Wednesday, November 23, 2011

The Motherf@#!ing Campaign That Couldn't Save K-Swiss

Five years ago, Nike (NYSE:NKE) stock sat at $47 a share. At the same time, K-Swiss (NASDAQ: KSWS) sat at a comparable $35 a stock. When K-Swiss launched their Kenny Powers MFCEO campaign in July of this year, shares were valued at $11, compared to Nike’s $92.

Something terrible had happened to the K-Swiss brand over those five years. They had been on the losing side of a shifting brand paradigm that had left them, along with similar brands like Abercrombie and Fitch (NYSE:ANF, $71 in 2007, $31 in July, 2011), in the dust.

According to a July study released by Mr. Youth, a social media and youth marketing research company run by a real-life Don Draper, CEO Matt Britton, what today’s young adult crowd looks for in brands is as follows:

- Help them express their personal brand
- Integrate organically into their world
- Understand how they operate in social networks
- Become an on-demand brand
- Get to know them — don’t make assumptions

This paradigm differs hugely from the one that existed 10, or even five years ago, when brands like K-Swiss, A&F, Ed Hardy, Von Dutch and Hollister reigned supreme. Back then, young consumers looked for brands with a clear identity that they could wear. But in 2011, these brands violate – on a cardinal level -- Mr. Youth’s rules 1 and 5. They expect consumers to eschew personal brands in favor of corporate brands, and are thereby disinterested in truly knowing consumers. The differences in brand slogans highlight this difference.

Nike encourages consumers to “just do it,” putting both the onus of accomplishment and the ownership thereof on the consumer. K-Swiss’s “I wear my K-Swiss,” on the other hand, is a pledge of allegiance to the brand, a pledge that now falls on disinterested ears. Nike additionally avoided the crisis of this brand paradigm shift by creating their Nike ID product, which allows consumers to customize their shoes down to the stitch.

Mr. Youth also forewarned of the ineffectiveness of traditional TV advertising on young adults, especially college students: “We’re certainly seeing a lot of trends where kids aren’t watching TV, they aren’t bringing TVs with them to college,” Britton told Forbes. “The linear TV model doesn’t make sense.”

It was in the light of these facts and the success of Nike’s February 2011 long-form “Black Mamba” online video (featuring Robert Rodriguez, Kobe Bryant, Danny Trejo, Bruce Willis and Kanye West) that K-Swiss’s Kenny Powers MFCEO series came into existence to help sell K-Swiss’s new shoe, unceremoniously named “Tubes.”

Ostensibly the goal of the campaign – an amalgamation of both long and short online videos coupled with print ads and promotions in Foot Locker stores -- was to slow the outflow of K-Swiss’s share of the athletic shoe market. They were armed with a few key consumer understandings:

  1. Consumers appreciate the “ironic man” trope: Here, Kenny Powers serves as a healthy blend of The Office’s Michael Scott awkward and Isaiah Mustafa machismo. Powers even takes a swing at Mustafa’s senseless Old Spice promises in spots for K-Swiss Power cologne: “Who knew you could bottle the scent… of boner?”
  2. Consumers like brands that are self-aware: Kenny Powers serves as a parody of the old K-Swiss identity: loud, muscular and stupid. In one video, we’re taken into a marketing meeting where Kansas City Chiefs QB Matt Cassel (now K-Swiss’s Marketing Director) rattles off stupid tag lines like “K-Swiss Tubes: Shut up and buy them,” and “K-Swiss Tubes: Beer me, bro.” Essentially we’re asked to believe that K-Swiss has matured because they are mercilessly making fun of themselves. The company appears to be self-aware.
  3. In spite of understandings 1 and 2, consumers still really like famous people: And this campaign has lots of them. Michael Bay, Cassel, shock-fitness instructor Jillian Michaels, MMA Champion Jon "Bones," Rey Mysterio, Josh Cox, Gael, Monfils, Urijah Faber, Mark Cuban, Patrick Willis, and probably someone else that I forgot.
The idea is farfetched. Kenny Powers is not real, of course. He’s Danny McBride’s character on HBO’s Eastbound and Down. The commercial therefore melds realities, having real-life actors and celebrities interacting with the fictional Kenny Powers.

