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IPA Effectiveness Awards


Institute of Practitioners in Advertising, 44 Belgrave Square, London SW1X 8QS, UK
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Agency: Simons Palmer Clemmow Johnson Author: Alan Cooper




One of the core objectives of these awards is 'to create a better understanding of how advertising works', in this case over a longer period of time.

All previous winners of this category have had campaigns with consistent creative themes and art directional looks. BMW (1994), Andrex (1992) and PG Tips (1990) all have remarkably consistent advertising which has 'added detail' and built up around the core of the basic brand proposition over time. Indeed, the BMW paper asserted that creative consistency was vital for a strong brand:

...all brands, including car brands, are inanimate objects which have been given a personality. Creating the perception of a strong personality requires consistency.

This paper proposes an additional and very different model. Over the last six to seven years Nike creative work has been highly eclectic and varied. The underlying strategy has remained the same but its creative articulation has embraced a gamut of executional styles and evoked a spectrum of emotional responses.

This advertising approach has helped build a strong, multi-faceted brand. To use an analogy, the Nike model is to grow a crystal by expanding it and adding more facets (to reward the consumer by giving him, or her, additional and different ways to appreciate the brand). In contrast, the model for the previous winners is a sphere which has enlarged over time but whose shape remains similar to the original core (Figure 1).

The development of such a compelling brand image through advertising has been integral to Nike's business success in the dynamic and target-fragmented market in which it operates.


The paper will document the relatively weak position the brand had evolved into during the mid-1980s. It will describe the advertising strategy that was subsequently developed and implemented. It will attempt to analyse other possible factors that could have contributed to the brand's success in the 1990s and conclude that advertising played a critical role.


Nike is now such a robust brand it is difficult to imagine that it was ever less than strongly successful. However, after an encouraging launch in UK in the late 1970s, sales and market share declined in the mid to late 1980s (Figure 2). Consumer panel data and trade estimates recorded Nike as the fourth or fifth largest brand in the market.

In 1989/1990 a new general manager was appointed and the company's domestic advertising arrangements were reviewed (its long-term international advertising arrangements continued). The overall business task that was set was to return Nike to revenue growth and, ultimately, exceed market growth rates while, at the same time, improve profitability. The brand mission was to grow its recognition as the (pre-eminent) serious sports brand - rather than be known simply as a casual/fashion brand.


The key objective was to build the Nike brand by developing a stronger, more salient and compelling sports image. This would help raise Nike above the plethora of established and emerging brands in the late 1980s. (A quantitative survey conducted at the time showed that 48 brands could be named spontaneously. Sports retailers' displays were floor to ceiling walls of 'white leather' with brands often looking more similar than different.) Qualitative research echoed this problem.

Nike's image is not sufficiently different from the competition...image was hard to pin down as there was nothing particularly special about it.

Source: Graham Hall Research


There is a wide spectrum of types of sports shoe and apparel brand purchasers. At one end there are the core sports participants who take their sport seriously: they are looking for genuine performance sports shoes and need to have confidence in the brand and product that it will deliver when they make demands on it.

At the other end of this spectrum are the style statement wearers who will not play sport but who need to feel that the brand is authentically sports-based (the whole rationale for the category) and not an invented or ersatz sports brand. Critically, these consumers choose brands that make positive and distinctive statements about themselves. 'Brands-with-attitude' confer some of that attitude to their wearer. For Nike this attitude has to be rooted in sport. Figure 3 summarises this targeting and motivation spectrum.

A strategic model of communication was developed to ensure that this targeting/motivation spectrum was always matched (Figure 4). This model has been applied consistently to all advertising since 1989/90. The core of every piece of communication is a demonstration of Nike's leading sports credentials (the proposition). This is dramatised with a strong, fresh, highly confident, inspiring attitude (tone of voice).


Nike advertising is invariably sport specific (as opposed to dramatising a wide spectrum of sports in one execution) recognising that lowest common denominator advertising might result if players of different sports (whose motivations and attitudes may contrast) were targeted in the same communication. One of the three core proposition areas has been at the heart of each advertisement over the last six years.

  1. Product performance benefit
    Nike Air cushioning is one of the key performance benefits: however, other specific product benefits are dramatised when appropriate.
  2. Leading sports players wear Nike
    With this route advertising never simply asserts that 'successful players wear Nike': the individual's athleticism, achievements, style of play or attitude are used to add further dimensions to the communication.
  3. Nike truly understands the experience of competing in that sport
    Getting under the skin of participants requires making powerful emotional connections. In demonstrating Nike's genuine understanding of what it is like to play and compete, long-term brand loyalties with sports players can be developed.

