Thursday, February 12, 2009

Nike: The Sports Marketing Giant Cuts Back?

Welcome back to The Sports Ace, where our teams are always locks for the Big Dance...never on the bubble.

News broke today that Nike, a true heavyweight in the sports marketing business, may cut its budget in that area due to economic considerations (link to a story: - thanks to Ron Goch - @RonGoch - for Tweeting it over).

The article raises some interesting points, which I'll elaborate on briefly:

--Potential cuts in partnerships with athletes would be made among lower-tier players, preserving relationships and contractual agreements with better-known stars. If you have limited marketing dollars, you have to make sure you get maximum bang for the buck, and a big part of that is sticking with the key assets that got you to where you are in the first place. Bigger names = bigger traffic = bigger return.

--Nike marketing executives, despite their potential reduction in budget, still probably won't be pleased if they see a reduction in results - namely market share and mindshare. And honestly, they shouldn't be. Their internal staff and outside help will be tasked with improving results using cheaper strategies and tactics, and I think the job can be done. Don't be surprised if plenty of social media, YouTube, etc. ideas get the green light.

--The belt-tightening, if it indeed happens, likely will be a healthy process for the company. It's easy to spend money fast, especially in the sports marketing biz. Granted, the circumstances aren't optimal, but it's not a terribly bad thing for them that they have to look at everything they're doing under the microscope and make sure they're getting the most bang for their buck. They'll emerge from the exercise as a stronger company.

It will be an interesting year at Nike headquarters, not only for the belt-tightening that may occur but also for the great ideas and campaigns that would surely follow. They've delivered in the past, and there's no reason to expect any less this year...I, for one, will be watching with interest and seeing what I can learn from them along the way.

I'm out like the SEC in men's college hoops.

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