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"We believe that everyone who has a body is an athlete. It is our job to provide inspiration and aspiration for everyone interested in sports in the world. And, to make products to help people perform better."

So says Phil Knight, the journalist-shy CEO and co-founder of Nike, articulating the company's business philosophy in a rare interview, for Creativity. The first person to win the Cannes International Advertising Festival's Advertiser of the Year for the second time, Knight agreed to try to explain - along with Dan Wieden, co-founder of Nike's long-term ad agency, Wieden & Kennedy - just what lies behind the most highly-feted advertising of the modern era. Do Nike and Wieden really "just do it"? What is the secret to their relationship's longevity? And how much does the Nike attitude toward advertising mirror that to its product? How reflective is what we see of Nike itself?

Knight manages to simultaneously deny there is a philosophy and articulate it as succinctly as he explained the company's mission. "My No. 1 advertising principle - if I have one - is to wake up the consumer," he says. "But there's no formula. It can't just be about getting noticed. And it doesn't matter, without things like distribution in place."

Knight describes advertising as part of a "three-legged stool" that is key to Nike's success; the others being product innovation and sports star endorsement (about which more later). He acknowledges "Nike today is in some ways more known for its advertising than anything else." However, when Nike first appointed Wieden 21 years ago, its budget was a paltry $1 million. Knight had to be convinced of the value even of that. It was a big risk for Wieden, David Kennedy and their colleagues, who left another Portland agency named William Kane to start up with the account. A snapshot of Nike's early history helps explain why. The company really was founded by jocks for jocks. Knight was a runner, trained at the University of Oregon by Bill Bowerman, later the U.S. Olympic team's coach. Unhappy with the spikes his runners wore, Bowerman designed and made his own shoe templates with some success. After Knight completed his MBA (on sneaker manufacturing) at Stanford, he became an accountant and went to Japan to sign a deal importing Tiger sneakers to America (they were lighter than the ubiquitous adidas shoes of the time). He and Bowerman formed a company on the spot named Blue Ribbon Sports, investing $500 each.

This was December, 1963, the year Bowerman went to New Zealand and discovered a new physical exercise, jogging, which he popularized in a 1967 book Jogging: A Physical Fitness Program for All Ages, which sold over a million copies. In 1971, the two launched their own company, using a logo designed by a Portland State University student, Carolyn Davidson (years later, she got a lot of Nike shares as a reward), and named by their first salesman, Jeff Johnson, after the winged Greek Goddess of victory. Knight wasn't thrilled by either.

Crucial early landmarks included Bowerman's invention of the waffle sole on a waffle iron in his garage, and his appointment to the U.S. Olympic team (both 1972) where he waxed lyrical about the new Nike sneakers to his athletes. Advertising back then consisted of Johnson handing out Nike T-shirts to winning athletes at the finish line. The company deliberately set out to use less clean-cut sports stars than their rivals. "Because we were young and had attitude," says Knight today. They signed up Steve Prefontaine and Alberto Salazar, and their first tennis star was Romanian bad boy Ilie Nastase. Tennis and the waffle soul exploded when a young Jimmy Connors won Wimbledon in 1974 wearing Nikes.

There was phenomenal growth through the '70s into the early '80s built on these athletes, as well as Henry Rono, Joan Benoit and later John McEnroe and Carl Lewis. But Nike did not adapt to its growth well, and made several mistakes, including a disastrous move into casual shoes. Profits plunged in the mid-'80s and in 1986 Nike was overtaken by Reebok. "It was a terrible thing," Knight says. " Believe me, with our rivals it has never been easy." Knight bet the company on a new technology named Visible Air, a patented design. He had also taken a gamble in 1985 on a rookie Chicago Bulls player, rejected by the local Portland team in the draft. Michael Jordan wore Air Jordans despite the NBA banning them because they were too colorful. And, of course, the rest reallyis history.

Nike's early breakthrough television commercial, "Revolution," used a Beatles track and promoted Visible Air. The "Just do it" line came the year after. It was Wieden's own suggestion in a meeting while discussing Nike's culture. "We have a high-risk strategy on advertising," says Knight. "Dan picked up on our attitude when we were young. It's our culture, and we need to reflect who we are. We liked 'Just do it' immediately, but we thought it was a one-season line. The idea that we'd be using it 15 years later never occurred to us."

