Michael Vick as Product Pitchman

Has Michael Vick's on-field performance been so good that the public has forgotten his dog-fighting past? He hasn't gotten any serious endorsement deals, but a Philly area Nissan dealer hired him for this spot:

This is a dreadful ad, in my opinion, although I don't know if it's much worse than most local car-dealer spots. But I guess Vick had to start somewhere on the endorsement comeback trail. I just can't see a spot like this making Nike sit up and take notice.

Best Buy Takes on Dick's and Sports Authority

When a category killer has finished killing off its category, what's the next step in growth? Moving into somebody else's category, it seems.

Best Buy is introducing health and fitness equipment, stuff that would seem more appropriate at Sports Authority.

A 30-foot-long in-store health and fitness presentation area enables consumers to sample many of these devices before they buy. On display are state-of-the-art heart rate monitoring watches, pedometers, special MP3 players, ear buds, headphones, yoga mats, scales, blood-pressure monitors and other products from leading manufacturers such as Gaiam, GoFit, H2O Audio, MIO, Polar, Sportline and Yurbuds.  

They are concentrating on techie sports equipment, which lends some logic to their actions, but it does beg the question of what the next move might be.

Hard times in Nascar Nation

After being the hot sport, at least in terms of sponsorship, for a number of years, Nascar has slipped badly recently.

• 12 of the 42 drivers have no sponsor for the 2009 season
• TV ads were down in 2008 to $539mil, a drop from $567mil in 2007
• Both TV ratings and track attendance have dropped three years in a row

Nonetheless, Nascar still remains the #1 sport in trerms of sponsorship, and trails only NFL in most other measures. Still, the numbers above seem particularly troubling when you consider than the full effects of the automakers' problems haven't been factored in yet for Nascar.

Nike: Too much marketing?

I have a professional bias in favor of spending money on marketing. A few weeks ago, I mentioned an article I recently did about maintaining ad/promo levels during a recession. But here's the other side of it:

Nike's increased marketing spend on Olympics efforts and store-related expenses have some analysts concerned about the company's ability to compete in tough economic times.

"It was the two expense issues that drove this worry," said Matt Powell, a footwear and retail analyst for Princeton Retail Analysis, Princeton N.J. "The marketing spend was greater than people expected and it made everybody nervous"

During a conference call with analysts on Wednesday, Nike executives said marketing expenses for the Olympic Games and the Euro Cup soccer tournament would cut hurt fiscal 2009 earnings.

It may just be my bias showing, but I'm also looking at Nike's track (so to speak) record of successful growth. My guess is that this will turn out well for Nike. But perhaps not -- anything can be overdone.

In any case, Nike management seems to take a realistic view:

Nike executives tried to assuage some concerns, noting that the increased spending on marketing in the year of the Olympics is normal and smart. However, they were realistic about challenges the company faces in the U.S., where fourth quarter (ended May 31) revenue grew only 4% to $1.7 billion, compared with 16% to $5.1 billion worldwide.

Fila: Resurrecting a brand

Fila seems to be a hot brand in South Korea, fueled by endorsement ads by Paris Hilton:

... Paris Hilton makes a splash in conservative South Korea. In ads for Fila, the sportswear brand, Hilton strikes a fetching pose in a belly-baring $180 white tracksuit. Hilton, who is reportedly paid $1 million a year to endorse Fila in Korea, prances around in teeny tennis togs in a TV commercial. Off camera she recently acquired a pooch she named "Kimchi" after the spicy Korean dish, a gesture that delighted her fans--and Fila brass.

Korea accounts for almost three-quarters of Fila's worldwide sales, however. In the US, the brand has dropped from $687mil in sales a decade ago to $61mil last year. Fila was once the #3 sports shoe brand in the US, and its downfall was related in part to legal problems involving accounting for payments to retailers.

... the Securities & Exchange Commission charged him with fraud for helping the vendor inflate its earnings. Epstein, the sec charged, signed documents stating that Fila owed $1.38 million to now defunct Just for Feet, a Birmingham, Ala. retailer.

