Nike is building a global event marketing division to create and acquire properties, giving the footwear marketer total control over every aspect of how its brand is packaged and presented.
Nike Sports & Entertainment, with seven employees drafted from other Nike departments, is negotiating to acquire and create properties in several countries, and hopes to have several to announce within the next four months.
Division head Ian Campbell is now recruiting executives from traditional sports and event marketing agencies, targeting talent with TV and international marketing expertise.
Possessing control of how its brand is presented and perceived is at the heart of the new unit. Nike will own the events outright, and will boast its own TV production unit and distribution rights to the programming.
Nike will sell sponsorships to its events to other marketers, although the properties will first and foremost serve Nike's interests.
`WE'RE DOING IT OURSELVES'
"Instead of taking the usual step of hiring an agency to create events, or buying into an event someone else has created, we want to do it ourselves," said Mr. Campbell, a Nike veteran who returned this summer after four years at NBA Properties International Group.
Nike is exploring possibilities in extreme sports, soccer and track and field.
Events are being created with key Nike athletes in mind.
A template for what Nike has in mind was established with "Hoop Heroes," an event in Tokyo earlier this month.
Held on two consecutive nights, each event was a slickly produced, 2-hour show headlined by Charles Barkley, Michael Jordan and other Nike basketball endorsers.
High on entertainment values like music and lighting, and heavy on athlete-spectator interaction, the show even had some NBA stars challenging a group of Japan's best sumo wrestlers to a game of basketball.
Tokyo Broadcasting System televised the events; Nike is now shopping for an international distributor.
Nike also set up a retail space for its athletic footwear and apparel, and reported brisk sales and hefty profits.
"We will look at new opportunities as they arise, from the sublime to the ridiculous, but we're not going to produce second-rate events and, in terms of our competitive events, nothing less than world-class contests," Mr. Campbell said.
It's unclear what Nike has budgeted for the division, or if the monies will come out of its $640 million global marketing budget.
Through these events, Nike is seeking to create experiences that will tangibly communicate the brand's values and U.S. mystique to overseas consumers who are embracing its "swoosh" symbol.
According to Sporting Goods Intelligence, Nike in 1995 was No. 1 in the world in footwear at wholesale, with a 28% share of the market, significantly more than No. 2 Reebok International (18%) and Adidas (10.66%).
But the conventional wisdom is that when other products are factored in, particularly apparel, the race is a lot closer.
Some in the industry see the new Nike division as a complement to Nike Sports Management, its athlete representation division.
Before opting to open the management division, Nike was said to have been considering the acquisition of a prominent agency specializing in athlete representation and event marketing.
SIMILAR TO SPORTS MANAGEMENT
"The new division is definitely analogous to Nike Sports Management," said Mark Dowley, managing director of Momentum IMC, the event marketing arm of McCann-Erickson Worldwide, New York.
He added that Nike Sports & Entertainment is a radical example of an emerging trend among marketers, that of owning and controlling their own events. That reminds Mr. Dowley of something else: "Sponsor-created programming. It's back to the '50s."
Copyright September 1996, Crain Communications Inc.
Conversion marketing isn’t just a trend or tactic. It’s a fundamentally new way to approach marketing -- yet it’s based on the most timeless of principles: that the key to success in business is to drive sales today, while building stronger brands for tomorrow. Brought to you by Catapult.Learn more