The way Wieden explains "Revolution," his personal favorite ahead of "Freestyle" and "Tag" (Knight's faves are the Bo Jackson series and the Spike Lee/Jordan ads), speaks volumes about how both the relationship and the agency itself work. " 'Revolution' was such a key moment. Not only for of creative reasons - a Beatles song! - but also because it was an idea Kennedy and I were unwilling to accept. Also, at the time Nike had fallen behind Reebok and no one had ever really come back from that. They threw everything behind Visible Air. We hired a director who had never shot an ad - David Fincher - and he shot it pretty much with a Brownie camera. For once, they actually did see research [Wieden and Nike do not test to this day] that suggested the ad was bombing. It really speaks to our relationship that we persevered. The risk was huge. Kennedy and I just didn't get it at first."

This comes up continually: either Wieden or Kennedy or Knight or his long-term marketing supremos Mike Parker and Trevor Edwards "did not get it at first," but because of the trust in the partnership, a decision is made to go with the proposer's gut instinct. Take last year's beautiful Jake Scott-directed "Move" spot, which Wieden says he was not particularly keen on at first. "Dan just didn't see the idea," says Hal Curtis, Wieden co-creative director for the Americas on Nike, with Mike Burns, since 1998. "But one of the secrets to the agency is our awesome broadcast production department. That spot was planned frame by frame. It was cut before it was shot. Adam Pertofsky did it, but Jake Scott did a terrific job. And then there was the music. With Nike, and such a strong, established strategy, the execution can be the idea."

The agency has around 20 creatives and 20-plus suits on Nike. Curtis singles out the longtime head of Nike production, Ben Grylewicz, as "the unsung hero." Nike also has Nike Film and Video, which does the Nike Town and other retail work from W+K templates, but the agency has a free hand on production. It is difficult to generalize about the 75 to 100 spots (including lifts) that Wieden produces a year; the lead time is a little quicker because of the slimmed-down decisionmaking process. There are no Budweiser-style set budgets per spot, although Curtis admits to wishing there was an annual pool of money established upfront. And, although Nike Europe has spent up to $2.5 million on individual spots, like last year's Terry Gilliam-directed World Cup epic, the most Nike U.S. ever ran to is perhaps $1.3 million tops, for the "Morning After" spot, in which a runner gets his exercise oblivious of a war in progress, or the imminent David Fincher cinema spot. " They are an amazingly difficult and demanding client," says Curtis. "Very little we do gets a 'Great job.' It's always, 'Could have been better.' But look at their ambition. With the Fincher ad, they want to popularize cinema advertising in the U.S." In the final analysis, "I believe I have the best job in the advertising world," Curtis adds.

Media initiatives are clearly part of Nike's future plans. "There is a revolution in advertising going on right now, a move away from television spots," Knight says. "We will probe and explore different media areas, but we don't have a plan or philosophy." Nevertheless, there is Wieden + Kennedy Entertainment under the former head of broadcast production Bill Davenport. It was here that the longer-form Lance Armstrong "Road to Paris" film was made; and a Marion Jones film is in preparation for the 2004 Olympics. Nike itself flirted with content creation in the late '90s. Peter Friedman, head of broadcast at McCann-Erickson, spent over two years at Nike working on a Nike Channel and other longer-form initiatives that were eventually canned. He was also in charge of maintaining Nike broadcast standards globally. Two out of 10 Wieden Nike spots never air because they are not deemed good enough. "This may sound a little hokey," Friedman says today, "but the secret of the brand is reality. Everything they do is honest about sport. The marketing people know no more about production or ads than anywhere else, but they know their brand. It's a religion out there. It's not about fashion. And they trust Hal and Dan and their agency."

As Cannes week unfolds, that agency right now is working on just what to do with fledgling LeBron James, the latest Nike superstar in the Jordan/Agassi/Woods pantheon. The agency was involved in the pitch to James' advisors. "It's hard to say we have the best products if we only have second-string endorsers wearing our products," says Knight, who, like Wieden and Curtis, insists Nike pays little attention to either fashion or competitors. Although he does add, "Remember, the others offered more money for LeBron."

Wieden himself takes a final stab at articulating the shared philosophy: "Our advertising is sort of an anti-positioning. It came about naturally rather than through some overarching strategy. Unless you make some mistakes you're not doing your job. The other key to our advertising is being able to acknowledge some degree of ignorance about the task ahead when you sit down to crack it. Generally, you just try to save the problem at hand. When you're most successful is when an individual here internalizes the work. The Tiger Woods spots or 'Angry Chicken' looks like they have tried to push the envelope, but actually both commercials emerge from deep inside the envelope of one person's mind. Nike wants to be surprised and amazed by us." And this, combined with an absolutely unwavering adherence to the core principles, built in sport, of the Nike brand, and a sadly all too rare reliance on gut instinct, appear to be the real secrets of the combined success.

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