandal, reminding brands to be cautious when it comes to partnerships. However, celebrity brand endorsement can and will continue to hold significant potential value if done in the right way.

Nike’s collaboration with Serena Williams, who partnered in 2003 when the sports icon was just 21, sets an example. Not only did this endorsement have clear justification in Williams’ profession, but it spoke to a greater mission and narrative of the empowerment of black women in sports. It also broke a mold, and Williams’ bold style expressed through her striking Nike ensembles over the years, paired with her bold moves on the court, has pushed the boundaries of sportswear and helped propel both partners further into icon status.

Adam Ryan, former head of brand for the F2 Freestylers and current head of Pentawards

Ye’s collaboration with Adidas was, initially, so successful because there was a symbiosis between the personality behind Adidas’ brand and Ye’s music, personal style, and investment in the fashion industry. It had substance.

Louis Vuitton’s appointment of Pharrell Williams as its new men’s creative director earlier this week has taken the notion of celebrity partnership to new depths. Pharrell’s influence on the fashion world from co-founding the Billionaire Boys Club and working with the likes of Nike and Tiffany also makes him a perfect match for Louis Vuitton.

The future of celebrity-branded partnerships will, more than ever, rely on substance. Provided this is prioritized, we could see more celebrities crossing over industries and taking a more active role in the brands they partner with.

Celebrity Endorsement Brand Strategy Adidas

More from Celebrity Endorsement

View all

Trending

Industry insights

View all
Add your own content +