At a time when Nike plans to trim marketing spending, Goodby, Silverstein & Partners has been tapped to handle the U.S. launch later this year of the Alpha line.
Goodby will develop all U.S. ads for Alpha, Nike's new premium brand, which will include everything from basketball shoes to snowboarding products, said sources. Longtime Nike agency Wieden & Kennedy will handle international advertising for Alpha, according to sources.
With the win, San Francisco-based Goodby will control nearly half of Nike's estimated U.S. ad budget one year after joining its roster, said sources. Portland, Ore.-based Wieden still controls more U.S. billings than Goodby and also has significant ad assignments overseas. Nike spent $211 million in the U.S. in 1997, according to Competitive Media Reporting.
There was no shootout between the two shops, said sources. Goodby was in position to win Alpha because the shop already creates ads for Nike FIT apparel and ACG products, which will be rebranded under the Alpha name.
Executives at Nike in Beaverton, Ore., and the two ad agencies declined comment.
Goodby and Wieden will likely see their existing Nike assignments dwindle in size. As part of an across-the-board drive to cut costs, Nike president Tom Clarke told analysts last week that the company plans to slash about $100 million in marketing expenditures. Chairman Phil Knight said that reduction should not be interpreted as dissatisfaction with the new "I can" campaign, created by Wieden.
The cuts come as Nike is pressured by smaller rivals, such as Adidas, and disappointing financial results. Last week, Nike reported that third-quarter earnings dropped to $73 million, from $237 million in the same period the year before, due to weak sales in the U.S. and Asia. Its U.S. footwear revenue dropped 18 percent to $800 million.
The Alpha line will be Nike's first attempt at branding without its swoosh logo. Nike executives have said that Alpha will be one of the company's priorities this year.