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Reebok's walk on wild side draws youngsters, critics

CANTON, Mass. --The images that sell Reebok sneakers these days are edgy.

One ad depicts the devil. Another has fingerprints on what appears to be a police booking form, as rapper 50 Cent advises buyers to "take advantage of today because tomorrow is not promised."

A controversial television ad last year had 50 Cent, a former drug dealer who has rapped about being shot nine times, counting aloud the bullets that were fired at him. The rapper laughs and then looks into the camera as a voiceover asks, "Who do you plan to massacre next?" The ad was withdrawn in Great Britain.

Reebok's "I am what I am" campaign is a significant shift for the sneaker brand that first gained traction pitching subtly styled, lightweight shoes to American women who embraced the aerobics phenomenon of the 1980s.

These days, however, there's more money in selling to teenage males -- a reality not lost upon Adidas-Salomon AG, which completed a $3.8 billion buyout of Reebok International Ltd. Jan. 31 and plans to keep the Reebok brand name alive. Reebok's profits rose more than 20 percent in both 2003 and 2004, and were up 37 percent through the first nine months of last year.

Adidas must now decide whether to stick with a marketing campaign that has yielded short-term sales gains among younger consumers. But the campaign is angering activists -- although it has spurred no boycotts -- and industry analysts say it also risks alienating customers who prize sneaker performance over fashion.

"Promotion and marketing footwear, or any clothing, is not, and must not be a moneymaking tool referencing gun violence, drugs or gangs," said Liz Bishop-Goldsmith, president of Rosedale, N.Y.-based Mothers Against Guns.

Reebok, which has also featured rapper Jay-Z, has gone further than market leader Nike Inc. and other rivals in embracing hip-hop culture and youth-oriented entertainment alongside athletics.

As the aerobics craze cooled, the brand expanded into basketball, football and other sports and signed endorsers like edgy basketball star Allen Iverson. Reebok's hip-hop foray began in 2002 with the street-inspired "RbK" line, and in November the company announced it would begin producing Reebok-branded TV programs for a new Comcast Corp. on-demand hip-hop channel.

Reebok's chief marketing officer, Dennis Baldwin, said market research conducted after a late 1990s sales downturn revealed Reebok needed to retrench in response to a changing youth market.

"They weren't distinguishing between athletes and entertainers, and other things that were influencing youth culture," Baldwin said in an interview at Reebok's headquarters in Canton, 20 miles south of Boston. "So when we looked at the market, we said, 'Yeah, Allen Iverson is incredibly influential, but so is Jay-Z.'"

Reebok's "I am what I am" ads celebrate individual empowerment and overcoming adversity, Baldwin said. Alongside the bad-boy ads are some softer spots, including ads with actresses Lucy Liu and Christina Ricci.

Other Reebok endorsers have less-than-squeaky-clean pasts that might scare away other companies. 50 Cent, whose real name is Curtis Jackson, and Jay-Z have made no secret of their drug-dealing pasts or difficult upbringings. Jay-Z used his real name, Shawn Carter, for a signature line of Reeboks known as "The S. Carter Collection," which preceded 50 Cent's "G-Unit" line.

One of Reebok's newest endorsers is New York Yankees slugger Jason Giambi, who's been mentioned in court records as a client of a lab at the center of baseball's steroid scandal. Iverson -- a 10-year Reebok endorser with a current ad featuring an image of the devil -- has a record including arrests and convictions.

The Congress of Racial Racial Equality, a civil rights group, says Reebok promotes negative messages about black men.

"50 Cent was a drug dealer and proud of it," CORE spokesman Niger Innis said. "The fact that corporations are going to reward that kind of behavior is an outrage."

While there are risks in taking on such endorsers, consumers no longer demand squeaky-clean reputations, said John Quelch, a Harvard Business School professor who served 12 years on Reebok's board beginning in 1985.

"The broader public is used to this these days, and does not generally punish the brand for associating with a few such celebrities," Quelch said.

Analysts credit Reebok's marketing shift for boosting the former No. 2 U.S. sneaker and athletics apparel maker's prospects against Nike -- a competition that could become more heated now that Reebok is paired with Adidas.

Marketing has helped Reebok get some recognition among teenage male customers, a sector of the athletic footwear industry that Nike has really dominated, said John Shanley of Susquehanna Financial Group.

"They really have tried to have a very different product, and they had to do that simply because Nike is such a huge force in the marketplace," Shanley said. Nike had 36 percent of the U.S. athletic footwear market to Reebok's 12 percent in 2004, the most recent figures available, according to Sporting Goods Intelligence.

Some observers warn Reebok's shift toward a younger and more fashion-conscious demographic could alienate athletically inclined customers who value performance, Nike's traditional strength.

"You risk losing or diminishing control of your brand meaning, because these are non-sports celebrities," said Andrew Rohm, an ex-Reebok marketing employee and now an assistant business professor at Northeastern University.

Adidas will announce detailed plans in April to "sharpen the brand identities of both brands based on sports performance and lifestyle," said spokeswoman Anne Putz.

Whatever Adidas decides, it will face pressure to target a youth market with increasingly greater buying power.

"The folks that are capturing this group's attention right now are the Jay-Zs and the 50 Cents," said Jim Andrews, a vice president at marketing research firm IEG Inc. "It would be foolish for Reebok or any marketer to ignore that."


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