Nike—ad spending, facts and profile

Overview Nike is an athletic shoe and apparel marketer. It is truly a marketer, not a shoemaker; Nike outsources manufacturing for virtually all products to other companies. Nike’s headquarters is in Beaverton, Oregon. Business segments and operations The company’s brands include Nike, Jordan and Converse. See more: Nike’s business and brands Largest customers: Nike said its three largest U.S. customers accounted for the following percentages of U.S. sales in the fiscal years ended May 31: 2024: 21% 2023: 22% 2022: 22% 2021: 24% 2020: 24% 2019: 24% 2018: 21% 2017: 23% 2016: 25% 2015: 26% 2014: 26% 2013: 25% 2012: 24% 2011: 23% Nike said its three largest customers outside of the U.S. accounted for the following percentages of non-U.S. sales in the fiscal years ended May 31: 2024: 15% 2023: 14% 2022: 14% 2021: 15% 2020: 15% 2019: 14% 2018: 13% 2017: 12% 2016: 13% 2015: 12% 2014: 6% 2013: 6% 2012: 11% 2011: 9% Nike said no customer accounted for 10% or more of worldwide net revenue in the fiscal years ended May 2011 through May 2024. In its 10-K for the year ended May 2010, Nike said Foot Locker, its largest customer, accounted for 8% of worldwide revenue in the year ended May 2010; vs. 9% in the years ended May 2009 and May 2008. Foot Locker said it purchased about 65% of its merchandise from Nike in the years ended February 2024 and January 2023; 68% in year ended January 2022; 75% in year ended January 2021; 71% in year ended February 2020; 66% in year ended February 2019; 67% in year ended February 2018; 68% in year ended January 2017; 72% in year ended January 2016; 73% in year ended January 2015; 68% in year ended January 2014; 65% in year ended February 2013; 61% in year ended January 2012; 63% in year ended January 2011; and 68% in year ended January 2010. Marketing spending U.S. ad spending: Total U.S. advertising spending shown in the Ad Age Leading National Advertisers report is Ad Age Datacenter’s U.S. ad spending estimate for Nike excluding estimated cooperative ad spending; Ad Age includes co-op ad money in retailers’ ad-spending estimates. Worldwide ad spending: Total worldwide advertising spending shown in the Ad Age World’s Largest Advertisers report is Nike’s stated worldwide “demand creation expense” (also known as “advertising and promotion costs”). Nike reported demand creation expense of $4.285 billion (8.3% of revenue) in the year ended May 2024 (fiscal 2024), up 5.5% from $4.060 billion (7.9% of revenue) in the year ended May 2023. Demand creation spending in the year ended May 2024 reached an all-time high. In its 10-K for the year ended May 2024 (fiscal 2024), Nike said this about demand creation expense: “Demand creation expense increased 6% for fiscal 2024, primarily due to higher advertising and marketing expense, digital marketing and sports marketing expense. Changes in foreign currency exchange rates did not have a material impact on demand creation expense.” The 10-K for the year ended May 2024 also said: “Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, complimentary products, television, digital and print advertising as well as media costs, brand events and retail brand presentation. “Advertising production costs are expensed the first time an advertisement is run. Advertising media costs are expensed when the advertisement appears. Costs related to brand events are expensed when the event occurs. Costs related to retail brand presentation are expensed when the presentation is complete and delivered. “A significant amount of the company’s promotional expenses result from payments under endorsement contracts. In general, endorsement payments are expensed on a straight-line basis over the term of the contract. However, certain contracts contain elements that may be accounted for differently based upon the facts and circumstances of each individual contract. Prepayments made under contracts are included in Prepaid expenses and other current assets or deferred income taxes and other assets depending on the period to which the prepayment applies. “Certain contracts provide for contingent payments to endorsers based upon specific achievements in their sport (e.g., winning a championship). The company records demand creation expense for these amounts when the endorser achieves the specific goal. “Certain contracts provide for variable payments based upon endorsers maintaining a level of performance in their sport over an extended period of time (e.g., maintaining a specified ranking in a sport for a year). When the company determines payments are probable, the amounts are reported in demand creation expense ratably over the contract period based on the company’s best estimate of the endorser’s performance. In these instances, to the extent actual payments to the endorser differ from the company’s estimate due to changes in the endorser’s performance, adjustments to demand creation expense may be recorded in a future period. “Certain contracts provide for royalty payments to endorsers based upon a predetermined percent of sales of particular products, which the company records in cost of sales as the related sales occur. For contracts containing minimum guaranteed royalty payments, the company records the amount of any guaranteed payment in excess of that earned through sales of product within demand creation expense. “Through cooperative advertising