Nike’s Media Ambition Leads To Russell Wilson Securing A Startup Bag
By CultureBanx Team
Nike acquired Russell Wilson’s TraceMe platform
TraceMe was valued at $60M in 2017
Nike (NKE +0.12%) is all in with NFL star Russell Wilson, thanks to its recent acquisition of his startup TraceMe, an app that let fans engage with athletes and celebrities. Brands like Nike are constantly looking for digital media options that are low on ad fraud and brand safety issues. Does the TraceMe purchase signal that a stronger digital media presence is indeed something the company has its ambitious media venture eyes set on?
Why This Matters: Nike has been building up an arsenal to create its own digital media platform and Wilson’s company is the latest piece. TraceMe was valued at $60 million in 2017 and pivoted to a new service called Tally, that helps fans engage around sporting events. Other investors of the company include Amazon (AMZN +1.60%) CEO Jeff Bezos's fund Bezos Expeditions, YouTube founder Chad Hurley, Alibaba (BABA 0+2.6%) co-founder Joe Tsai, and Madrona Venture Group. Although Nike has confirmed the purchase, terms of the deal have not been made public.
The sporting apparel giant could potentially use TraceMe’s tech to dictate its advertising strategy, as it should be easily monetizable as a channel that would sell ads. Additionally, Nike can use the startup to explore and expand its sporting events experiences.
Companies are leaning on influencers to expand their reach and foster niche audiences. Nike has consistently leveraged the power of influencer marketing, now a $1.07 billion dollar industry, and is expected to grow into a $15 billion industry by 2022, according to Business Insider Intelligence. Through this acquisition the company could build its own media platform that doesn’t rely on these type of influencer outliers.
A source told TechCrunch that Nike was more interested in TraceMe's tech and talent rather than the Tally brand, in particular. Back in August, Nike acquired Celect, a predictive analytics firm that lets retailers optimize specific styles inventories based on hyper-local demand predictions. Both of these companies will play a pivotal role in Nike’s media strategy.
What’s Next: At this point it’s unclear how Nike will incorporate TraceMe’s existing platform. Endorsements and collaborations could get a digital media and experiential boost beyond the latest footwear, sports performance and advertising that the brand is known for.
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