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Nike Captures Marketing Gold With Eye-Catching Olympic Strategy

08/11/2012 09:35 EDT | Updated 10/11/2012 05:12 EDT
AP
Turkey's Asli Cakir Alptekin kisses the track after winning gold in the women's 1500-meter final during the athletics in the Olympic Stadium at the 2012 Summer Olympics, London, Friday, Aug. 10, 2012. (AP Photo/Matt Dunham)
Star sprinter Usain Bolt may be the talk of the track at the London Olympics.

But those bright yellow shoes worn by so many athletes have also turned plenty of heads.

Some people love the fluorescent footwear while others hate it. Either way, Nike has captured marketing gold in London with its Volt line of shoes.

"I love the colour of the shoes," Canadian hurdler Phylicia George said via e-mail from London. "It's easy to notice when watching them on the track and they stand out."

And that's exactly what Nike wanted. TV viewers around the world have no doubt been asking "What's with all those yellow shoes?"

While its rival Adidas reportedly spent more than $150 million to be the official London sponsor, Nike has managed to sidestep strict marketing rules because shoes are not subject to official clothing-use requirements.

"Using the volt colour for all of the Nike shoes is designed to make a bold statement on sport’s biggest stage," Martin Lotti, Nike's global creative director said through a company spokeswoman.

Nike has got great bang for its buck with the Volt, says Scott Martyn, a University of Windsor professor who specializes in sport and Olympic history.

"You have to say that the (marketing) value for money is fantastic, that they've done exceedingly well given the relative investment and they've capitalized on it quite significantly," said Martyn.

Martyn said Nike's success with the Volt is reminiscent of the attention the company gained by providing gold shoes to retired American sprinter Michael Johnson. He used them to win the 200 metres in a world-record time at the 1996 Summer Games in Atlanta.

"They're looking for some type of visual return or return on investment beyond simply the mention that they sponsor X," said Martyn. "Shoes are one way in which those restrictions that are placed on product advertising are somewhat in a grey area. So they can actually address it by not enhancing the relative size of the Nike swoosh. But what they do is, they actually change the colour to a vibrant colour, and therefore your attention is attracted to it, and you happen to see the Nike swoosh."

Martyn said Nike has thrived on making a splash at the Games over the years without being a top-level Olympic sponsor. Given the constraints that the IOC places on advertising, companies have to get creative.

"In essence, they haven't paid for the rights, or they haven't secured the privileges to call themselves an official sponsor," said Martyn. "But for some reason, the public develops an association, because of the marketing campaign, with them to the Olympic Games."

Over the years, there have been many cases of ambush marketing at the Olympics. And it is likely to continue, says Martyn.

"If history is any indication, there's a lot of effort of maximizing (a sponsor's) association (with an athlete) and stretching that affiliation as far as possible before someone says you've gone too far," said Martyn.

But while Nike achieves marketing success, its strategy could cause concern for the International Olympic Committee. Noting that Nike is much more inside the "Olympic house" than it used to be in terms of sponsorship, Martyn predicted the IOC will continue its efforts to increase Nike's Olympic-related investments instead of cracking down on its unofficial marketing activities.

Attempts to punish ambush marketers, he added, have not been successful because of the public backlash.

Bill Cooper, former director of commercial rights management for Vancouver's Olympic organizing committee, said Nike has produced an "iconic" shoe with the Volt.

"And to reach that visibility is probably quite strategic," said Cooper, who also managed an protected the Olympic brand for the Canadian Olympic Committee in 2010 and still consults for the COC. "Obviously, this summer, the focus on athletics is a great opportunity for sport manufacturers to drive product sales. So they're going to do their best to exploit that consumer enthusiasm and launch products that are visible and iconic and, hopefully, have that translate into sales."

But Cooper said it's dangerous to call Nike an ambush marketer.

"It's tricky with Nike, because Nike contributes a phenomenal amount of (financial) support to athletes and teams and national Olympic committees around the world," he said.

"They have a very legitimate story to tell whereas other organizations, who truly do partake in ambush marketing in its most damaging format, don't necessarily contribute to amateur sport. They just ride on the coattails of the Olympic movement and undertake marketing activities that marginalize the commercial integrity of the Olympic movement without contributing to amateur sport."

Meanwhile, George says athletes would balk if told to wear an official shoe brand at the Games — and not just for sponsorship-related reasons.

"Shoe choice is very important," said George, who wore the yellow shoes while finishing sixth in the 100-metre hurdles earlier this week. "A track athlete's spikes are like a piece of equipment that needs to be specifically fitted for them. Not every spike works well for every athlete."

Bolt, for example, wears Puma footwear.

But Cooper says Nike's actions pose some concern to the IOC. As the Olympics have grown over the years, the request for investment from sponsors, product licencees and broadcasters has increased accordingly. The IOC's promise to protect the Olympic brand has also grown.

Cooper says in order for amateur sport to remain financially sustainable over the long-term, the IOC and its international sponsors must co-exist with Games, athlete and team sponsors.

"If (they) are not able to co-exist and they don't have enough room to tell their marketing story, then the whole system starts to lose a bit of commercial sustainability," said Cooper. "That private-sector funding is what makes the system tick."

He predicted the IOC and sponsors at various levels will continue to struggle to strike a delicate balance. Given Nike's extensive sponsorship of Canadian teams and individual athletes, maintaining the balance will be key to Canada's future Olympic efforts.

However, the official Games sponsorship shoe will be on the other foot at the 2016 Summer Olympics in Rio de Janeiro. Nike will serve as the official sponsor of those Games, while Adidas will be in a potential position to ambush its rival.

"Their roles will be reversed in Rio," said Cooper.

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