Nike has become synonymous with celebrity endorsements and sponsorships. Bloomberg Business Week noted that as of 2012, the retailer spent 13.5 percent of total company revenue on these marketing efforts. The Beaverton, Oregon-based company has partnerships with many of the most talented and famous athletes in the world.

Increase Credibility

A seemingly endless stream of celebrity endorsements makes Nike advertisements appear more credible consumers, as people tend to listen to testimonials from superstars like Michael Jordan, Lebron James and Tiger Woods better than those from unknown actors. For example, Nike recently celebrated the anniversary of their famous “Just Do It” tagline with an advertisement featuring a voiceover by movie star Bradley Cooper and cameos from a variety of famous athletes, which gained more than four million views during the first week it was online.

Boost Brand Image

Endorsing celebrities to use Nike products and wear the brand’s clothing helps to enhance the brand image. When top athletes are seen wearing Nike clothing, their fans want to wear it too. Associations with top athletes like Roger Federer, Michael Jordan, Carmello Anthony and Cristiano Ronaldo allow the company to enjoy a high level of prestige.

Increase Sales

Nike sponsorships allow the company to showcase product attributes on a platform that promises to draw attention to the brand. For example, the company currently has a five-year $1.1 billion sponsorship deal with the NFL to outfit players on all teams, helping to expand their market share and cement their position as global leader in the sports apparel market. The Marketing Science Institute published a study noting the Nike golf ball division increased profits by $103 million from 2000 to 2010, due to the company’s endorsement deal with Tiger Woods. In fact, Nike was able to recover 57 percent of its $181 investment in Woods solely through U.S. golf ball sales.

Personalize Brand Impact

In addition to celebrity endorsements and sponsorships, Nike also backs local organizations to personalize the brand. The company does not sponsor individual sports teams, but they donate products to nonprofit organizations and non-governmental organizations across the world. This allows them to make an impact in local communities, forming a solid relationship with consumers, increasing the likelihood they’ll choose Nike the next time they make a buying decision.