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Beyond basketball and the track, Nike’s shoes can be found across events, wherever sneakers are worn. (Photo: Bloomberg)
By Kim Bhasin
Nike Inc. is spending more than ever on marketing around the Olympics in a global advertising blitz as it tries to reinvigorate sales and spark a comeback for the world’s largest sportswear company.
Executives have called on their top stars for help at the 2024 Summer Games in Paris, which held its opening ceremony last week. Nike co-founder Phil Knight made a rare plea to the “Nike Family” of athletes and coaches a week ahead of the games, encouraging them to “reignite the passion, desire, and the want to win.”
It’s all hands on deck after Nike’s shares had their worst day on record in June, when management told investors revenue is expected to decline this fiscal year. The stock plummeted as much as 20 per cent, wiping out around $28 billion in market value.
Chief Executive Officer John Donahoe is reallocating resources amid the turmoil. Nike is in the midst of a $2 billion cost-cutting plan, including layoffs that affected 2 per cent of its workforce, and management is rerouting some of those savings into marketing. Nike typically spends around $4 billion per year on “demand creation” — television commercials, athlete endorsements, digital ads, brand events and more.
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Heidi O’Neill, Nike’s president of consumer, product and brand, told Reuters in April that the brand’s Olympic marketing would be the company’s “largest media spend.”
“This will be the most investment and the biggest moment for Nike in years,” she told the news service, without specifying a figure for the planned spending.
Management is rushing to release new items like its Pegasus Premium running shoe as demand wanes for older merchandise, but most won’t be available until next year. Analysts say Nike’s ad splurge doesn’t guarantee a comeback — not without fresh products to back it up.
“They already spend billions on marketing,” said Brian Yarbrough, an analyst at Edward Jones. “I really don’t know that all the money they’re spending at the Olympics means things automatically turn better.”
Hype machine
The world’s biggest brands see the Olympics as an opportunity to get in front of a global audience through varied sporting events that allow athletic labels like Nike, Adidas AG and Puma SE to showcase all sorts of products and directly compete against each other to see who’s best in events like track, cycling and volleyball. It also provides a chance for specialised brands to gain international exposure, like Speedo’s swimsuits and GK Elite’s leotards.
So Nike has poured money into Paris to drum up interest, making its presence known in the French capital for months – and not just through the Swoosh billboards that have popped up around the city.
In April, Nike kicked off its Olympic hype machine by calling on marathoner Eliud Kipchoge, sprinter Sha’Carri Richardson and dozens of other athletes to promote new Nike shoes and the brand presence in Paris. It was punctuated by a towering neon orange statue of LeBron James in front of the Palais Brongniart, the former home of the Paris stock exchange.
“Nike’s a winning brand,” Serena Williams, who was also brought to the host city for a whirlwind week of photo shoots and dinners by Nike, said in an interview. “And they partner with winners.”
At the Centre Pompidou, a Paris landmark that’s home to a modern art museum, Nike’s putting on an art exhibit on the history of its Air Max sneakers. Staff also set up a house for Team USA athletes away from the bustle of the Olympic village, with physical therapy services, hair stylists, makeup artists and nail techs.
Top sponsorships
Nike has the largest number of athlete sponsorships among its peers, according to Citi Research, and a substantial roster of athletes aiming for podiums in Paris. None are more prominent than James, who carried the US flag down the Seine at the opening ceremony.
The 39-year-old Los Angeles Lakers star has presented Nike with a rare opportunity to capitalise on his presence at the Olympics — he hasn’t competed in one since London in 2012. His sneakers are among Nike’s most important product lines, and he appeared alongside Nike’s top names as part of a splashy campaign for the games — a list that includes Giannis Antetokounmpo, Victor Wembanyama, Kylian Mbappe, Sabrina Ionescu, Sophia Smith and the late Kobe Bryant.
Beyond basketball and the track, Nike’s shoes can be found across events, wherever sneakers are worn. Japanese skateboarder Yuto Horigome won a gold medal on Monday with a smooth run in his own Nike shoe collaboration.
Yet many of Nike’s latest innovations won’t hit stores till 2025. Only a few made it out in time for the games, like the Nike Air Sesh, a specialised breakdancing shoe that will appear on the feet of b-boys and b-girls in the new Olympic event at the Place de la Concorde.
“You’ve got to have product that is in demand by the consumer,” said Yarbrough, the analyst. “Right now, they’re lacking that.”
First Published: Aug 02 2024 | 10:07 AM IST
