During client meetings, I'm often asked the question - "Which brands are getting it right?"
My answer is, and has always been, "Nike".
Louise Story's article, "The New Advertising Outlet: Your Life", running in today's New York Times does a excellent job at explaining exactly why Nike is so far ahead when it comes to a brand understanding how best to leverage the shift in media and advertising consumption in the digital age.
The important take away from the article is not that brands are moving funds form traditional advertising to digital media and the web. Everyone already knows this. Rather, it's that smart brands like Nike are putting more funds and attention towards the concept of "branded utilities".
Ms. Story writes:
"Since April, Mr. Saenz, 53, has been running with a Nike+, a
small sensor in his running shoes that tracks his progress on an Apple
iPod he carries. After each run near his home in Louisville, Ky., he
docks the iPod into his computer and posts details of his run on the
Nike+ Web site. There, he has made friends with other runners around
the world who post running routes, meet up in the real world and
encourage one another on the site.
Nike’s famous swoosh is there all along. For Nike, this is advertising.
“It’s a very different way to connect with consumers,” says
Trevor Edwards, Nike’s corporate vice president for global brand and
category management. “People are coming into it on average three times
a week. So we’re not having to go to them.”
The success of Nike+ is bad news for the traditional media
companies that have long made money from Nike’s television commercials
and glossy magazine ads.
Last year, Nike spent just 33 percent of its $678 million
United States advertising budget on ads with television networks and
other traditional media companies. That’s down from 55 percent 10 years
ago, according to the trade publication Advertising Age.
“We’re not in the business of keeping the media companies
alive,” Mr. Edwards says he tells many media executives. “We’re in the
business of connecting with consumers.”
Later in the piece she writes:
"Nike executives say that much of the company’s
future advertising spending will take the form of services for
consumers, like workout advice, online communities and local sports
competitions.
“We want to find a way to enhance the experience and services,
rather than looking for a way to interrupt people from getting to where
they want to go,” said Stefan Olander, global director for brand
connections at Nike. “How can we provide a service that the consumer
goes, ‘Wow, you really made this easier for me’?”
BUT media companies rely on advertising to pay the bulk of
their programming and newsroom costs. Traditionally, the “service”
provided by advertising was cheaper media content for consumers. But
the services of the future may be virtual workout coaches, map
applications for cellphones, health advice and matchmaking services."
As the Times article points out, Nike understands that traditional advertising and the big
agency and media structure the currently exists isn't set up at all to
accommodate this shift because the model doesn't fit the traditional advertising paradigm at all. Buying digital media can easily be incorporated into a media buyer's spreadsheet. Launching Nike+ can't.
For me, the article explains quite well why my firm, electricArtists,
has been spending so much energy and effort building up core service
offerings and an expertise in the area of branded utilities. Not only
are branded utilities the future for all brands in the digital media space, but for brands like Nike and
STA Travel (our client for the Travel Tools project) it's also the
present.
Turn it into a utility.
Congratulations to my colleagues at electricArtists and STA Travel, as our STA Travel Tools project was recently chosen by The Times of London as one of the "50 Best Travel Websites of 2007" - coming in at #23 on the list. 
If you read this blog with any frequency, then you know I'm a big proponent of brands developing distributable applications and branded utilities. 