The current ownership blames the downturn largely on an effort to go up-market: "Chasing luxury for us was not meaningful." The boss has cut costs, closed company stores (only one remains open, in New York, because they can't break the lease), and are now trying to re-establish the brand in the US:

The new focus: selling workout sneakers and apparel through a number of mass-market retailers, including Foot Locker and Kohl's.

Worldwide, they have what sounds like an interesting approach:

Yoon aims to inspire licensees in Europe, the Middle East, Africa and Latin America to put more energy into brand building by giving them ten-year rolling contracts in which they pay only a small portion of the expected royalties up front. Yoon believes the longer contracts encourage licensees to spend more money marketing.

Good luck, Fila. I like the emphasis on the long-term and on marketing.

Unique store-siting criteria

Dick's Sporting Goods is expanding its relationship with Major League Soccer:

Dick’s Sporting Goods has enhanced its relationship with Soccer United Marketing, which now names retailer as the official sporting goods store of Major League Soccer, the U.S. Men’s and Women’s National Teams, as well as 10 of 14 teams playing in the league.

The five-year agreement expands an existing relationship the retailer has with the sport. The larger partnership aligns with the company’s growth plans to open stores in the markets where teams play and are located. Dick’s will also sponsor the remaining four MLS teams when it opens stores in those markets.

There's nothing unusual about relationships between sports franchises or leagues and marketers, of course. What's different about this is that Dick's is apparently planning to use the presence of MLS franchises as a driver in their decisions on which markets they will move into.

A marketer with its own team

How would you like to own a sports franchise and name it after your brand? Say hello to the New York Red Bulls (nee Metrostars) of Major League Soccer. They just bought the franchise for $100 million (I didn't say it was cheap) and announced the renaming (they bought naming rights to the stadium too).

Although this sounds peculiar to American ears, it's common in soccer. Red Bull owns a team in Austria, and I have a jersey for Cruz Azul -- a popular Mexican soccer team named for the cement company that owns it. Closer to home, NASCAR has been known to display a logo or two.

This will almost certainly get other marketers thinking:

It is enough to make some companies salivate at the advertising opportunities. "Any company that does significant sports marketing and sponsorship has to be looking at this very closely," said Tim Westerbeck, a branding expert and the managing director and principal at Lipman Hearne in Chicago.

More bad news for hockey

Relating to the "Olympic Reflections" post below, Ad Age reports that hockey's TV ratings are down 21% on NBC, compared with two years ago (before the strike).

And get them back watching. Although Nielsen Media Research figures show the 21% drop, to be fair, NBC has had only four telecasts so far this season. On Comcast’s OLN, the league’s new cable partner, ratings are flat with that of ESPN2 two years ago, but are down more than 60% from games on ESPN in the 2003-04 season.

Interest is so low that one national TV writer quipped in a syndicated column that OLN no longer uses Nielsen ratings for games; it simply asks viewers to sign in to its guest book.

And then there's the gambling problem ...

Olympic reflections

NBC must be breathing a sigh of relief. Or perhaps a couple sighs. One is that the Olympics are over. The other is that they managed to scrape through with a 12.2 -- since they had promised advertisers a twelve to fourteen share, they just barely managed to avoid the embarrassment of makegoods. What they didn't avoid is the embarrassment of the lowest-rated Olympics ever, topping (or bottoming) the previous record-holder, 1968. And in four years, they aren't going to avoid the embarrassment of trying to explain why they're trying to sell spots for the 2010 games for two hundred bucks each to used car dealers and CD collections of Jose Feliciano's Greatest Hits.

NBC wasn't helped, of course, by Michelle Kwan withdrawing from the Games, by the US hockey team turning into a whiny bunch of losers, and Bode Miller being, well, Bode Miller.

