Question

Decision

Do you believe that Nike should use marketing dollars to advance social issues?

Given the negative backlash to the Kaepernick advertisement, what should Nike do now?

Has Nike Gone too Far

The Colin Kaepernick Advertisement

During the opening weekend of the 2018 National Football League (NFL) season, Nike introduced an ad campaign featuring former NFL quarterback Colin Kaepernick. This ad appeared two years after Kaepernick knelt as the US national anthem was played before his team’s games. In Nike’s ad, Kaepernick stated, “Believe in something. Even if it means sacrificing everything,” as an explicit reference to the fact that Kaepernick was no longer playing in the NFL the season after his protest. The ad created a contentious reaction from viewers. Some consumers even posted videos burning Nike gear or cutting Nike’s swoosh (a well-known Nike symbol) off their shoes. Even President Trump tweeted, “Nike is getting absolutely killed with anger and boycotts” (Bieler, 2018). In the midst of the controversy, Nike’s long-running successful advertising campaign “Just Do It” even seemed in jeopardy.

Nike History

Nike was founded as Blue Ribbon Sports in 1964 by a University of Oregon track athlete and his coach to distribute a Japanese shoe. By 1971, the company was manufacturing its own running shoe. The name changed to Nike in 1973 – the same year a design student received $35 for creating the ‘swoosh logo’ and Nike signed its first athlete endorser, tennis player Ilie Nastase. Over the decades, Nike made numerous innovations to its shoes such as air bags and computer chips in the soles. By 2017, Nike, with a 2.8% market share, was the largest supplier and manufacturer of athletic shoes and apparel in the world with North American revenues over $15 billion (Statista, 2018).

Nike’s Socially Relevant Advertising

Nike had long developed advertisements with a social message. When the ‘Just Do It’ campaign first launched in 1988, it featured an 80 year athlete who ran approximately 62,000 miles throughout his lifetime. A year later Nike’s ads featured a Paralympian to advocate for people with disabilities. In 1995, Nike ads featured an HIV-positive runner. In the same year Nike advocated for organized sports for female athletes. More recently, in 2017, Nike featured five Middle Eastern women in sports like boxing and skateboarding. These advertisements enhanced Nike’s reputation as an agent of change through sports.

Colin Kaepernick and the National Anthem

In August 2016, after refusing to stand for the US national anthem before his San Francisco 49ers team exhibition game. Afterward, Kaepernick stated "I am not going to stand up to show pride in a flag for a country that oppresses black people and people of color" (Wyche, 2016). During that game, Kaepernick was booed at every turn - when he entered the field to warm up, when he took a knee, and virtually every time the 49ers offense broke its huddle (Witz-NY Times, 2016). After the game, some fans burned their Kaepernick jerseys. Many argued that, while Kaepernick may be right to be upset by the thousands of people of color killed by police in the US, protesting the flag was not the appropriate way to create change. Others asked why he hates veterans - still others, why he hates America. Yet more people asked why he couldn’t just stick to football (Oluo, Guardian, 2016). His actions reverberated throughout the country, even making it into a presidential campaign speech when Donald Trump said, "Wouldn’t you love to see one of these NFL owners, when somebody disrespects our flag, to say, 'Get that son of bi**h off the field right now. Out. He’s fired!' (Barca, Forbes, 2018).

Reaction to Kaepernick’s kneeling, however, was not universally negative. Numerous NFL players, coaches, and owners stood behind Kaepernick’s right to kneel in protest to acts of injustice against African-Americans. Dallas sportscaster Dale Hansen wrote, "The young, black athletes are not disrespecting America or the military by taking a knee during the anthem. They are respecting the best thing about America” (Willingham CNN 2017).

