air max comprar online baratas Nike is likely to cut marketing
CHICAGO Nike, one of the world’s biggest sports marketers, could send shock waves through the industry this year by cutting its marketing budget as part of a push to reduce expenses.
Nike, known globally through its endorsement deals with athletes like Tiger Woods and Kobe Bryant and European soccer clubs including Manchester United and Arsenal, signaled that it was in a cost cutting mode by saying on Tuesday that it would eliminate as many as 1,400 jobs, or 4 percent of its work force.
Even if the company reins in advertising spending, sports sponsorships and endorsement deals which is considered likely Nike would still be able to maintain its dominant position, analysts said.
“They have such penetration in their marketing budget that they can use attrition to cut off contracts,” said Robert Boland, professor of sports management at New York University. “You’ll definitely see a different allocation and you’ll definitely see some reduction. When you’re the biggest, you have the power to do that.”
Nike officials would not address specific plans but said everything was being reviewed.
“As part of restructuring our business, we’re analyzing all aspects of our costs, including sports marketing contracts, advertising and brand marketing,” said Derek Kent, a company spokesman. “There are opportunities for reductions in endorsement contracts, and we are evaluating them on a case by case basis.”
Eliminating deals with lesser athletes, teams and sporting events could result in significant savings for Nike, analysts said.
“They still want to uphold the spending on their marquee athletes,” said Tom Shaw, an analyst with Stifel Nicolaus. “But there are opportunities to cut back on the secondary and tertiary type athletes or even teams that perhaps didn’t really captivate or drive eyeballs to the brand.”
Nike spent an estimated $255 million to $260 million on sponsorships last year, up from $240 million to $245 million in 2007, according to IEG, a research firm owned by WPP Group, the advertising conglomerate.
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Nike spent $143.4 million on advertising in the first nine months of 2008, down slightly from a year earlier, when it spent almost $184 million over all, according to TNS Media Intelligence.
Nike surprised analysts in December by emphasizing cost tightening in a conference call after third quarter results. In the past, the company was not known for frugality.
“Nike’s sports marketing strategy looking backwards was a little bit more free spending than it will be moving forward,” said Paul Swangard, managing director of the Warsaw Sports Marketing Center, an academic arm of the University of Oregon.
Omar Saad, an analyst with Credit Suisse, wrote in a research note Wednesday that Nike was at the beginning of a longer term restructuring that would extend beyond job cuts.
“We think a story of slowing revenues will be overshadowed by Nike’s willingness and ability to cut expenses in the coming quarters,” Saad said.
Nike’s North American marketing budget, he added, is likely four times that of its rival Adidas and far above what is needed to maintain its market share.
Shaw, the Stifel Nicolaus analyst, said Nike had also started spending its marketing dollars more wisely, pointing to the use of Bryant in viral marketing, or marketing that depends on social networks, e mail messages and word of mouth.
“They’re still using their brand power and big, marquee endorsement contracts,” Shaw said. “But instead of coming up with an expensive TV campaign, they came up with something that people are watching on YouTube. It’s more bang, less buck.”