Nike Tackles Public Opinion
Founded in 1964 and currently ranked number 85 on the list of Fortune 500 companies, Nike is certainly a well-established and successful sportswear brand. The graph below shows Nike’s 2020 worldwide revenue by region. Clearly they are extremely popular around the world, especially in North America.
Background
In addition to being known for their activewear, Nike has a reputation for incorporating statements on social justice movements in their ad campaigns. As early as 1988, Nike tackled the issue of ageism by featuring an 80-year-old runner in their ‘Just Do It’ commercial.
Other controversial Nike campaigns include a 1995 commercial featuring an openly gay, HIV positive runner, multiple campaigns addressing gender issues in sports over the years, including one in 2017 featuring Middle Eastern women. A 2017 campaign that featured world-famous athletes LeBron James, Serena Williams, Gabby Douglas, and Kevin Durant also addressed racial equality.
Nike often releases these advertisements without any additional statements, leaving the commercials to speak for themselves. Their marketing philosophy appears to be connecting with their ideal consumers through emotional campaigns.
Activists often praise Nike for their work, yet many others have disagreed with the company’s point of view. Many consumers have boycotted the company and expressed their anger over the years. Some people question Nike’s motives, and their true commitment to these causes.
As you can see in the graph below, despite Nike taking risks with their ads over the years, their stock has continued to rise overall. This graph shows that even it falls initially after one of these campaigns is released, Nike’s stock rebounds fairly quickly. Despite the advertisement’s controversial nature, especially for that time period, Nike’s stock continued to gradually rise after the release of their commercial with Ric Munoz in 1995.
A similar thing happened after all of Nike’s controversial campaigns. Many critics threaten to boycott Nike after they release these advertisements, however Nike’s financial success continues to grow. This can partially be attributed to the fact that Nike has a history of successfully running these types of advertisements, and so shareholders can assume they will have success in the future.
Despite Nike’s stock prices staying steady and experiencing growth, the public reaction to these ads is often mixed. Nike’s 2017 ad focused on empowering Middle Eastern women was met with mixed reactions, with some people claiming the ad was a “fail”. However, Nike’s ads get people talking. Within 48 hours this advertisement was shared 75,000 times on Twitter and viewed almost 400,000 times on YouTube. This buzz is why Nike continues to push against public opinion in their advertisements.
Nike’s Controversial Partnership with Colin Kaepernick
In 2018, social media exploded when Nike released a commercial, featuring former football player, Colin Kaepernick. Kaepernick has been a subject of controversy due to his decision to publicly kneel during the national anthem in order to protest police brutality against Black Americans. Many people believe he is bringing awareness to an important issue while many others find his actions deeply offensive to the USA and especially veterans.
Kaepernick has not played in the NFL since 2016, which was the season he began kneeling. He was playing for the 49ers and they informed him he would be released from their team. Kaepernick chose to become a free agent but was not picked up by any teams.Even though Kaepernick had not played professional football for two years, Nike still decided to partner with him in 2018. At this point, Kaepernick was well-known as a political activist for racial equality.
The full Nike ad featuring Kaepernick can be found here.
This infographic examines the immediate impact of Nike releasing the advertisement featuring Kaepernick. The advertisement immediately received a lot of buzz on social media. Twitter users began posting videos and photos of them burning their Nike products. Angry consumers called for a boycott of Nike’s products and initially Nike lost about $3.75 billion in market capitalization. However, as illustrated in the graph above, their stock price soon recovered.
Other athletes and celebrities such as Serena Williams and Lebron James publicly supported Kaepernick’s Nike ad. This added to the online buzz surrounding the ad. The NFL also released a statement saying, “social justice issues that Colin and other professional athletes have raised deserve our attention and action.”
Supporting Kaepernick was a big gamble for Nike and they lost some customers along the way. Overall, the gamble seems to have paid off as Nike’s stock has continued to grow along with their sales revenue. Nike founder Phil Knight pointed out, “It doesn’t matter how many people hate your brand as long as enough people love it.” Clearly, this philosophy is working for Nike.
Nike has clearly identified their ideal audience as 65% of Nike customers appreciate when a brand takes a stance on a social issue. This is 20% higher than the 45% of general consumers in the United States who believe brands should take a stance.
From a financial aspect, Nike benefited greatly from the campaign, claiming $163 million in earned media, a 31% boost in sales and a $6 billion increase in brand value a year later. Much of this can be attributed to the media exposure that Nike earned as a result of this ad.
Kaepernick himself was not very popular in the United States at the time of this ad being released with only 34% of adults reporting positive feelings towards him and 31% actually reporting negative feelings towards Kaepernick. His actions generated a lot of controversy and played a big role in making racial issues part of our nation’s public discourse.
Some critics have pointed out that Nike has not worked with Kaepernick much after this initial ad, leading to claims of performative activism. Kaepernick himself has been continuing to advocate for racial equality, while waiting for an NFL team to offer him another opportunity to play football.
Nike is an interesting brand to study because currently many brands are feeling the pressure to take a stance on societal issues. However, some are nervous to do so because of the impact they are worried it will have on their customer base. The fact that Nike is able to successfully support social causes, and still grow in sales is a good sign for other companies interested in doing the same.
