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Tuesday, June 9, 2009

Lebron James, Kobe Bryant and poor strategy

Why it’s important to never put all your eggs in one basket

This years NBA finals had a potential dream match up for the NBA. With the favorites to meet in the final being the leagues two biggest stars, marketing execs were drooling at the chance to put these two at the forefront. These two athletes, Kobe Bryant and LeBron James, are constantly rated as some of the worlds most famous individuals, recognized in all corners of the globe. They commanded immense amounts of extra security at the Olympics; they have both been featured in documentaries, books and on more magazine covers than one could conceivably count. Since both teams were heavily favored to meet in the finals and breezed through the first few rounds, the ad campaigns started early. Nike, Vitamin Water, ESPN and even the NBA itself started to promote this “dream” match-up. Everyone with a vested financial interest had decided that the Lakers and the Cavaliers would be meeting in the finals and they all hedged their ad campaigns on this. Unfortunately, sports don’t go to script that nicely and LeBrons team never made it as far as everyone thought they would. When the Orlando Magic, led by fellow Olympian Dwight Howard, ran up against the Cavilers, they were victorious in a mere 6 games. This led to having just Kobe in the finals, facing an Orlando team that no company has been running ads about.

Nike and Vitamin Water, two companies who have become synonymous with great ads for the world of sports, failed terribly this time around. The two companies hedged all their campaigns during the most watched games of the year around a possibility. Yes, it was a likely one, but far from a guarantee. Now these companies are scrambling to get out relevant ads as well as doing some damage control over their lack of anything Orlando Magic based.

It’s important to position yourself to take advantage of likely events, which Nike did in this case. Both Kobe and LeBron are Nike spokespeople and Nike knew they would be selling millions of shoes if the two made the finals. The ads were in place, both on Television and on websites to make sure everyone watching basketball knew that the two people likely squaring off in the finals were Nike men. Unfortunately for them, they are now stuck with the fact that they backed the wrong horse. Orlando’s all-star Dwight Howard is an Adidas man and Adidas simply stop placing ads featuring him because they too believed the James-Bryant Hype. This isn’t the first time this type of failure has happened in the sporting world (see Dan vs Dave with Rebook and 19-0 with the Boston Globe) but no lessons have been learnt. Now millions, if not more, have been lost. Again.

It’s a very simple lesson too, a cliché we all learnt when we were young – don’t put all your eggs in one basket. It’s fine and quite advantageous to put more weight on the future you see as most likely, but if your campaigns are based on something as unpredictable as the sporting world, make sure you spread your eggs out. Adidas didn't even bother competing with this idea and has completely blanked on running ads for the superstar who took down James, Dwight Howard. And when you're buying into your competitors hype machine, that's never a good sign.

But for a company as big as Nike, it’s ok to take a big risk and fail occasionally. But for a small company, this type of error can be devastating. So next time you’re reviewing your marketing, think about what you’re relying on. Make sure you are relying on things that will come true. It’s true that you can always bet on death and taxes, but you can also always safely bet on sunshine in July, snow in February and hockey year round in Canada. You can’t safely bet on the publics’ opinion regarding politics, the shape of the stock market or the hotness of a celebrity. There are times for taking big risks as a business owner, but make sure you have some control of that risk. And unless Nike was going to give James some better teammates, they had no control.

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Rebecca said...

I'll bear that in mind, thanks Mark.

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