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Thu, Dec 09, 2004 - Page 12 News List

Nike's controversial ads boost brand name

MARKET SAVVY The company has apologized for a new ad that offended some people in China and Singapore, but notes that it was popular with teens

AP , PORTLAND, OREGON

In the space of one month, Nike Inc. ads featuring basketball star LeBron James slaying a Chinese dragon and a kung fu master have been banned in China and met with a flurry of criticism in Singapore, key markets for the sneaker giant, which hopes to further expand in Asia.

While Nike quickly backtracked and apologized for the ads, the manufacturer has a history of edgy sales messages -- a strategy that has helped endear Nike to youth by positioning the company as a corporate rebel.

"Nike has a well-deserved reputation for sailing close to the edge in its advertising -- so it's no surprise that a Nike ad courts controversy," said marketing professor John Quelch, a senior associate dean at the Harvard Business School.

Controversy has been one of many ways in which Nike has made its brand stand out, a strategy company officials have been blunt about in the past. In 2000, then-Nike vice president Charlie Denson responded to criticism of Nike's racy Olympic ads by saying: "We have a history of making controversial ads, and we certainly have succeeded in that."

That year, NBC yanked a Nike ad in which track star Suzy Hamilton narrowly escaped a masked chainsaw killer -- a commercial intended as a spoof on horror movies, but which critics said glorified violence against women.

Nike drew attention during the buildup to the 1992 Barcelona Olympics with its commercial showing an exhausted runner vomiting and a boxer dripping with blood. "You don't win silver," the ad read. "You lose gold."

In Asia, where Nike posted US$1.36 billion in sales last year -- or 13 percent of its total revenue -- making the brand stand out from others is crucial, industry observers say.

Sales were up 19 percent from 2002, when the company's revenue in Asia was about US$1.1 billion.

In China, the TV commercial offended government regulators because it showed a US sports icon defeating the dragon, a symbol of Chinese culture, and the martial arts master, a symbol of national pride.

In Singapore, a similar ad sequence was also deemed offensive, but for a different reason.

Commuters in the city-state recently found over 700 bus terminals plastered with graffiti-like posters of James. Singapore still considers graffiti an offense punishable by flogging.

"We told Nike this is what the impact would be," said Henry Goh, sales marketing director in the Singapore office of Clear Channel, which owns the bus terminals.

"They said: `This is what we want,'" Goh said, explaining that his office fielded calls and e-mails from more than 50 fuming commuters, almost all adults.

But older people aren't the target market for Nike.

"We heard that teenagers liked it so much they tried to take some of the posters off the bus shelters as souvenirs," Goh said.

Similarly, in China, Nike spokes-woman Shelley Peng said the ads, while upsetting to older consumers, were also popular with teens.

"It was not Nike's intent to show disrespect to the Chinese culture," Peng said in a prepared statement, which stressed that the ads were meant to inspire youth to overcome obstacles, as LeBron does when he slays the kung fu master and the green fire-spewing dragons, as well as other video game style villains.

"Kung fu and the dragon, both are symbols of national pride," countered Sujian Guo, the editor of the Journal of Chinese Political Science in San Francisco and a former policy analyst for the Communist Party's Central Committee in China.

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