In an interview with Wired, campaign creator Matt Murphy of branding agency 72andSunny described the process by which the campaign came to fruition. Both K-Swiss and HBO were on board early on, but HBO was shocked that K-Swiss was game: “Have you seen the show? You know he’s a washed up, steroid riddled athlete, right?” An HBO rep asked. The central idea of the campaign was to stay true to Kenny Powers and all the crass, loud antics that would entail. This meant a real symbiotic relationship between Eastbound and K-Swiss, but more importantly, ensured that the videos would, indeed, be entertaining. The show had already been established as hilarious – why tamper with that?

72andSunny has done work for Activision’s Modern Warfare 3, Nike Action Sports (oddly) and Xbox 360. In short, it was an agency used to connecting with the audience that K-Swiss was hoping to pair with its new training shoe: young, self-aware, and with a comedic sensibility closely aligned with shows like Arrested Development, The Office and Eastbound and Down.

So here’s how the campaign breaks down. An introductory video was released, cuing up the concept. Kenny Powers bought up 51% of K-Swiss stock and was now in charge of the company, and he “signed the baddest athletes […] to run the company.” The video garnered 500,000 views on Funny or Die, with such positive reviews from viewers that it has since established what the site calls “immortal” status, meaning viewers no longer get to vote on whether it is funny or not. It simply is. The video picked up another 2.3 million hits on the K-Swiss Youtube channel. Part of this video’s success, and the subsequent popularity of the rest of the campaign, was indebted to 72andSunny’s early devotion to not altering Powers at all. Early comments show that viewers were confused. Was this an ad for Tubes? Or was it a preview for the next season of Eastbound? There’s the mark of good advertising content: viewers are willing to accept it as content they would watch regularly.

What followed was a series of videos illustrating what a Kenny Powers-run K-Swiss would look like: marketing meetings, product tests, break room encounters, etc. At the same time, Footlocker locations devoted whole walls to Tubes, with QR codes that linked consumers to these videos in store. Videos ranged anywhere from 15 seconds long to five minutes long. In all, the campaign featured over 100 videos, including some advertising K-Swiss Power cologne as well. In all, the campaign captured over 5.5 million views.

Did it work? That is, did it change consumers’ perceptions of K-Swiss and save the company? Despite the brilliance of the campaign, its hilarity and pure entertainment value, not quite. There were some major obstacles to overcome. The first is that the product, despite the marketing for it, did not quite hold up to the brilliant marketing. For K-Swiss to eclipse rival Nike in the minds of consumers, it needed a mind-blowingly new product. The Tubes were not that product, nor was the offensive Power cologne (it’s no longer available), which Powers also campaigned for. Initial results were positive, with K-Swiss stock bumping up from a June low of $9.50 to $12 in early August. But K-Swiss took a hit with the rest of the market in mid-August, and couldn’t regain its footing. The company’s inability to produce product that excited consumers – despite a massive campaign -- terrified investors, who fled. Between August and November, the market value of the company more than halved, and stocks now sit at under $3 a share.

Lessons to be gleaned:
  1. Good Marketing can’t save mediocre product: We know that of course. But nothing hits that home like the near-destruction of a company. Brands can’t be altered with marketing without a decisive shift in direction of operations.
  2. Produce purely entertaining content, true to the character of your partners, and consumers will watch: As we work to further integrate entertainment marketing into viewer experiences, this lesson is invaluable.
  3. Pay attention to trends early on: Otherwise you may not be able to react to them later. 
Caleb Melby is an undergraduate student at Northwestern's Medill School. He'd very much appreciate it if you'd check out his new book, The Zen of Steve Jobs, now available for pre-order on Amazon. 

    1 comment:

    1. Good article but you didn't establish your expertise and reason for making your writing this blog. Would have loved to have seen that at the opening.

      Next, I would prefer a title without the profanity. While it is relevant, you need to show sensitivity to a reader who finds that offensive. I would just do a title.

      Finally, why so few labels. Labels are what people use to find your article. I would recommend ALWAYS having labels for your school [Northwestern, Medill, IMC], labels for marketers [social marketing, social monitoring, marketing, advertising, etc.] and then labels for the article [like those you have]. More labels increases the potential visability of your article.

      Nice effort