Nike Marketing: Letting the Consumer Decide
Geoffrey Precourt reports from the Association of National Advertisers' annual Masters of Marketing Conference 2008. His other stories from the event include:
Jim Stengel: Marketing Lessons from 25 years at P&G
Coca-Cola: Pushing a Global Program to the Ends of the Earth
For his full coverage, visit WARC Online's conference blog.
At Nike, three words run marketing: "The consumer decides."
"We used to put the brand in the middle, Joaquin Hidalgo, Nike Brand CMO told a session at the 2008 Association of National Advertisers' annual convention in Orlando, FL. "Now the consumer is smack-dab in the middle of everything we do. And that means we need to understand who our customer is."
A quick study of Nike consumers' habits and experiences would suggest that everything has changed-"that because they're digitally enabled and connected," Hidalgo said, "they are growing up in different world. But while the technology has changed, the customers actually aren't that different: They still like to shop, hang out with friends, and play sports.
"They don't call it 'digital.' It's just life for them. And they have more choices than any generation before them. If brands do not continually engage with them, they won't have time for you."
Nike's "obsession" with the consumer, Hidalgo continued, means that the company has spent the last years carefully observing how consumers interact not just with Nike but brands with similar appeal. And, from that study has come a series of lessons:
- Don't Tell Me: Advertisers no longer can broadcast to consumers. "It's not like a bunch of kids are sitting on the corner waiting for Nike to say something. They have too many other things to do. We used to be able to tell them what was cool. Now they tell us."
- Amplify Your Voice: Talk loud enough to be heard. Sites like YouTube and epinions can help marketers engage consumes and build trust.
- Don't Make It for Me/Let Me Create: It's important to have your product on a store shelf, but a Web presence like youbars.com recognizes the importance of individuality. Don't just buy a powerbar, do it yourself: Nuts, berries, sweeteners, grains and seasonings, you pick 'em. Automotive companies continue to go deeper with custom options. And, at crushpadwine.com, you can digitally make your own wine.
- Don't Tell Me How to Play: Hidalgo told the story of his son's stunning moves on the football field in his first year playing the game. Had he picked up the moves from his old man? No such luck: he'd learned it all from the video game, Madden 2006. "The reality for kids is that there's no difference between the physical and the digital world," Hidalgo admitted.
- Give Me Experiences, Not More Things: For young consumers, goals matter. Learning matters. Nike studied the example of Apple's Genius Bar and decided that the wow-this-is-something-that's-helping-me was a positive reaction to emulate. "We believe in innovative, inspiring experiences for young consumers," the Nike CMO explained. "And we wanted to find a simple but intuitive way to interact with our customers."
The answer was NIKEiD, a digital tool that enables users to design their own shoes.
"We launched it in 1999 as an ecommerce site," Hidalgo told the ANA audience, "but we kept trying new things that would enhance the customization process. The brand partnered with MTV to sponsor the music awards and co-sponsor the Staying Alive Foundation, an HIV/Aids awareness organization that recruited celebrities (Foo Fighters, Wyclef Jean, Rza of Wu Tang Clan, The Black Eyed Peas) to design NikeiD shoes that were auctioned on eBay.
The marketing department kept redefining the web site, to the point where it was named a winner in the Cyber Lions category at the Cannes Lions International Advertising Festival. They also discovered that pairing a designer and a consumer with a laptop between the two of them was a strong starter: NikeiD Studios (online) and iDCubes (in 21 NikeTown retail stores) "proved that combining digital, choice, and expertise led to a premium experience," Hidalgo said.
The retail iD extensions, he said, soon began making contributions to both the brand image and Nike's bottom line. "Five percent of our space began providing 25 percent of our revenue." Because the shoes are shipped to customers, the program demands no in-store revenue and produces higher per-customer revenues. And self-designed shoes became the inspiration for product extensions: sidewalk touch screens encouraged street traffic to step inside the stores.
Entire teams came to Nike for full uniform designs. Athletic shoes, in particular, began to offer more features like custom spikes for different kinds of fields. And technology gave potential online buyers a more granular image of stitching and materials, the ability to view the product from different angles. They also had the chance to access a virtual library of tens of thousands of other consumer-created shoe designs.
"The power is all in the hands of the consumer," Bob Greenberg, ceo/global chief creative officer of Nike agency R/GA, added. "The focus is the product and the product is the platform for the experience. And, it's not just a tool or an application. The same software drives the Web site that drives the signage in store…. It's the biggest part of the experience, of developing a different relationship with the brand.
"Making better athletes almost has become a new mission statement for the company," Hidalgo added. "The 2008 Beijing Olympics, in particular, was a "special moment in time for the Nike brand with 4 billion people around the world watching. It was a chance for us to amplify our brands, to make a powerful statement that could bridge both the physical and digital worlds."
And it provided the springboard for one of the most ambitious, multi-platform, global programs in any kind of marketing history. Run With Us promised to be the "world's largest running event." And, on August 31, 2008, "The Nike + Human Race" fulfilled that promise.
Tapping into the technology afforded by Nike+, which is a partnership with Apple that allows runners to monitor performance with a pad in their shoes and an iPod in their hand, the event offered runners a "Run with Us" challenge in a 10K race in 25 cities all over the world. Eight hundred thousand runners signed up for "the largest race in the history of the planet," according to Hidalgo.
As the event literally moved around the world--from Singapore to Tokyo to Los Angeles to Bogota to São Paulo to Paris to Munich to Seoul to Tokyo--Nike moves with it as a digital global event. "It was a consumer experience we couldn't get anywhere else," Hidalgo said. "It reintroduced our partnership with Apple, but it also introduced us to new customers all over the world."
Technology kept the community of runners engaged before and after the event. Nike's race experience stated 90 days in advance of the event. And, on August 31, enthusiasts all over the world could track its progress in real time at every stage of the event.
"In Shanghai, where running is not part of the culture, 20,000 people showed up at 7:30 in the morning in the pouring rain," Hidalgo said. "And the digital-technology services made the event much more than a run for distance: one country's runners competed against another's'; mothers in different parts of the world went one-on-one against their daughters; country music competed against hip-hop."
"You've been challenged" was a Nike message that engaged one pocket of participants after another. And people responded. And, in truth, they also partied. To reinforce the connection between the brand and rewarding its most loyal users, Kanye West performed at a post-race event in LA, Nada Surf played in Portland, Oregon, and Moby played in Paris.
"It was a full experience," Hidalgo explained. "For young consumers, sports are important. But so is music. We created headline acts to close out the races and lend even more to the overall experience with the brand."
Post-race, 75,000 runners logged in with Nike every day-a figure 80 percent higher than pre-event visits. A follow-up Nike women's marathon sold out in three hours. (The format was the same: You could show up live in San Francisco or compete digitally from wherever you happened to be."
Said Hidalgo: "Our revenue continued to climb in the 90 days before the race as running became our fastest growing category. It grew steadily at a double-digit pace. And, more importantly, it created meaningful experiences for consumers. It showed us all how we could combine consumer physical and digital experiences to create powerful new connections with our consumer."About the author: