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Nike Needs To Take Care of Business

04/15/2013

TWLive by the endorsement of athletes, die by the actions of the athlete.

Nike has long hitched its wagon to the star power of athletes. Of late however Nike’s stable includes several athletes who may be as well-known for their mis-steps than their success in their sport – including Tiger Woods, Lance Armstrong, Kobe Bryant and Oscar Pistorius.

As an established brand it is increasingly difficult to stay fresh, relevant…even edgy. The stakes are high. The downside of error in branding is deep.

Nike is now a behemoth with $24 billion in annual sales rather than an upstart that famously used unconventional marketing tactics to gain attention and favor. Nike spent more than $3.2 billion to run ads in major media from 1995 through 2012, according to the Kantar Media unit of WPP, including $115.7 million last year, an increase of 20% from $96.3 million in 2011.

Given Nike’s size and the stakes involved one must question the company’s vetting process with athletes.

Nike’s problem may lie with its success. Under Armour has taken a slice of Nike’s business in apparel. When UA figures out how to do footwear (UA has had several less than successful attempts at footwear over the past few years) Nike will be in even bigger trouble.

If UA continues its growth rate it may find itself in the same spot Nike is today – challenged to keep the brand fresh, relevant and edgy. Until then UA plays the role of the upstart when compared to Nike.

Last month Nike took heat for an ad featuring Tiger Woods. The ad, using a quote Woods says about his game, was in recognition of Woods regaining his #1 ranking among pro golfers.

Both Woods and Nike could have the last laugh here. In sports and business – winning does indeed take care of everything…or at least everything that those outside are concerned about.

Time will tell how the battle between Nike and Under Armour plays out. Until then Nike might want to ramp up their background checks on prospective sponsorships. Business is difficult enough with fighting the headwinds of celeb crash and burns.

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One Comment leave one →
  1. Emily Braun permalink
    04/15/2013 10:41 am

    In 1989 Zsa Zsa Gabor was a celebrity associated with a product the company I worked for produced. Then she self destructed by slapping a cop after a traffic stop. It is hard to know in which direction a celebrity may self destruct, and vetting may not reveal the path the celebrity will take. It is a red flag to me signalling overpricing, and a trade off of quality to the price if a product relies on celebrity endorsement.

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