How FuelBand Could Help Solve Nike's Armstrong, Pistorius Problems

Can Nike's digital future distance it from the taint of disgraced professional athletes?

Yesterday, Nike announced that it had suspended its contract with Oscar Pistorius, the double-amputee track star charged with the premeditated murder of his girlfriend. While Nike said in a statement that Pistorius deserves due process, it's clear the company is concerned how standing by Pistorius at this time might reflect poorly on its brand, especially after a Nike ad featuring Pistorius alongside an ill-conceived tagline--"I am the bullet in the chamber"--went viral.

It's only one of many celebrity marketing woes Nike has faced in recent years. The company sponsors thousands of professional athletes. But as these public figures run into trouble, it's become increasingly difficult for Nike to stay out of the spotlight--not to mention increasingly arbitrary which celebrities Nike chooses to stick with. In October, for example, the company dropped Lance Armstrong from its roster of sponsorships over irrefutable evidence related to his doping scandal; on the other hand, Nike controversially decided to stand by Tiger Woods, despite the golf superstar's much publicized infidelities, and it chose to renew Michael Vick's endorsement deal after the NFL quarterback was released from prison. During my reporting on Nike over the last several months, as part of our recent profile of the company, I learned that Nike is possibly rethinking its long-established reliance on celebrity endorsements to avoid these headaches, especially when it comes to Nike's digital future.

In particular, the FuelBand, the slick electronic wristband Nike launched last year, might hint at a marketing template where the company is less dependent on professional athletes. The device, a simple bracelet with just one button, enables users to track their activity around the clock, as they play tennis or simply walk to work, monitoring everything from steps taken to calories burned. It also allows Nike's consumers to become brand advocates, not just as they wear the eye-catching FuelBand throughout the day--as they might carry an iPhone in the supermarket or read a Kindle on the subway--but also as they share their activity through Nike+, Nike's digital platform. Through the system, users can easily sync their FuelBand data and share it with friends on Twitter, Facebook, and any number of social media services. It democratizes Nike's brand and crowdsources its marketing.

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As one top former Nike designer who was intimately involved in the FuelBand told me, the marketing strategy could mark a turning point for how the company connects with consumers. "It's a pretty huge shift in thinking for Nike," the source says. "Really, that was the first time that Nike was trying to break away from an elite marketing model, where we put this stuff on the best athletes in the world and hope it trickles down to people wanting it because of that."

The FuelBand represented a different approach. "We were trying to create something with that product that spoke to the masses and was built up from the ground," the source explains.

Ironically, the FuelBand was inspired in part by the Livestrong bracelet, the yellow wristband that became a cultural phenomenon. Nike CEO Mark Parker saw the FuelBand as a "smart" version of the Livestrong bracelet, and his thinking perhaps proved not only prescient but serendipitous given the controversy around Livestrong's relationship with Lance Armstrong. (When I met with Parker late last October, he said he still wears the Livestrong bracelet, though he wasn't sporting it at the time. Tellingly, he was actually wearing two FuelBands. "I don't have it on today, but I usually do," he told me.)

Still, as much as Nike might try to rethink its relationships with celebrities, the company is often inescapably tied to these professional athletes. After all, it has a building on campus named after Tiger Woods (though it removed the cyclist's name from the Lance Armstrong Fitness Center). And it's very much reliant on the Kobe Bryant's and Lebron James' to market its apparel, and wants to avoid a competitor like Adidas stealing the next Derrick Rose. Even for the FuelBand, Serena Williams is known to wear one on the tennis court.

But so does Apple CEO Tim Cook, who sits on Nike's board. And I can't really imagine him playing a sport other than Angry Birds on his iPhone. He, and the millions of Apple consumers addicted to Nike+ products, are perhaps a more sustainable source of brand advocacy down the road.

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