The Party’s Over

In any love triangle, one party always loses. While Nike courted two agencies for more than two years, longtime steady Wieden & Kennedy ultimately prevailed over interloper Goodby, Silverstein & Partners.
The athletic shoe and apparel company last week moved $30-50 million in billings from Goodby to Wieden to consolidate its estimated $350 million U.S. ad account. At the height of its relationship with the Beaverton, Ore.-based client, Goodby handled about half of the U.S. billings.
“We were hired during hard times for the client in order to offer a different perspective and shake things up,” said Goodby creative director and co-chairman Rich Silverstein. “I think we did our job.”
Nike officials said the shift was made to streamline brand-level advertising. “We believe [streamlining] can best be achieved by focusing all our efforts through one agency, and we chose our longtime advertising partner,” said director of advertising Rob DeFlorio. He went to Goodby’s San Francisco office last week to deliver the news in person.
Nike representative Scott Reames said market conditions have changed since the company hired Goodby; that the company has focused on producing fewer ads with heavier media support. The consolidation decision was made prior to the arrival of new chief marketing officer Ellen Turner, he said.
The shift in agency assignments comes as Nike’s U.S. sales continue to slip. In the first quarter FY2000 ended Aug. 31, the company’s athletic footwear revenues increased only 3 percent to $941 million, compared to $917 million in the same period last year. U.S. athletic apparel revenues declined 11 percent in the quarter to $332 million. Total Nike brand U.S. revenues decreased 2 percent during the quarter.
“The client is undergoing cost-cutting measures which makes it more efficient to have only one agency,” said Silverstein.
Reames said DeFlorio’s decision was neither sudden nor protracted. “He’s basically been laying the foundation, so if he made the decision [to shift the entire account to Wieden], it would be done smoothly,” he said.
Goodby’s exit seemed almost inevitable since the Nike executives who hired the agency either moved on–like global ad director Geoffrey Frost (now at Motorola)–or moved to other divisions, as did U.S. ad director Chris Zimmerman, said sources.
DeFlorio, Zimmerman’s successor, worked closely with Wieden’s newly installed creative director, Bob Moore, on the business in Europe four years ago.
Moving Moore into the top creative slot, as well as other recent reshufflings at the agency, including the return of Susan Hoffman from the shop’s European operations, helped solidify Wieden’s position. So did the commitment from co-founder Dan Wieden to get more involved in the office’s operations.
The competition with Goodby seemed to spur Wieden to do even better work. The Portland, Ore., agency has been in top form lately, producing memorable spots for Nike including “Beautiful,” featuring scarred athletes, and a sardonic take on the Y2K scare in “The Morning After.”
“It was probably healthy for us to have the wake-up call when we did,” said Wieden. “The difficult part about it is that we have such enormous respect for Jeff, Rich and their crew.”
Goodby’s print ads for women’s Inner Actives apparel line are currently running in magazines but the agency has had no new broadcast assignments for months. Silverstein said the account loss would not result in layoffs.
Goodby was hired as a project shop in March 1997. Silverstein characterized his agency as the product shop for Nike: “We never got near the base Nike brand.” Goodby’s assignments were skateboard and mountain bike gear, apparel, women’s products and the premium Alpha line. “The tough stuff,” he added. K