Advertising during the period of this paper was developed by Nike's international agency, Weiden & Kennedy, and its UK agency, Simons Palmer.


The period of sales decline in the mid-1980s occurred at the same time as significant decreases in advertising expenditure (Figure 5).

Nike's increasing commitment to advertising investment since 1989 has been extremely marked. Expenditure has risen considerably and the brand has had the leading sports brand share of voice in every year since 1990 (Figure 6).

The way in which Nike used media has also evolved significantly. Until 1990/91 the brand had used a combination of TV (eg for important new product launches) and specialist sports press to target the core participants of that sport. The latter medium, although precisely targeted to participants, did not necessarily reach large numbers of them nor did it address the broader sports shoe purchasing consumer. Although TV still accounts for the majority of annual advertising investment, budget limitations prevented Nike from using this medium nationally for more than about two bursts (ie a total of 8 to 10 weeks) a year to reach this wider audience.

On a trial basis in 1991 - and after successful feedback more widely thereafter - national outdoor advertising was introduced. Using 48 and 96 sheet posters enabled impactful and empathetic campaigns not only to reach the core participants of that sport but also to be seen by core participants of other sports, sports players in general as well as the casual/fashion wearer (Figure 7). Using this 'public' medium would broaden consumers' perceptions of Nike away from its historic associations of simply being a running and American sport brand, and would introduce new consumers who felt that Nike did not necessarily have a presence or product offering in their sport.

As a 'street' medium posters are highly appropriate for Nike: the executions are talked about by consumers on their way to school, work, clubs etc. For a significant proportion of purchasers sports shoes are about display, and street posters are the ultimate public display medium. The flexibility of sites gives powerful creative opportunities (eg football executions outside Premier League grounds, marathon executions along the London Marathon route).

For an investment equivalent to less than one national TV burst Nike could achieve a national, high-profile presence across five to six months of the year - an impossible task with TV and specialist sports press. Initially, Nike was the only sports brand using the medium so it could dominate and build a powerful campaign, whereas TV and press had considerable competitive clutter. Nike's increasing use of outdoor advertising is illustrated in Table 1.


  % Total advertising expenditure
  1991 1992 1993 1994 1995
TV 49 56 48 47 50
Outdoor 2 27 33 32 31
Press 48 17 18 20 18
Radio 1 1 1 1 1

Nike deploys significant monies on tactical advertising (TV, posters and press). Not only does this link the brand with major national sports events, but also demonstrates that the brand has its finger on the pulse of sport and, thus, strengthens its sports credentials and closeness to sports players and fans.


Taking its financial year ending in April 1989 as the benchmark, Nike's sales revenue has grown by 372% over the last seven years. Consistently reliable independent market data has been difficult to access over this long period: Nike switched from consumer purchase panel data to retail audit data half way through this period. However, Nike did subscribe to both sources for one common year (1992/93) hence relatively accurate estimates of trends in total market volumes and values are possible. Unfortunately, it is not possible to quote consistently reliable brand share data over this long period. The total sports shoe market has grown by approximately 110% in revenue over the seven years. Nike sales revenues has outperformed the market by a factor of at least three over the long term (Figure 8).

Annual company report figures from Companies House shows that for the five-year period from 1990, Nike has been the leading performer of the major sports companies in terms of growth in turnover and profitability. Nike's growth in turnover in 1994 vs. 1990 is nearly three times higher than that of the next best performing company (Reebok). Company profits growth is nearly twice that of Reebok's (Figure 9). The long-term business goals set in 1989/90 have been achieved.

What are the factors responsible for Nike's impressive sales and profits success that is well ahead of the market and its leading competitors?

This performance has occurred at the same time as renewed consistent investment in advertising. However, to address the question more fully we will first demonstrate that product development, distribution, price and 'street fashionability' could not solely have caused this success. Subsequently, we shall establish that advertising has driven stronger brand imagery which has heightened consumer demand.



For the average (or even well-informed) consumer, eliciting product performance differences between sports shoes is more difficult than in most other durables categories. Detailed specification data is not always readily available at outlets (unlike, for instance, with cars or brown goods); product inspection may not necessarily indicate any performance benefit differences; and the small circulation enthusiast magazines carry product reviews only very occasionally. All the major brands have performance-enhancing shoe technologies, and over the period of this paper Nike's introductions have been accompanied by competitive technology launches. More importantly, given that the majority of purchasers do not use the shoe for sport, performance benefit details are invariably of minor relevance.

