What's in it for shoe companies?

For shoe companies that sponsor tons of athletes, it's not thinking about "I give x amount of dollars to an athlete and I get y dollars in return". Nike doesn't sponsor a bunch of athletes because they're getting a calculable return. They do it because they're Nike. They do it so that more often than not, those guys crossing the line in the top few places have swooshes on their shoes. I suppose you can make a connection between that and increased sales. But really it's just "we're Nike, this is what we're capable of, f*** you". The connection between sponsorship like that and brand success is more intangible than straightforward investment and return. Consequently it's a game that the smaller companies are finding they can't play anymore. I mean, how can you justify salaries for runners who the company's customers don't even recognize? Intangible brand recognition can't save you from budget cuts. But at the same time, they're finding that the alternative of sponsoring just a few guys isn't worth it either. Add on top of all that the fact that it would be weird as hell for running shoe companies to not sponsor pro runners, a situation that the companies seem to want to avoid. So what we're left with is a hodgepodge of sponsorships and endorsements that don't make a whole lot of financial sense one way or the other. Some companies are dropping out of the sport altogether. Other companies are dropping great runners left and right but still signing up and comers simply because they're trying to win in a lose-lose situation. So the runners who are able to stay on are expected to "earn their keep". But that's really impossible to expect. You have to sponsor 90 failures to get those 10 who are worth it. The other way is the proverbial all eggs in one basket. You sponsor ten guys and you're probably going to get 10 failures. Without cutting that wide swath of talent across the board, it's just not worth it. In my opinion, it's Nike style or nothing.

That has one exception to it though. Basketball shoe endorsements are so successful because the players are superstars. They're guys whose names you could slap on any product and make it cool. The return on investment for them is very tangible. But really the only thing in track that comes close to this is Usain Bolt. He's the only guy in the sport right now who a company could throw everything at and be sure they're going to get more back. He is tracks only superstar.

Well said and a tad depressing. So Nike is essentially keeping the sport alive?

Puma are doing alright for themselves

http://i.imgur.com/0VlklFS.png

Lopsy Lu wrote:

Well said and a tad depressing. So Nike is essentially keeping the sport alive?

Tragic.

Nike turned running into jogging with patronizing damping shoes, and now has running on life support.

Did the ancient Greek need shoes?

Lopsy Lu wrote:

Well said and a tad depressing. So Nike is essentially keeping the sport alive?

No. Running was plenty competitive before big sponsorships and it'll continue to be even if that aspect of the sport has to die(which I don't think will anyway). As long as guys can make enough through a combination of a small sponsorship(even if it's just gear), prize money, and a part time job, the sport will live on. Outside of very poor countries, running has never been a sport that people get into to make money. And even in those very poor countries, the amount of money that a sub elite American runner makes would be plenty to promote competition.

So, in my experience really dedicated runners are pretty picky with their shoe choice. The shoe has to fit well, fell right and have the correct amount of support. They don't seem to care about what shoe bekele trains in. The weekend warrior type runner who makes up a much larger market, doesn't follow the sport at all. I just don't see sponsorship affecting running shoe choice. Perhaps I'm wrong.

How do shoe companies benefit from sponsoring athletes?

I think thing some people don't understand (especially the second post) is that the shoe companies deal with a world wide audience.

Americans tend to think America is the world.

Basketball players are superstars in the USA and most in the city they play in.

Even football is an American phenomenon.

People tend to buy products they see a lot of- so if 15,000 run the Utica Boilermaker and 50,000+ are at the post race party they notice that the runners on the huge stage getting the money and accolades are wearing Nike, Adidas, etc.

People then buy that product.

The sport of track and field (and distance running obviously goes with it) was more popular in the late 70's/early 80's.

There were also more top US distance runners running road races (in addition to track races).

These athletes were visible to, right there, often mingling with, the other runners and spectators.

