The branding wizards at Nike are often ten steps ahead of everyone else, and they have more than their superior sneakers to thank. In the last decade, the Beaverton, Oregon-based company has more than doubled its revenue, to $20.9 billion in 2011 (an impressive 10% increase over the previous fiscal year), and assembed a stable of labels ranging from Cole Haan to Umbro. It seems counter-intuitive, then, that over the past few years, Nike has dramatically reduced its TV and print advertising. So, what’s the deal? Digital, my dear Watson.
“Gone is the reliance on top-down campaigns celebrating a single hit—whether a star like Tiger Woods, a signature shoe like the Air Force 1, or send-ups like Bo Jackson’s ‘Bo Knows’ commercials from the late ’80s that sold the entire brand in one fell Swoosh,” writes Scott Cendrowski in a feature on Nike’s “New Marketing Mojo” that appears in the February 27 issue of Fortune. “In their place is a whole new repertoire of interactive elements that let Nike communicate directly with its consumers, whether it’s a performance-tracking wristband, a 30-story billboard in Johannesburg that posts fan headlines from Twitter, or a major commercial shot by an Oscar-nominated director that makes its debut not on primetime television but on Facebook.” Having learned from its online stumbles (a late ’90s assumption that March Madness was of global, rather than domestic, interest) and successes (Nike iD), the company has high hopes for its Digital Sport initiative, which some critics say “are more about keeping retail prices high than innovating.”
But don’t tell that to Mark Parker. “As a product geek, I have never been more excited as I am today about innovation,” the CEO said at a day-long investor meeting last June. “Things like digital integration between athletes and technology, one-of-a-kind customization at scale, open source design, a quantum leap, I think, in engineering and manufacturing that closes the loop on the one side and also opens the door to smarter products and higher performance.” He proceeded to announce an accelerated revenue target of $28 billion to $30 billion by 2015.