But I think what NBC forgot is that viewers aren't willing to watch 1994 TV in 2006. One of my friends was complaining about trying to watch the women's figure skating finals -- the showcase event. She had to watch numerous secondary skaters, with numerous cutaways to other events (ski jumping, biathlon) she didn't care about, until the featured stars came on, near bedtime.

This is the way Olympics have always been broadcast, of course -- we were expected to watch what the network wanted to show us, whenever they felt like showing it. But NBC has forgotten that viewers have changed, and TV needs to change with them. We now want to watch the events we choose, at a time we choose, and if NBC isn't willing to go along, then a sizeable portion of their audience is prepared to say, "Okay, we'll watch American Idol instead."

NBC got record traffic to their website during the Games, and maybe that gave them the message.

But there are people even unhappier about the Olympics than NBC:

The National Hockey League: They were hoping that the US hockey team might help make people forget about the lost season. Not likely. And when you go 1-4-1, it's best to leave town quietly in the middle of the night, rather than mouthing off to the press with whiny complaints about accomodations. The Canadian team didn't do a lot better. This is not what the NHL needed.

Bode Miller's agent: He came to town no doubt dreaming of multi-million dollar endorsement deals. He left trading his first-class ticket in for an economy seat and hoping the difference would help pay Bode's bar tab.

Management buying Sports Authority

Another buyout: Sports Authority is going private in a management buyout.

Michelle Kwan's endorsement power

The New York Times has an interesting take on celebrity endorsements, noting that Michelle Kwan has had unusual success in gathering endorsement deals for someone who has never come home with the gold.

As Ms. Kwan gears up for the 2006 Winter Olympics in Turin, Italy -probably the last chance for the 25-year-old figure skater - she has already lined up major deals with Coca-Cola, Visa and East West Bank. She will be the lead Olympian in Coke's 2006 Olympic advertising plans, which include commercials on network and cable television as well as a major in-store promotional effort by Coke. Her image will be stamped on promotions for 14 Coke brands, including Dasani and Minute Maid.

But the choice of Ms. Kwan is unusual. For most athletes, a winning performance at the Olympics is essential - turning gold into big money. After the 2002 Olympics in Salt Lake City, Sarah Hughes, the surprise gold-medal winner in women's figure skating, walked away with endorsement offers in the millions of dollars. Figure skaters like Kristi Yamaguchi and Dorothy Hamill have translated Olympic gold into long-term endorsements, opportunities generally unavailable to athletes who win a silver or bronze medal. Even for Ms. Kwan, sports marketers say, Turin may establish whether she can elevate her career to a new level of marketability.

It's noted that Nancy Kerrigan's star faded rapidly after she unexpectedly lost to Oksana Baiul (though Kerrigan didn't help her own cause any).

The Times also notes that Kwan's personality and clean reputation contribute to her endorsement value:

Part of Ms. Kwan's commercial success can be traced to a reputation rare among well-known women her age. Her name does not surface in gossip columns or police reports. Her picture has never appeared in Penthouse magazine, nor has she made an appearance on Celebrity Boxing, as the skater Tonya Harding has done. What most of her fans know of her personal life is usually limited to her supportive family and California background.

Or, as the sponsors put it:

For Ms. Kwan's employers, her sterling reputation makes her a solid investment during a time when many endorsement deals include "behavioral clauses" stipulating that if the athlete does anything to damage the brand, the company has the right to terminate the contract.

"I never have to worry about her making a bad decision that would embarrass us," said Dominic Ng, the chairman, president and chief executive of East West Bank.

Frito won't be in the Super Bowl

Frito-Lay announced that it won't be advertising in this year's Super Bowl -- because the new CEO doesn't see much return:

"I have a little calendar page that says: 'Lay's runs Super Bowl ad. Awareness increases by .000004.' So although it gives you enormous bragging rights, the facts are, at the end of the day, it's a very expensive proposition that doesn't give you a terrific payback.

One wonders how much room these is for F-L's awareness to increase. Visa and McDonalds will also be among the missing on Super Sunday this year.