Nike: Not just another sports brand.

7th May 2019

written by George Hughes

A brand that is dominating the world of  content marketing right now is the notorious Nike Inc; the world’s largest athletic footwear and clothing brand. Over 55 years, Nike is risen to become a shining example of a brand that has it all; market share, $34 billion yearly revenue, contracts with world renowned sportsmen, factories in over 40 countries and selling worldwide in over 170. Nike is doing phenomenally well and shows no sign of slowing down.  Competition is fierce in this space, with brands like Adidas, Puma and New Balance all taking their slice of the market however, something about Nike and its strategy has placed them at the top of the playing field and has kept them from being overtaken or outshined. So what is it that makes Nike different?

 

Founded in Oregon in 1964 by young entrepreneur Phil Knight, Nike started off as a reseller of Japanese running shoes selling to well known sports brands across the US. Knight wrote a paper before the inception of Nike called “Can Japanese Sports Shoes Do to German Sports Shoes What Japanese Cameras Did to German Cameras?” After that Knight went on to create the company Blue Ribbon Sports, which we now know today as Nike Inc. Hard work, luck and determination were not the only forces that turned Nike into a world leading manufacturer of sportswear but also a superb and unique marketing strategy, one that encouraged people to think differently about athletic footwear and oozed the “Just Do It” mentality.

 

Nike has been a brand that always challenges the boundaries of sport, sportswear and athletic principles. So much so that today Nike is worn and bought by billions of people around the world who aren’t even interested in sports. They decided early on that their products would be constantly redesigned and reimagined with their customers in mind, pushing the traditional running shoes as far as they could using crazy inventions like waffle machines to design the soles. Very soon Nike became less about the shoes and more about fitness. They didn’t want to sell you a shoe but instead a mantra of being fit, active and staying healthy. Their shoes were sold as a way to stay in shape but the fact that they were comfy to run in and more stylish to look at was a bonus. Nike very quickly became the fitness brand selling a way of life, an image, a feeling and a lifestyle – their customers and audience then became the most important thing to the business.

 

So, in the 21st century what is it that Nike offers us that makes them so irresistible? To reach their new, digitally savvy audience, Nike put a lot of attention into their content creation, focusing on their social media channels and video production. Through their brilliant use of advertising Nike offers all generations, gender and races across the world this feeling of empowerment and energy. Their marketing strategy is to empower people through uplifting videos, advertisements that ooze culture, social freedom and restraints, fashion trends, lifestyle trends, opinions, messages and love. They test the limits of our personality by being so in tune with the world and providing their customers with a release, a safe place and the feeling that they are not alone. They now produce regular video content that speaks effortlessly to their customers through strong, moving and engaging storytelling. 

“Walk With Love” – Represent Love

 

Nike BETRUE – Nobody Wins Alone

 

“MILES” Joan Benoit Samuelson

 

For a long time now Nike has slowly started to reduce the production of TV adverts and instead focus on video content for their YouTube channel. Understanding that marketing in the digital age is changing, Nike decided that the quickest and most effective way to reach their audiences and customers with detailed, meaningful and relevant content was through online video. They dropped their TV and print advertising spend by 40% between 2010 and 2012 – but increased their overall marketing budget to $2.4 billion in 2012 (Fortune). This marketing strategy in itself shows that Nike as a brand that follows the people, listens to trends and adapts instantly to the changes in culture. TV advertising spend dropped substantially in the last few years because traditional TV viewing has also massively declined. Instead, video streaming and viewing has become a lot more selective, personal and intimate, and because of online streaming it has become hugely accessible and people prefer to binge watch shows at their leisure. YouTube is the second most used site after google (Alexa) and users view more than 1 billion hours of videos each day (YouTube).

 

Nike speak to their audiences on their terms. They provide customers with personalisation, the ability to design their own shoes, content to watch that reflects their attitudes, opinions and lifestyles, not to mention the endless creation of new styles, clothes and shoes that constantly hit our high streets and allow its customers to always feel original and stay excited and passionate about Nike. What is their marketing strategy? It’s to give the people what they want with the utmost time, attention to detail and uncompromising quality whether that’s clothes, experiences or content. 

