In-House Vs. External Agency
Nike outsources a strong majority of its marketing messaging to external advertising agencies. However, Nike has begun consolidating certain marketing mediums into in-house management structures, including social media content in 2013 (Joseph, 2014) and influencer marketing in early 2018 (Sweeney, 2017). Nike’s mainstream advertising began when Nike began picking up steam as a competitive athletic footwear brand in the late 1970’s. During that time, their advertising account was moved away from William Cain advertising to be managed with a newly-formed agency who would send Nike’s marketing strategy into the stratosphere. Wieden + Kennedy started their long-standing tenure by running three Nike advertisements in 1982 (Nudd, 2014) during the New York Marathon to support the brand’s growing presence in the running community. Wieden + Kennedy are still the agency of record with Nike after 36 years since their first television spots were aired.
Wieden + Kennedy has retained the position of Nike’s agency of record for over three decades, but other agencies have come up to bat for specific tactics utilized in Nike’s long history of break-through marketing tactics. To name a few that have been instrumental in the realm of digital marketing, R/GA, Anomaly, Laundry Service, The Program and Mindshare have all been agencies in the mix (Joseph, 2017). Nike, as of recent years, has started to consolidate certain tactics into in-house control, with the most notable one being social media in 2013. the reasoning Nike made such a move was to gain a more detailed understanding of their social media fan base, and follows a move by Nike to start investing more into digital initiatives and less into television media and other traditional mediums (Baker, 2014).
There isn’t much documentation on what Nike’s future goals and relationships with agencies and in-house projects, as Nike goes through great lengths to keep their marketing operations air tight from the eyes of competitors in the same markets they occupy worldwide. All that can be determined moving forward is that Nike utilizes both marketing management applications of in-house talent and external agencies with wide ranges of expertise and specialties.
Advertising Appeals: There have been two consistent elements folded into Nike’s creative appeals. When the company was founded, it was evident that appeals to artistry and technology were going to be main drivers of innovation for the brand, and this idea has permeated into everything that Nike does within its mixed marketing communication efforts. When observing these two creative pillars in today’s marketing mixture, Nike continually pushes the boundaries of artistic design and technological advance in unique ways their competitors cannot. One of the more exciting advancements in Nike’s technological growth have been steps into integrating modern metric tracking into sensors embedded into certain pairs of enabled sneakers. In addition to tracking distance, time, and steps of runners, Nike has been hard at work creating the HyperAdapt 1.0— the world’s first self-lacing shoe (Jones, 2017) Artistry has been a main focus of Nike’s marketing efforts, too. The NikeiD program originally started as an online-only option to creating your own customized pair of Nike shoes in many standard styles that Nike offers. In 2018, the Nike iD Direct Studio was launched in London allowing customers to build their own shoes in front of their own eyes, selecting colors and viewing them in real time (Carvell, 2018). This type of futuristic shoe shopping has become a main driver of the artistic driven mentality that Nike has had since their origin.
Creative “Bent” of Nike: The creative messaging utilized throughout Nike’s current marketing mix have always had subtle nods to Nike’s roots as a brand. This is seen clearly through their most recent marketing initiative around their newest VaporMax Air sneakers. Basing the commercial conceptualization around breathing, the advertisement is a running montage to athletes from all different disciplines, all united by the collective heavy breathing of Nike-wearing pros and amateurs. The Wieden + Kennedy advertisement was described by the agency as “an ode to the elemental force that pushes every athlete forward” (Beltrone, 2018). The commercial touches the hearts of Nike faithfuls by the onscreen tagline in the iconic Adobe Garamond font, “Air moves you”. In addition to its powerful branding that can evoke emotional appeal, Nike continues to focus on stories of heroism and triumph (602 Communications, 2018). Sometimes these stories are portrayed through sports’ biggest stars, and other times they are told by heroes who are more relatable and aren’t easily identified as a pro. The best example of marketing messaging that combines the power of both approaches is the 2017 campaign titled “Want It All” (see Appendix A for Video 1). It stars a young kid, who works his way through trials and tribulations of becoming a pro basketball player and earns the opportunity to play alongside Lebron James in a buzzer-beating game against the Golden State Warriors. This commercial is a blended approach to two messaging appeals that Nike consistently uses in its marketing mixture.