programs, the company reimburses its wholesale customers for certain costs of advertising the company’s products. To the extent the company receives a distinct good or service in exchange for consideration paid to the customer that does not exceed the fair value of that good or service, the amounts reimbursed are recorded in demand creation expense.” Historic demand creation expense: In its 10-K for the year ended May 2023 (fiscal 2023), Nike said this about demand creation expense: “Demand creation expense increased 5% for fiscal 2023, primarily due to higher advertising and marketing expense and higher sports marketing expense. Changes in foreign currency exchange rates decreased demand creation expense by approximately 4 percentage points.” In its 10-K for the year ended May 2022 (fiscal 2022), Nike said this about demand creation expense: “Demand creation expense increased 24% for fiscal 2022, primarily due to higher advertising and marketing spend against brand campaigns as we experienced marketplace closures in the prior year due to COVID-19, as well as continued investments in digital marketing to support heightened digital demand. Changes in foreign currency exchange rates decreased demand creation expense by approximately 1 percentage point.” In its 10-K for the year ended May 2021 (fiscal 2021), Nike said this about demand creation expense: “Demand creation expense decreased 13% for fiscal 2021, due to lower marketing and advertising expenses for our brand events and retail operations, as well as lower sports marketing expense as sporting events were postponed due to COVID-19. This activity was partially offset by higher digital marketing investments. Changes in foreign currency exchange rates increased demand creation expense by approximately 2 percentage points for fiscal 2021.” In its 10-K for the year ended May 2020 (fiscal 2020), Nike said this about demand creation expense: “Demand creation expense decreased 4% for fiscal 2020 compared to fiscal 2019, due to lower retail brand presentation costs and lower sports marketing investments, as well as decreased advertising and marketing expenses as sporting events were postponed or canceled and a majority of stores were closed globally during the fourth quarter of fiscal 2020 [quarter ended May 2020]. These decreases were partially offset by higher digital brand marketing costs. Changes in foreign currency exchange rates decreased demand creation expense by approximately 2 percentage points for fiscal 2020.” In its 10-K for the year ended May 2019 (fiscal 2019), Nike said this about demand creation expense: “Demand creation expense increased 5% for fiscal 2019 compared to fiscal 2018, due to sports marketing investments, as well as higher advertising and marketing expenses to support global brand campaigns, key sports moments and new product launches. Changes in foreign currency exchange rates decreased demand creation expense by approximately 2 percentage points for fiscal 2019.” In its 10-K for the year ended May 2018 (fiscal 2018), Nike said this about demand creation expense: “Demand creation expense increased 7% for fiscal 2018 compared to fiscal 2017, driven by higher sports marketing costs. Changes in foreign currency exchange rates increased demand creation expense by approximately 3 percentage points for fiscal 2018.” In its 10-K for the year ended May 2017 (fiscal 2017), Nike said this about demand creation expense: “Demand creation expense increased 2% for fiscal 2017 compared to fiscal 2016, driven by higher sports marketing costs, as well as higher marketing and advertising costs, primarily to support key sporting events including the Rio Olympics and European Football Championship. These increases were partially offset by lower retail brand presentation costs. Changes in foreign currency exchange rates reduced demand creation expense by approximately 1 percentage point.” In its 10-K for the year ended May 2016 (fiscal 2016), Nike said this about demand creation expense: “Demand creation expense increased 2% for fiscal 2016 compared to fiscal 2015, primarily due to investments in digital brand marketing, including for our DTC”—direct-to-consumer—“business, as well as support for key brand events and initiatives, and sports marketing investments, partially offset by lower advertising expense. For fiscal 2016, changes in foreign currency exchange rates decreased growth in Demand creation expense by approximately 6 percentage points.” In its 10-K for the year ended May 2015 (fiscal 2015), Nike said this about demand creation expense: “Demand creation expense increased 6% for fiscal 2015 compared to the prior year, primarily due to support for key brand and consumer events, including the World Cup in early fiscal 2015, increased digital brand marketing, investments in DTC marketing and higher sports marketing expense. Changes in foreign currency exchange rates decreased growth in demand creation expense by approximately 4 percentage points for fiscal 2015.” In its 10-K for the year ended May 2014 (fiscal 2014), Nike said this about demand creation expense: “Demand creation expense increased 10% compared to the prior year, mainly driven by marketing support for events, including the World Cup, higher sports marketing expense, key product launches and initiatives, and investments to upgrade the presentation of our products in wholesale