Drew Litton peered into the future last August and saw one big swoosh.
It wasn't surprising, since everywhere he looked at the time he saw little swooshes. On Ben Johnson's gold track shoes. On John Elway's Denver Broncos jersey. On Koy Detmer's University of Colorado Buffaloes uniform. On the brim of Tiger Woods' hat. In an unending stream of ads. On shirts, shorts and sneakers.
Mr. Litton, sports editorial cartoonist for the Rocky Mountain News, wondered where it was all going. And his wry cartoon about the ubiquity and influence of the swoosh caught the eye of Phil Knight, chairman-CEO of Nike.
The cartoon shows a husband and wife reading the morning paper. "Honey?" he asks, wanting the sports pages, "can you pass the Nike section?"
"I thought it was the ultimate compliment," said Mr. Knight. "I cut it out and had it framed."
In the latest compliment, Nike has been named Advertising Age's 1996 Marketer of the Year.
Since the late '80s, Nike has worked to transform itself from a brand of sneakers to a marque integral to the sports culture it targets. From pro sports arenas to inner-city basketball courts refurbished through Nike's P.L.A.Y. program, from Foot Lockers in shopping malls to the latest Niketown in New York City, the ubiquitous swoosh this year was more recognized and coveted by consumers than any other sports brand--and arguably any brand.
The marketer's 1996 advertising from Wieden & Kennedy, Portland, Ore., depicted the unifying spirit of sports and the vast scope of Nike's business.
The Nike name ranks among the world's top 10 brands, according to Young & Rubicam, New York, along with Coke and McDonald's, Mr. Knight's favorite advertisers. He and Nike this year could have declared victory in the athletic foot-wear wars; Nike is so dominant that athletic-shoe retailers and marketers fear what would happen should the company falter.
$12 BILLION TARGETED
The athletic footwear market, estimated at $7.4 billion at the U.S. wholesale level, prays for a Pepsi to Nike's Coke, but one probably won't arrive soon. Nike's revenues for fiscal '96, $6.47 billion, were up 36% from '95. According to Sporting Goods Intelligence, Nike owns 37% of the U.S. athletic footwear market, far ahead of Reebok International's 21% and three times as big as No. 3 Fila USA and No. 4 Adidas America combined. Nike expects to surpass $8 billion in revenues for '97 and has targeted $12 billion by 2000.
But Mr. Knight won't declare victory. He is, at heart, a fiercely competitive athlete who can't quit.
"We are competing against ourselves, but don't misunderstand me: we must never forget Reebok, Adidas and Fila," said Mr. Knight.
Nike's marketing formula: integrate the swoosh into the cultural fabric of sports and harness its emotional power. The formula has proven successful, as Nike's growth has coincided with the growth in sports.
"The marketing of sports over the past two years has become so much more dynamic," said Liz Dolan, Nike's VP-global marketing communications. "Participation in sports and consumption of sports entertainment is booming."
Nike's strength across diverse sports segments was clearly illustrated in its advertising this year. The "If you let me play" campaign underscored Nike's push into women's sports; "Nike Vs. Evil" from Wieden's Amsterdam office, in which Nike's soccer endorsers do battle with Satan, reflects Nike's belief that it must dominate soccer to have global credibility; "Disgruntled Goalies" this week launches the brand into hockey equipment.
"We are past the days of being hurt if a certain category falters," said Mr. Knight. "We have a broader front. We now cut across genders and the wide spectrum of sports."
Ms. Dolan said the temptation is strong to slap the swoosh on anything. But Nike believes it must resist, or risk the setbacks of the mid-'80s, when Nike chose casual shoes over aerobics and was lapped by Reebok.
"We have to start with sports as our brand positioning . . . instead of chasing street fashion," said Ms. Dolan.
Managing the brand on a day-to-day basis are Ms. Dolan; Geoffrey Frost, worldwide advertising director; Joe Pollard, global media director; and Tom Clarke, a former Nike top marketing executive who's now president-chief operating officer.
"I don't get involved much in advertising, not like I was when it was such a life or death thing 10 years ago," said Mr. Knight, who once professed to hate advertising but learned to love it after being torpedoed by Reebok a decade ago.
The challenge of creating the great work Mr. Knight demands falls to Wieden. The agency's output for Nike this year was prodigious. By Fila agency FCB/Leber Katz Partners' count, Wieden produced 60 different pieces of original creative for Nike; FCB/Leber Katz only churned out nine for its footwear client.
"They are so formidable, no matter how well we may execute something, our voice will never be as loud as theirs," said Howe Burch, VP-advertising at Fila.
Ms. Dolan said all Nike ads are brand statements, even print work, which showcases product. She said print ads tout product innovation, which is a brand innovation. And ads are always signed with a swoosh and never the word "Nike."
The world outside the U.S. is now critical to Nike. International sales in fiscal '96, ended May 31, hit $2.33 billion, up 36% from 1995's $1.72 billion. Mr. Knight projects that international sales will be at least even with domestic sales in four years.
`PART OF CULTURAL FABRIC'
Of Nike's worldwide ad strategy, Ms. Dolan said: "We have to approach our brand marketing from a global point of view, but also must devise a country-by-country plan to make the brand part of the cultural fabric."
This year, Wieden reorganized its Nike account structure to serve that approach. Wieden created a global account team, led by Global Account Director Jim Ward, that mirrors Nike's global marketing management team of Ms. Dolan and Messrs. Clarke, Frost and Pollard.
For Nike, the contrast between its strength in the U.S. and how much further it has to go abroad was hammered home during the 1996 Summer Olympics.
Ms. Dolan said Nike's effort--the $35 million "Search and destroy" ad campaign; a high-profile sponsorship of the U.S. Track and Field team; and a popular sports theme-park open during the Games--created high impact in America.
"But because our visibility was strongest in the U.S. through U.S. athletes, people in Japan or Germany didn't see loads and loads of Nike," said Ms. Dolan.
To address Nike's need for local relevance, the company launched a global event-marketing division this year that will showcase its athletes.
Nike's strategic shift toward partnering with sports leagues, including major leagues in the U.S., reflects a change mandated by Nike's need to increase its apparel business. Nike's U.S. athletic apparel business reached $842 million, almost double its $423 million in '95, on the strength of its swoosh and league licenses.
Some snipe that Nike is exploiting leagues to build its branded business through swoosh products that copy licensed looks.
"There are going to be some relatively strong differences of opinion, but the cauldron that boils in [this] relationship will make for a stronger presentation," said David Stern, commissioner of the National Basketball Association, which is finalizing a deal with Nike.
But some wonder if Nike's new league alliances will be a detriment to a brand with an anti-establishment attitude and a historical allegiance to athletes.
"Being big in and of itself isn't bad, and doesn't run counter to what Nike is and stands for," answered Mr. Knight. "If the average consumer sees us as the establishment in five years, then I would say we've failed. We have to maintain our entrepreneurial spirit, or we won't stand for anything."
Copyright December 1996, Crain Communications Inc.