Advertising Design and Message Strategies
Beyond the conceptualization of Nike advertisements, most designs are straight-forward in mediums like direct mail and print. Through the 21st Century, Nike has used the futura font in most of their static advertisements. This font, once customized to Nike’s style, becomes a pivotal element to their art direction & creative style. By allowing taglines and copy to consume large portions of space, the messaging carries a more declarative tone, and expresses concepts like the heroism appeals, as well as success, victory, and individualism. The abrasive copy coincides with imagery that continually challenges art direction methods. Back in the early days of Nike’s print ads, the imagery was solely focused on the shoes. Advertising copy and the shoes would occupy a lion’s share of the space, but as the brand grew and started to represent the ideals consumers recognize Nike for, the advertisement imagery started to become more conceptualized and visually distinctive. This is seen through many of their print advertisements of the past 20 years. Some with striking visuals like an athlete lacing up her Nikes shoes preparing to outrun a tornado that’s right behind her, or a pair of laces that are tied to an invisible shoe with declarative copy stating “A racing shoe should be easy to forget”. These types of designs have become standard to Nike’s creative messaging and it continues to be a large motivator for individuals to believe in something unsurreal, and almost epic in proportions to what a normal shoe can do.
Usage of Traditional and Non-Traditional Media
Nike in 2017 spent $3.34 Billion in advertising and promotion costs worldwide (Statista, 2018) As they steadily increase their marketing expenditures, their sales and revenue continue to match alongside. Currently, Nike utilizes a traditional media approach that also coincides with non-traditional media that continues to add value to the overall marketing strategy of Nike worldwide. Some of the most common methods that Nike uses in traditional media is television,, outdoor advertising, sales promotions, magazines, and print media. One traditional medium that Nike has almost no exposure in is radio, as it can be hard to sell sneakers via a spoken medium. These methods tend to be staples to showcase Nike’s creative advertising messaging, and also carry the widest audience exposure rates. However, Nike has been on the forefront of new non-traditional mediums including social media, digital marketing, mobile apps, and guerilla marketing. One of the largest moves that Nike has focused on during the turn of the 21st century is providing an easier and more accessible online platform to shop on, and employing online marketing tactics in order to drive purchases on their website, nike.com. This still supplements most of Nike’s brick and mortar operations, third party wholesalers, and other licensed distributors that sell Nike’s products in store or online.
As the world’s population begins to transfer away from brick and mortar shopping to online retail, Nike has mitigated it’s own approach in order to ensure they’re not defeated by the collective exhale of declining wholesale selling. Nike has also made large moves with some of the largest online retailers in order to continually grow the profits they need. In 2017, It’s projected that Nike will partner with Amazon to sell a select amount of product through their platform (Wattles, 2017). This approach is designed to put Nike products into a competitive marketplace while also boxing out unlicensed and licensed third party sellers who may be pushing the product at a discounted value. Overall, the approach by Nike is well balanced and continues to shift ever so closely towards favoring online marketing as it continues to be a main revenue stream that has no signs of slowing down.
Usage of Sales Promotions
Nike, like many companies in the same competitive space, utilize sales promotions to stimulate revenue growth. Nike motivates customers by showing them savings benefits they can obtain by purchasing products within a certain time frame, providing savings through discount coupons and special offers. These tactics come during highly competitive and advantageous selling seasons, like the end of the year holidays in the United States, and early spring when activewear is starting to become in season for the summer. Because Nike is invested into so many seasonal sports such as running, football, soccer, tennis, golf, etc., Nike can offer different sales promotions for each of its departments especially when a sport is in season and is projected to sell more. Although it’s rare for Nike to sell their products discounted on their site, Nike attempts to make good by promoting free shipping when a consumer joins as a NikePlus Member. Additionally, they offer student and military discounts on their site in order to provide value to select targets. All of these are specific tactics to stimulate short-term responses and increase their sales.
A large share of Nike’s sales promotion happens at the international level. Specifically, at the end of their fiscal year in 2016, North America only accounted for 46% of sales, while western Europe was 18%, greater China at 12%, and other emerging Markets with 11% of overall sales. Central ; eastern Europe and Japan combined for an additional 7% (Vault.com, Inc., n.d.). With control of sales promotions worldwide, Nike must ensure that their promotional activities are efficient and continue to grow sales and revenue in markets that all have different perceptions of sales promotions and discounts when they see them.
Nike also implements different push and pull sales promotion tactics. A push promotion that Nike utilizes is discounting older model shoes in order to stimulate purchasing from wholesalers, distributors and retailers. A pull promotion Nike utilized was the “Nike+ Human Race”. This was an event that promoted the largest one day running event where people across the globe would all be encouraged to run a 10k. This level of participation from consumers aimed to ultimately build a promotion that stimulated the purchase of Nike shoes. Sales promotions works for Nike whenever they want to build brand promotions and increase the desire around their products. They want to induce the trade or consumers to buy their brand while encouraging their sales force to sell aggressively. Nike is known for being one of the best marketing brands in the world and this includes their effective sales promotion tactics.
In-House Vs. External Agency