SBD/April 15, 2013/Marketing and Sponsorship

Nike Looks To Retain Advertising Edge In Face Of Audience Fragmentation, Changing Demos

A survey showed Nike is fifth with consumers ages 18 to 24
Nike recently has had a "harder time standing out amid the clutter, bringing out fewer ads that are widely deemed hot, or cool,” according to Stuart Elliott of the N.Y. TIMES. Nike is now a “behemoth," with $24B in annual sales "rather than an upstart that famously used unconventional marketing tactics to gain attention and favor.” Univ. of Oregon Warsaw Sports Marketing Center Dir Paul Swangard said, “The maturity of the brand creates an inherent challenge because you’re no longer the new kid on the block.” Swangard added as a result, Nike execs “run the risk of being the victim of their own success.” The company’s “longevity as a top-flight marketer points to another struggle: demographics.” The consumers who “loved its products, and ads, in the 1980s and 1990s are now older, while consumers who are younger -- the age group most likely to discuss ads -- perceive Nike differently.” A recent loyalty engagement survey conducted by N.Y.-based Brand Keys showed that “among athletic-shoe brands, Nike ranks second with consumers ages 45 to 65, third with consumers ages 25 to 44 and fifth with consumers ages 18 to 24.” Another problem “facing Nike is that the way the brand speaks in ads is no longer that novel.” Interbrand Global CEO Jez Frampton said that it often appears Nike is “competing against itself.” Nike VP/Global Brand Marketing Davide Grasso said there is “tone-of-voice convergence” between Nike and other brands, making it “much more difficult to catch people’s attention.” Elliott notes if there is a “perception that Nike’s marketing efforts have lost some of their novelty," products like Nike iD, FuelBand and Flyknit shoes "have recently helped Nike improve its financial performance.” Nike, like all marketers, also is “coming to terms with the biggest shift in the landscape: the fragmentation of audiences, and media" (N.Y. TIMES, 4/15).

ON THE WATERFRONT: In Portland, Steve Duin wrote a “slobbering gaggle of bureaucrats” wants to put another $80M in Nike's "petty cash drawer, hoping to entice the company to expand into South Waterfront.” The idea is “unbelievable” and “utterly unrealistic.” Duin: “Hold out for $250 million, Nike. You might as well. … You have all the leverage.” If Nike “elects to expand into South Waterfront, imagine the restaurants, retail shops, marketing firms, and sports and apparel midgets that would follow the company to the water’s edge, eager to cater to its needs and feed off its charisma.” Nike, “as usual, is setting the rules” (OREGONLIVE.com, 4/13).
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