Risk Management

Nike Likely to Win with Bold Kaepernick Move

Short-term hits to Nike's stock price and sales should give way to a more passionate customer base over the longer term, a top marketer says.
David McCannSeptember 6, 2018
Nike Likely to Win with Bold Kaepernick Move

As we recently pointed out, companies are growing more emboldened to take stances on social and political issues — and accept the accompanying risks — during this divisive era in American history.

The topic has, of course, exploded in the news this week, with Nike’s revelation of its new marketing partnership with former NFL quarterback Colin Kaepernick. The apparel company’s first “Just Do It” ad, narrated by Kaepernick, is scheduled to air tonight on NBC during the league’s season-opening telecast.

Given hot public sentiments for and against Kaepernick — who’s become far more famous for kneeling during the national anthem than he ever did for his in-game exploits — it was predictable that news of the marketing campaign would trigger both hearty applause and calls for a boycott of the company.

To be sure, it’s a brash, risky bet by the owner of one of the world’s most recognizable brands. (And it’s all the more eye-opening, considering that Nike supplies apparel for the NFL’s 32 teams under a contract that runs through 2028. League officials are reportedly steaming with anger at Nike.)

“You’ll see increased intent to buy [Nike products] from people who agree with Kaepernick, while the other side will be burning Nike shoes and cutting the swooshes out of their socks,” says Peter Horst, a longtime chief marketing officer for multiple large companies. “How those two forces will net out remains to be seen.”

Colin Kaepernick

In the short term, Nike appears to be taking a hit. On Tuesday, the first day of trading following the announcement of the ad campaign, Nike stock dropped by more than 3%. It’s recovered only modestly since then. President Trump mocked the company on Wednesday, tweeting that it’s “getting absolutely killed.”

Sales are also likely to dip for a short while, Horst speculates. Yet, the odds are good that the gambit will work out well for Nike in the long run, according to Horst, author of the new book, “Marketing in the #FakeNews Era.”

“There’s a general truth in managing brands that this [Nike campaign] points out in a rather extreme way,” he says. “That is, it can be far less effective to be generally, blandly appealing to all and offensive to none. If you get the formula right, you can have a more vibrant, enduring brand with more passionate followers.”

Indeed, just as the president caters to his base, Nike is catering to its own. The company’s target audience and actual customers are overall younger and more diverse than the anti-Kaepernick crowd, which is generally older and preponderantly Caucasian.

“All the research says that generations Y and Z want to engage with brands whose values match theirs,” notes Horst. “Nike didn’t just stumble into this without thinking about it. I’m sure they looked at not only who their customers are, but also at what the demographic trends are, and decided this was a risk worth taking.”

There was already a branding trend toward companies taking positions on socially or politically sensitive issues. But the stature of Nike’s brand, together with the high-profile nature of the kneeling controversy (and the charges of police brutality toward African-Americans that triggered it), could work to accelerate the trend.

“The public is looking to corporate America to help solve social problems that the government doesn’t seem able to take on,” Horst observes. “I think examples of companies like Nike taking very particular strong stances on controversial issues will embolden others to take similar actions.”

Photo: Wikimedia Commons