This paper evaluates the New York Times coverage of the advertising campaign undertaken by the Nike company in 2007 to generate sale for its Nike+ sensor, used to help runners log and organize their training runs. Nike was one of many companies at the time that switched its focus away from traditional advertising outlets such as magazine advertisements and celebrity endorsed television commercials and instead shifted its attention to the potential of the web to create interactive consumer relationships.
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Nike is well known for large scale advertising campaigns of the 1980s and 1990s that made full use of traditional advertising vehicles such as television. Perhaps the most famous examples are the Michael Jordan commercials from the eighties and the Tiger Woods campaigns of the nineties.
In both campaigns, millions of dollars were spent not only on the celebrities themselves, but on the television networks that ran the commercials. In recent years Nike has changed its advertising focus to the Internet; web based advertising has generated record profits for the company, and has also create a closer, more stable and resilient brand loyalty amongst Nike consumers.
The company recognized the ever growing presence of the web as a staple advertising engine. Nike’s target market now spends most of its time on the web and on mobile devices, and the company has adjusted its advertising campaigns and advertising budgets to reflect this shift in consumer interest and attention.
This paper analyzes the article The New Advertising Outlet: Your Life, which appeared in the Media and Advertising section of the New York Times on October 14, 2007.
At that time the Nike company was at the vanguard of a new breed of advertising campaign that switched its focus away from traditional advertising outlets such as magazine advertisements and celebrity endorsed television commercials and instead shifted its attention to the web and local, in-person community based events to market their clothing, shoes and exercise equipment (Story 2007).
In 2007 Nike launched a campaign to create an interactive advertising and build relationships with consumers directly through its web site and other electronic based advertising and media channels (Story 2007). This campaign was so successful that Nike entirely transformed its advertising ethos and saved millions on its advertising budget (Story 2007).
Historically, Nike has spent millions on advertising. The advertising campaign covered in the article was incredibly successful from a cost savings perspective. In 2006 Nike spent just over 30 per cent of the $678 million it had earmarked for its United States advertising budget, which would have gone to traditional advertisements on television networks and traditional media outlets such as magazines, newspapers and billboards (Story 2007).
By way of comparison, in 1996 the company spent 55 per cent of its United States advertising budget (Story 2007). With a savings of over 20 per cent, the switch to online advertising was a win-win situation for Nike: not only did the campaign generate profit, it saved money (Story 2007).
Nike made full use of the Internet as part of its communications and advertising strategy (Story 2007). Nike’s Internet advertising strategy creates a relationship with consumers; the company’s approach is reciprocal, and creates an interactive relationship between consumers, products and the web (Story 2007). On of the examples described in the article is the Nike+, a tiny sensor that runners place in their running shoes that can help them track their training regimen (Story 2007).
At the end of every training session, runners dock their mobile devices into their computers and upload the particulars of their run onto the Nike+ site (Story 2007). In this way, Nike’s Internet advertising strategy provides the conduit for community, all the while boosting sales and creating a long term relationship with consumers via the web. Runners who use Nike+ can make “friends with other runners around the world who post running routes, meet up in the real world and encourage one another on the site” (Story 2007).
According to Story (2007), Nike’s “famous swoosh is there all along. For Nike, this is advertising” (Story 2007). The company connects directly with consumers online. “It’s a very different way to connect with consumers, says Trevor Edwards, Nike’s corporate vice president for global brand and category management” (Story 2007). “People are coming [to the site] on average three times a week. So we’re not having to go to them” (Story 2007).
The campaign’s effectiveness surprised even the senior management of Nike. In the summer of 2007 the company recorded over two million visitors to its family of Nike-owned web sites, and in terms of sales, the campaign encouraged tremendous growth.
According to Story (2007), the company’s global sales grew “to more than $16 billion from $10 billion. And executives say the new type of marketing is a part of that trend” (Story 2007). At the time of the article’s writing, the company planned to deploy the Nike+ idea in some of its other product categories, including “basketball, tennis and soccer” (Story 2007).
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Sales support for the campaign was a combination of the virtual interaction with consumers who used the Nike+, and on the ground in person sales associates who manned Nike’s athletically-inspired sales events, such as the 2006 “three-on-three soccer matches for youths in 37 countries and its San Francisco marathon for women” (Story 2007).
The article also highlighted some of Nike’s other in person and in store services that fell under the auspices of the advertising campaign (Story 2007). An example was the company’s sponsorship of a “Nike Running Club” that it operated from its flagship New York store (Story 2007). The Nike Running Club helps New York City runners map out their running routes, gather training advice for their runs, and sit in on speaker series and running workshops (Story 2007).
The engine behind this shift in advertising focus remains the power of the web to attract and hold consumer attention, which represents “a fundamental change in Nike’s view of the role of advertising,” as well as a fundamental shift in consumer behavior (Story 2007) . The article highlights other campaigns that do use celebrity endorsements, however these ads “are shown only on the Internet” (Story 2007).
An example offered by the article is the campaign featuring British soccer star Wayne Rooney in a series of videos, all of which premiered online, as well as the 2005 “2-minute, 46-second clip of the Brazilian soccer player Ronaldinho” which also premiered online (Story 2007). This video generated more than “17 million views on YouTube and became so well known that some television networks like Sky Sports and the BBC showed it in their news coverage — free” (Story 2007).
According to the Nike executives interviewed for the article, the company’s “future advertising spending will take the form of services for consumers, like workout advice, online communities and local sports competitions,” with the goal of the advertising campaign to build brand loyalty first and foremost online (Story 2007).
According to Stefan Olander, Nike’s global director for brand connections, Nike wants “to find a way to enhance the experience and services, rather than looking for a way to interrupt people from getting to where they want to go” (Story 2007). The campaign sells Nike expertise as well as its products, and creates a service so “that the consumer goes, ‘Wow, you really made this easier for me” (Story 2007).
Story, L. (2007, October 14) The new advertising outlet: Your life. The New York Times. Retrieved from www.nytimes.com