Aesthetics are a choice-influencing factor, but with the exception of top-of-the-range models, most sport categories share similar design styles across the brands in any one season. Innovative and distinctive designs for top-of-the-range shoes are produced by many brands, not just Nike, and no one company ever has a sustained competitive advantage in this respect.


Nike's retail distribution has always been limited to sports retailers to maintain and strengthen its authentic sports reputation. This contrasts with several of its competitors who have extended their distribution to high street shoe shops in order to boost volumes. Independent retail audit data has been subscribed to only since 1991: it shows that relatively minimal changes in sterling-weighted distribution have occurred for Nike's four principal sports business categories over the last four to five years (Figure 10).

The sales increase that Nike has enjoyed since 1991 far exceeds these minimal changes, thus, changes in distribution must be considered only a negligible factor. It is understood that the universe of sport retail outlets has not increased appreciably over this period - the high street recession has been a limiting factor in this respect.

The increasing sophistication of sports retailers means that merchandising and point-of-sale activity is closely controlled. All brands are allotted specific periods and Nike's allocation is similar to other major brands: it does not have a sustained advantage over its competitors in this area.


Since its establishment in mid-1980s Nike has commanded a price premium. Unfortunately, independent retail price data is available only for the last four years, but it does demonstrate that Nike's price premium over its two leading rivals (Reebok and Adidas) has actually widened (Figure 11). This helps confirm that the brand's long-term sales performance is highly unlikely to have been achieved by price reductions. It also indicates the increasing strength of brand in that it can achieve significant sales growth while maintaining (or widening) its price premium over the principal competition.

PR Coverage

In 1987/1988 the media began to show interest in sports shoes. Early coverage reflected their desirability, trendiness and high price.

Girl, 17, mugged for £95 Reeboks.

Headline, national newspaper

Your trainers or your life.

Cartoon, national newspaper

Sports shoe advertising rarely received media coverage in this period. However, a textline analysis of national newspaper and magazine articles has shown a massive increase in media coverage of Nike advertising (Figure 12). In 1989 less than a third of Nike media coverage referred to its advertising - in 1994 this proportion was 76%.

Increasing media coverage could be partly responsible for boosting Nike prominence and appeal, but advertising has an extremely important role in triggering this. It is the raison d'Ítre for the media coverage in a large proportion of instances. The value of this free coverage would be the annual equivalent of several million pounds of advertising expenditure.

Street Fashionability

Shoe Aesthetics

The majority of sports shoes are purchased for casual, not sports usage. Most are worn by ordinary people for everyday use: however, a smaller - but highly visible - style-conscious proportion adopt the 'in-style' to make personal fashion statements. Street fashionability develops in 'waves'. There have been three significant 'waves' over the last six to seven years:

  1. Technical leather sports shoes (eg premium-priced running and basketball shoes) - the more overtly stated the technical design feature the better.
  2. Outdoor/work-boots (eg non-technical black or dark brown leather rugged boots): a look inspired by the 'grunge' trend.
  3. 1970s retro (eg low-priced, non-technical canvas shoes).

Nike products were available to benefit from the first 'wave'. However, Nike had relatively weak or non-existent product line-ups for the second and third waves: it found itself at a disadvantage relative to the competition and thus experienced difficulty in exploiting and leveraging additional sales from these street fashion dynamics. The 1970s retro fashion has seen the widespread adoption of Adidas products, whose three-stripe logo design - initially adopted by style setters (eg the band Oasis) - has penetrated street style in many ways. The Nike brand barely existed in Great Britain in 1970s and so it has little period heritage from which it could leverage sales.

Brand Credibility

For the casual wearer (ie the mass market, not the style-conscious minority), product aesthetics is one of several factors that can affect purchase decision (alongside comfort, price and size availability). As has been mentioned, within a category, aesthetics can be broadly similar across brands: a key difference is the brand name and logo which is generally readily visible on the product.

The emotional imagery encapsulated by the shoe's branding can be highly influential (over and above the sheer aesthetics of the logo/name). It is hypothesised that Nike achieves considerable added value through on-shoe branding as it enhances its appeal and makes a strong statement about the wearer. The ideal demonstration of this would be branded and unbranded product preference research. However, no such research has ever been conducted.