Consumer Research on the Effect of the Kaepernick Advertisement

As the controversy around Nike’s 2018 ad swirled, several marketing research companies and universities examined immediate effects of the ad on Nike’s reputation:

• Morning Consult: About 24% of consumers now viewed the brand unfavorably, up from 7%. The percentage of Americans likely to purchase Nike products dropped 11% after the ad aired ( Morning Consult, 2018).
• Quinnipiac Poll: American voters 18-34 years old approved of Nike’s decision to run the ad 67% to 21% while voters over 65 disapprove 46%-39% (Quinnipiac, 2018).
• Harris Poll: 21% of the general public said they would stop buying Nike products; however, 19% said they would buy even more Nike products – including 29% of young males (Nike’s target market).
• Reuters: 72% of Americans said that they thought Kaepernick's behavior was unpatriotic. Another 61% said that they did not "support the stance Colin Kaepernick is taking and his decision not to stand during the national anthem” (Martis, 2018).

In the face of these opinion polling numbers however, sales appeared to be increasing rather than decreasing:

• Nike’s online sales initially jumped 31% (Martinez, Time, 2018)
• the number of products sold out in the 10 days before the ad came out, compared to the ten days after (September 3-13), increased by 61%
• the number of items sold out went from 703 for the 10 days prior to 1131 for the 10 days after the ad went public” (Martis, 2018)

Decision

Do you believe that Nike should use marketing dollars to advance social issues?

Given the negative backlash to the Kaepernick advertisement, what should Nike do now?

Answer 1

Do you believe that Nike should use marketing dollars to advance social issues?

Let us consider the historic data. Nike has always been vocal towards social issues. The case itself mentions certain examples, like the one with casting a HIV patient in 1995. Even now HIV positive people are not accepted by the society and are exempted from the society. But more than 20 years ago Nike showed the way to inclusion of this marginalized community. The constant advancement of inclusion in their advertisement is visible throughout the history. In the past decade Nike’s advertisements featured people of colour, transgenders, athletes wearing burqa etc. So, as an organization which always stood against unjust social norms it is important for them to remain at the helm of social changes. And what is a better way for it than through advertisement. Advertisements are not only a medium to promote the products of a company. It is also a channel to show the values of an organization. The stronger the value the more impact it generates in the viewer. A good advertisement, socially responsible one, will help create a strong image of the company among its customers. That is why I think it is essential that Nike should use its marketing dollars to advance social issues.

Given the negative backlash to the Kaepernick advertisement, what should Nike do now?

It is true that the Kaepernick advertisement was met with backlash and as an organization Nike should consider two aspects to decide on further actions.

First one is completely from business point and involves how the advertisement affected the revenue and sales of the company. The surveys conducted by multiple organizations shows that a majority of people when taken as a general public disliked the advertisement and are not likely to buy Nike products. But some more detailed surveys show that people between the age of 18-34 are in support with Nike’s decision. And 29% of young males said that they would buy more of Nike’s products. It is to be noticed that these are Nike’s target market. Despite of all the surveys, Nike’s sales showed an increase in the 10 days after the ad was aired than before. And its online sales increased by 31%. So, considering this it is safe to assume that, even though there is a negative publicity going on around against the company, it did not affect its sales negatively, instead the very opposite happened. So, it is better that Nike should not do anything regarding the advertisement now.

Second one is from the ethical and branding point of view. Let’s start with ethical point of view. We have mentioned in the above answer that Nike has always been an initiator when it came to representation of social issues through their advertisements. Nike as an organization believed that the actions of Kaepernick is justifiable. They might have had a number of discussions within the organization whether to go forward with the advertisement before its airing. And the response they received from the general audience might be what they expected. As an organization it is important that they go by their values and ethics. That means they should stand their ground and fight for what they think is right. Now when it comes to the branding point of view, its difficult to stop the transfer of information. Since the advertisement is already aired it is impossible to undo it. But if Nike withdraws the ad it will affect its image of being a bold organization. Sometimes it is better to not give in to external political pressures in order to maintain your brand equity. And also, the increased sales shows that the ad attracted more customers and thereby can assume that its brand image has improved. And also, the consumers are becoming more and more socially responsible and want companies to behave the same. So, backing off from its value of standing with the right will adversely affect the firm. So, it is better to not do anything now.