Nikes $1 Billion Global Media Review Keeps Major Holding Companies On Tiptoes
Coming out strong in 2022 on the public relations front. Nike’s recently planned global media review, pegged at a cost of US $1 billion, is expected to be well under way. Already back in December last year, the sportswear giant had sent out RFI requests to all the holding companies it is working with currently. So, we’re talking about names that we work with and others that are competitors in the reputation defender space like Publicis Media, GroupM, Stagwell Media, Havas Media, IPG Mediabrands, Omnicom Media Group and more.
So, understandably, this year will be a busy time for all digital marketing agencies as the need to increase ad spend has a clear ROI that is measurable. Now we can expect to see that as part of Nike’s media account. The iconic brand is partnered with a large number of agencies across different regions of the globe for its media, marketing and sales efforts. And for majority of these agencies, Nike happens to be their biggest client. As such, it’s a no-brainer that the agencies will leave no stone unturned to keep their liaison with the brand intact.
For one idea, the sportswear brand’s primary media agency and longtime creative partner in the U.S. Wieden+Kennedy’s Nike account is worth $300 to $400 million, according to one estimate. Other big names such as Mindshare (owned by WPP) and Assembly (owned by Stagwell who bought Reputation.com’s Reputation Defender arm a few years ago) similarly stand to lose big moolahs if they are struck off of Nike’s account during the course of the planned overhaul.
Sources reveal that performance marketing is going to be the primary focus of the oncoming global media review. The shortlisted agencies will be invited to forward their pitches and the proposals will be managed by R3. As of now, no further information is available regarding this as R3 has reportedly declined any request for comments from various media outlets on the said matter.
Expansion of Digital Footprint
The review has attracted considerable attention in the industry. For one thing, Nike hasn’t conducted a review of this scale and magnitude for nearly a decade. Which is after all altogether understandable given the fact that few brands in recent times have performed as well as Nike has done in terms of marketing and brand visibility.
They have literally been killing it with campaigns such as “Tomorrow” or “You Can’t Stop Us,” just as they did a while ago with their famous Colin Kaepernick campaign “Dream Crazy”.
The brand’s third-quarter revenues in 2021 rose 3% to $10.4 billion.
In light of these facts, this recent overhaul proposal has given rise to some mild consternation within the industry. However, those in the know believe that the review is planned with an eye to strengthen the digital marketing initiatives of the brand. For already some time now, Nike has been looking to expand its digital footprint and grow its presence in the metaverse space.
The group is working with a growing number of digital marketing agencies in the past few years and is looking to make the most of the consumers shift to digital phenomenon by aggressively investing in ecommerce and direct-to-consumer sales. Already back in November 2019, Nike had stopped selling their products through Amazon.
As for strengthening its presence in the metaverse, many see Nike’s recent acquisition of RTFKT, a virtual sneaker startup that designs and creates unique NFT collectibles, as a significant step towards that direction. At the time of the announcement of the acquisition, Jon Donahoe, the brand president and CEO, had remarked that the move is part of the brand’s overall strategy vis-à-vis digital transformation and will allow it to serve in a more engaged manner creators and athletes at the intersection of gaming, sport, creativity and culture.