As recently as 5 years ago, the vast majority of us would have tuned into our favourite show via our TV sets… at home… probably on the sofa. Today, the picture is very different. Almost half of adults aged 22 to 45 are not watching content on traditional TV platforms (AdAge) and 64.8 million people born between 1981 and 1996 will watch streaming videos or downloaded videos on a device at least once a month (Forbes). TV as we know is dead. Long live online streaming! Of course, TV isn’t actually dead. But the way we consume it has changed forever. Many people will still flick the TV on to catch their favourite series as it is released whether that’s X Factor or Silent Witness, but for most of us, on-demand has replaced live viewing as our preferred method of consuming any type of television content. And for Millennials and Generation Z who have come of age in a digital world,  BBC and ITV are increasingly shunned in favour of subscription based services like Netflix or Amazon or user generated content sites like Youtube. 

 

The writing has been on the wall for analogue TV for at least 2 decades and when the analogue signal was switched off in 2017 forcing every individual to access television via a digital box, it wasn’t a great surprise to the industry. The emergence of super-fast broadband that removed the need to have a sky dish or cable TV to access more than 5 channels of television was one of the biggest driving factors behind the shift in the television landscape. That… and the arrival of 3G and cheap mobile data which has allowed video streaming in the palm of your hand.

 

It’s surprising to find that Netflix has actually been around since 1997. It started life as a DVD rental business but began streaming online video in 2007, just 2 years after Youtube was founded. Today Netflix has 139 million paid subscribers worldwide and on Youtube, one billion hours of content are watched every single day. YouTube is ranked as the second-most popular site in the world after Google (Alexa Internet). And, whilst Netflix and Youtube may have paved the way for online video, there are now dozens of different streaming platforms from Disney+ to Apple TV, Now TV to Facebook Watch, TikTok, Instagram TV and Amazon Prime.

 

There’s huge money behind these platforms. Facebook will spend a “measly” $1 billion on video content this year compared to Amazon’s $4 billion spend last year and Netflix’s projected $8 billion spend for 2019 (Media Post). Also this year, Amazon and Netflix have said they will be investing in UK TV production, and will help to promote these shows on both platforms (Video News). However, the question is, will this bring traction to TV broadcasters or, will audiences be tuning into their SVOD (Streaming Video On Demand) services to watch the shows? An Ofcom report released in the summer found that huge investment in original content by digital players has seen subscriptions to SVOD services in the UK overtake subscription to pay-TV services. Ofcom also found that last year that after a period of sustained growth, pay-TV subscription revenues fell in the UK for the first time, falling by 2.7 percent to £6.4 billion. Unsurprisingly as UK consumers turn their back on conventional television viewing in favour of subscription based streaming platforms, they also turn their back on advertising. TV advertising income fell significantly last year, declining seven percent year-on-year in real terms to £3.9 billion (Video News).

 

So what does this mean for brands who have, in the past relied on TV advertising to reach their customers? You guessed it, they’ve started to pump more and more of their budget into online advertising. Last year, digital advertising increased by 9.5% in the UK (emarketer) with video being the fastest growing medium. The exciting thing is that marketers looking to get an edge over their competitors are putting budget behind incredible branded content that is shining a spotlight on their products and services. Volvo, Heineken and Dove are not only running heavy hitting multi-channel campaigns with a hero piece of video content at it’s heart, but many like Patagonia, Red Bull and Nike are becoming publishers in their own right with Youtube channels that include regular, engaging video content that is enjoyed by millions of people.

 

As we, the consumer, become accustomed to subscription TV viewing, the days of sitting through 5 minutes of TV adverts seem like a distant memory. No surprise then, that we actively avoid spending time online in places where we are being hit with constant adverts. With Youtube releasing its own subscription service, it begs the question how long we will have to wait before Facebook, Instagram and other platforms follow suit? Moving forward, brands will have to work harder and harder to get their message seen by their audience and commissioning branded content will be one of the best ways to do that.

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