accounts.” In its 10-K for the year ended May 2013 (fiscal 2013), Nike said this about demand creation expense: “Demand creation expense increased 5% compared to the prior year, mainly driven by an increase in sports marketing expense, marketing support for key product initiatives, including the Nike Fuelband and NFL launch, as well as an increased level of marketing spending around global sporting events such as the European Football Championships and London Summer Olympics. Excluding the effects of changes in foreign currency exchange rates, demand creation expense increased 8%.” In its 10-K for the year ended May 2012 (fiscal 2012), Nike said this about demand creation expense: “Demand creation expense increased 11% compared to the prior year, mainly driven by an increase in sports marketing expense, marketing support for key product initiatives, including the Nike Fuelband and NFL launch, as well as an increased level of brand event spending in advance of the European Football Championships and London Summer Olympics. For fiscal 2012, changes in currency exchange rates increased the growth of demand creation expense by 1 percentage point.” Nike said this in its 10-K for the year ended May 2011 (fiscal 2011): “Demand creation expense increased 4% [in year ended May 2011] compared to the prior year, primarily driven by a higher level of brand event spending around the World Cup and World Basketball Festival in the first half of fiscal 2011, as well as increased spending around key product initiatives and investments in retail product presentation with wholesale customers.” Nike said this in its 10-K for the year ended May 2010 (fiscal 2010): “Demand creation expense remained flat compared to the prior year, as increases in sports marketing and digital marketing expenses were offset by reductions in advertising. In fiscal 2011 [year ending May 2011], we will continue to focus our resources on those investments that drive sustainable and profitable growth. We expect demand creation will increase at a slightly slower rate than revenues, with spending weighted toward the first quarter driven by key events including the 2010 World Cup.” Links to Ad Age’s advertiser rankings Latest rankings: U.S. The Ad Age Leading National Advertisers 2024 ranking was released Oct. 28, 2024. Ad Age Leading National Advertisers 2024 U.S. ad spending, rankings, analysis and profiles for the biggest marketers Click here Past rankings: U.S. Ad Age Leading National Advertisers 2023 Ad Age Leading National Advertisers 2022 Latest rankings: worldwide The Ad Age World’s Largest Advertisers 2024 ranking was released Dec. 9, 2024. Ad Age World’s Largest Advertisers 2024 Global ad spending, rankings, analysis and profiles for the biggest marketers Click here Past rankings: worldwide Ad Age World’s Largest Advertisers 2023 Ad Age World’s Largest Advertisers 2022 Financial results See more: Nike financial results Read Nike’s annual filing Deals and strategic moves Nike in August 2019 bought Celect, a retail predictive analytics and demand sensing firm based in Boston. Nike in December 2019 sold Hurley to Bluestar Alliance, a company that owns an assortment of consumer brands. Bluestar specializes in licensing, branding and marketing consumer brands. Hurley is a brand of action sports apparel for surfing, skateboarding and snowboarding. Nike bought Hurley International in April 2002. Nike in February 2013 sold Cole Haan (dress and casual shoes and accessories) to buyout firm Apax Partners for $561 million. (Nike purchased Cole Haan in 1988.) Cole Haan in February 2020 filed for an initial public offering. Cole Haan in January 2021 scrapped its plan for an IPO. Nike in November 2012 sold Umbro (soccer shoes and apparel) to Iconix Brand Group for $225 million. Iconix earlier bought Nike’s Starter brand. (Nike acquired Umbro, a U.K.-based global soccer brand, in March 2008 for $576.4 million.) Nike in May 2012 had announced its intent to sell Cole Haan and Umbro so the company could focus on its Nike, Jordan, Converse and Hurley brands. Nike in December 2007 sold Starter, the main business of Nike’s Exeter Brands Group, to Iconix for $60 million cash. (Nike purchased Starter, a value sports apparel brand, in August 2004 for $47.2 million.) In April 2008, Nike sold Bauer Hockey (Nike Bauer Hockey), a hockey business, to Kohlberg & Co. and Canadian businessman W. Graeme Roustan for $189.2 million. (Nike bought Bauer’s marketer, Canstar Sports, in February 1995 for $409 million.) Nike bought Converse in September 2003 for about $310 million. Management and employees Elliott Hill became Nike’s president and CEO effective Oct. 14, 2024. Hill, who was age 60 when Nike announced his appointment, previously worked at Nike for more than 32 years before retiring in 2020. Nike Co-Founder Phil Knight in 2016 retired as chairman. Knight now is chairman emeritus. See more: Nike management See more: Nike careers Stock Nike trades on the New York Stock Exchange. Ticker: NKE History Bill Bowerman and Phil Knight co-founded Blue Ribbon Sports, the precursor to Nike, in 1964. Nike was incorporated in 1967. See more: Nike history and an interview with Knight. Ad Age Leading National Advertisers 2024 U.S. ad spending, rankings, analysis and profiles for the biggest marketers Click here

Nike—ad spending, facts and profile

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