I think if our top runners would show up to some rad races it would help the sport and then we could all see how sponsorship helps sell product.

One last thing- I don't know how many of you are old enough to remember when the Gasparilla 15K decided to drop the elite runners thinking they had the numbers and people didn't care if elites were there.

The race became a regular local race, numbers dropped. They brought back elites and numbers increased.

Somehow, there is an allure of having world class athletes at an event- they sell and people (whether they know it or not) buy their products.

Before anyone tells me how wrong I am- this comes from years of dealing with this- advertising and selling products and understanding what it takes to sell products.

What's in it for shoe companies?

For many, it's a validation of product, that the product performs at the most aspirational level. Think of Ford and Chevy and Dodge... those NASCARs aren't available to the public for purchase, but they are trying to prove how good they are as brands in building the ultimate racing machines.

It's also an executive level play. Mark Parker loves seeing guys continue the tradition that started the company. Kevin Plank wants to see continued dominance with athletes in the MLB, NCAA, and NFL. Herbert Hainer wants to see his brand own the pitch, the World Cup, and be relevant in the NBA. It's what is sexy. How are you going to fire up millions of investors without stories with athletes, because these companies were founded with the athlete in mind.

So, bottom line, it's about story-telling and firing up the investor-base with success stories.

Very, VERY well said KCwol.

tfgbhj wrote:

You have to sponsor 90 failures to get those 10 who are worth it.

But yet groups like Hansons and McMillan are constantly bashed on this website for doing just that.

A couple of years ago I was wandering around the Boston Marathon Expo with someone who had been a really big gun at one of the big shoe companies and we got into this very topic. We agreed that if a company lands a huge name it's profitable for them. We agreed that Puma was probably getting their money's worth from Bolt. From there it got murkier.

We decided that at least 5,000 of the people running the next day would be in either Asics or Nikes and that if we asked why, not one would say it was because Ryan Hall wore Asics or Galen Rupp or the previous year's winner wore Nike. So we weren't sure what was in it for the shoe companies.

Later, I thought back to the 70s and 80s when the sport was expanding and several shoe companies tried either to get into the running shoe market or greatly expand their presence there. I saw two distinct groups. One group had companies like Brooks, New Balance, Nike, Reebok, and Saucony and were still a presence in the running market, well not Reebok so much now but they've been around. The other group had Avia, Gola, Kangaroo, Pony and Turntec. They're all pretty much gone.

The companies in the first group have always had at least a few "name" runners in their gear. The second group either never bothered or at best was less than half-hearted about having some top people in their gear.

I think it gives a company some credence and exposure when they've got some elites in their gear even if it's hard to explain how it happens. How many of us, for example, considered Sketchers a "real" running shoe company before they signed Meb? How many of us now think of Sketchers as a "real" running shoe company? I don't know the answer but I know the second group was non-existent before Meb and is considerably bigger now.

I run in Skechers now and you're right, Meb is the main reason I even tried them. Love the Go Runs, btw!

We decided that at least 5,000 of the people running the next day would be in either Asics or Nikes and that if we asked why, not one would say it was because Ryan Hall wore Asics or Galen Rupp or the previous year's winner wore Nike. So we weren't sure what was in it for the shoe companies.

I was gonna bring this up in my earlier post but I was going on too long.

I think the exposure you talk about is why most people wear the shoes. They may not even realize it's because elites wear them. They watch TV, go to races and see Nike, etc on the awards stand and buy them.

What's in it to sponsor football and basketball players.

I don't think most people notice who is wearing what just THAT they are wearing them- almost in a subliminal way.

It's all about exposure.

A track spike is the absolute definition of a specialty shoe. It's only used by people in that specific event. I imagine that majority of track participants in this country are in high school. How do you get an impressionable teenager to wear an off-brand? Why would a kid choose Saucony, Mizuno, etc. over Nike or Adidas? It's as though if these companies don't try they fail, if they try they fail. Tough spot to be in.