Last week, Nike’s new ’I can’ slogan blew up in its face when the
sportswear group finally admitted it couldn’t shift the shoes piling up
in its warehouses, couldn’t handle the free-fall in its share price and
couldn’t keep spending dollars 890 million a year on marketing.
More specifically, Phil Knight, Nike’s sport-obsessed founder, announced
a dollars 100 million cut in his US marketing budget as part of an
effort to cut costs by a staggering dollars 325 million. Worse, Knight
chose to point the finger at marketing and - by implication - Nike’s
fledgling US ’I can’ campaign.
But is it fair to blame a positioning which is only three months old for
all these troubles? The writing was on the wall well before the
redoubtable Wieden & Kennedy unveiled the work. Not even the punchiest
of campaigns could single-handedly bring down a robust corporation so
quickly. Could it?
Knight, however, was taking no prisoners. ’Our problem has not been too
much marketing, but too much ineffective marketing,’ he said, adding
that marketing efforts over the past six months had not worked.
Both these statements could be - and have been - taken as sideswipes at
W&K, the agency that has been in bed with Nike in Oregon for the past 16
years. Dan Wieden’s empire has expanded through the years in tandem with
Knight’s: it has been Wieden and Nike, Nike and Wieden. But, like most
love affairs, the relationship has its rocky periods. And, like many
love affairs (outside of the White House), both partners fight shy of
talking about it.
’There was never any criticism intended of ’I can’ or of W&K,’ Graham
Anderson, Nike’s public relations manager, stresses.
Nike, however, made similar placatory noises a year ago when it bypassed
W&K to appoint the San Francisco-based Goodby Silverstein & Partners -
its first roster agency outside W&K. And it repeated them when Goodby
got most of Nike’s fastest-growing business, a fact that became
glaringly obvious when Goodby won Nike’s newest and most cherished
project in the US, a top-secret sub-brand called Alpha.
But to focus purely on Nike’s advertising misses the heart of its
current problems. To find this, you have to go much deeper than the
merits of a particular ad campaign.
Knight, a keen runner, and Bill Bowerman, his coach, started Nike in
1968. Named after the Greek goddess of victory and buoyed by
revolutionary Nike Air technology, success followed success and
quick-thinking ensured Nike stayed ahead of the game. When enthusiasm
for running faded, for example, Nike responded with shoes for other
sports and, as worldwide fashion trends tilted towards sporty gear,
Knight increased output and sales soared.
The past three years saw average sales growth of 34 per cent. Then came
the third quarter of the 97/98 fiscal year. Figures released last month
revealed that growth had faltered to only 6 per cent over the past nine
months. Great results by many standards, but not by the goal-obsessed
Nike. Management blamed the turmoil in the tumbling markets of the Asian
Tiger economies and swiftly moved to axe 1,600 jobs around the
But what they also have to face up to is that the future is not as
bright as it was. Fashion is swinging away from athletic shoes to the
so-called ’browns’ - outdoor shoes such as Timberlands or Wolverines.
Moreover, the patent on Nike Air ran out last year and, to cap it all,
its arch rival, Adidas, has recently staged a spectacular comeback,
especially in Europe.
Nike has become a victim of its own success. In 1996, it had 47 per cent
of the US athletic footwear market and sold more than a third of the
world’s branded games shoes. But it proved hard to be a rebel ’just do
it’ brand when everyone’s mum was wearing Nikes.
Tim Delaney, the executive creative director of Leagas Delaney - the
agency for Adidas - sums up Nike’s problem as: ’It’s about how to remain
a young irreverent sports brand if you’re ubiquitous.’
So, Nike did three things. It began selling its own ’browns’. It
diversified into clothing (both accounts now held by Goodby), and it
developed a new advertising strategy.
’I can’ was designed to be the caring, sharing, 90s version of the more
aggressive ’just do it’, first coined in 1988. This great democratic
rallying cry and the ’swoosh’ logo were suited to the Nike of the 80s.
Nike of the 90s had to be more universal. As one source close to the
business observes: ’These days, people do sport for a whole host of
reasons other than winning. For health, for companionship. ’I can’ tells
you to set your own limits. It tells you that what you achieve is up to
So, armed with a more empathetic positioning and a rapid, if slightly
behind-the-pace, diversification out of athletic shoes, Nike squares up
to the future. While staunchly defending ’I can’, Knight has also
promised a ’review’ of all marketing strategies and tactics.
No doubt, this summer will see a more sober Nike - and W&K. One which
will not make a staggering 150 films in 12 months, as it did last year,
or pull in the Brazilian national football team, plus the retired soccer
star, Eric Cantona, for just one commercial. But Nike has survived
pressure before. The question has to be, will W&K still be with it?
Mills on Marketing, p21.