Another indicator would be a comparison of attitudinal brand preference scores. Purchase consideration levels have been tracked since 1991 and demonstrate increasing levels of consumer predisposition to Nike, relative to all other principal brands across a broad population base (15 to 35 year olds) (Figure 13). This would indicate that, ceteris paribus, the appearance of the Nike logo on sports shoes has done more over the last five years to increase the purchase consideration for those shoes than the appearance of any competitor's branding has done for its shoes.


Since 1989/90 Nike's saliency and image has strengthened considerably, in a way that is consistent with advertising investment. The pattern of the rise in top-of-mind brand awareness matches the rise in expenditure (Figure 14 and Figure 15).

More than any other factor, advertising has contributed to Nike's distinctive and compelling brand character and strengthening brand preference levels. The multi-faceted nature of its imagery is entirely in tune with the individualistic nature of youth/young adult culture in the 1990s. Monolithic type badge brands generated appeal in the 1980s: nowadays youth brand appeal is more fragmented and the gallimaufry represented by Nike's imagery is very potent in this context.

Its brand has a strong character, it is magnetic and makes people take notice of its various elements, it is dynamic and modern.

Fusion Research 1994

What Nike has achieved over all its competitors is a very strong emotional attachment to the brand. It is a brand that is fully embraced by all its target audience.

Nike advertising plays the key role in the formation and understanding of the Nike brand personality...the more leading edge are particularly attracted to the advertising.

Source : RDS 1993/94

An anecdotal demonstration of the strength of Nike's branding is that since the beginning of 1996 the name 'Nike' no longer appears as the brand sign-off in advertising - the distinctive 'swoosh' logo is used alone. The author believes this to be unique for any advertiser in this country and would not have been possible unless the brand had been so strongly established.

The appeal of the Nike brand has strengthened considerably across a wide spectrum of socio-demographic sub-groups (Figure 16). (Detailed demographic sub-group data is available only from 1992 onwards.) This reflects the heterogeneity of the advertising's targeting and creative executions which has helped build rich brand values that appeal to different consumers.

The company is achieving its mission of growing the brand's recognition as a serious sports brand. Trends in brand attitude attribution scores (Figure 17) demonstrate Nike's growing authentic sports imagery which is essential to motivate purchase from both the core participant and the style statement wearer (see Figure 7).

A strong brand is of genuine benefit to a company when it results in increased revenue. The paper examines two approaches to evaluating the long-term return on advertising investment.

In the seven financial years from 1989/90 Nike's (UK) cumulative sales revenue was approximately £710 million, while media expenditure (source: Register MEAL) was £26.2 million for the last seven calendar years. Thus, actual sales were 27 times greater than the recorded media investment. This ratio of advertising expenditure to sales revenue (a/s ratio) is low at 31/2, when an industry average a/s ratio is nearly twice that (6%). This is a considerable achievement in a category in which brand imagery (via advertising) is many times more influential to consumers than actual product performance.

More pertinently, Nike's actual cumulative sales during this seven-year period were 90% higher than those based on a projection if sales had trended in line with total market sales (Figure 18).

Had Nike's sales simply performed in line with the market, the 'lost revenue' opportunity would have cumulated to £350 million. The paper has set out to show that Nike has outperformed the market average largely owing to advertising that has made the brand more prominent and created an compelling and motivating brand image. The additional £350 million revenue achieved over that if sales had followed the total market trend demonstrates that Nike's advertising investment has paid for itself in net incremental sales approximately 13 times over. This itself might be conservative because - given the brand's potency - if advertising stopped now Nike's sales increases would, doubtless, exceed that of the total market for at least a further one to two years.

Unfortunately, Nike does not release more detailed accounting figures for the UK that could analyse the marginal net cost of incremental sales and, hence, enable more specific conclusions about incremental profitability to be related to advertising investment.


Advertising has sought to build a strong emotional bond between Nike and a wide spectrum of consumers. It has built a brand with numerous and varied facets over a long period which can be interpreted in subtlely different ways by participants in different sports and by the leisure wearer. The brand has grown almost like a crystal which, depending on who holds it and how it is held up to the light, will reveal different detailed imagery and values: although its core character (the crystal's shape) remains the same. This contrasts with previously accepted wisdom that a brand should be nurtured around consistent core values (ie the analogy with an inflating balloon). While the Nike case history does not show that the latter model is inappropriate it does demonstrate the validity of a heterogeneous brand-building model which allows consumers to access brand values that are appropriate to them. With Nike's fragmented target audience (from 12-year-old boys playing basketball to 60-year-old women runners) adopting this model has helped generate sales that exceed media expenditure by a factor of 27.

© IPA, Institute of Practitioners in Advertising, London 1996