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The Ripple Effects of Nike's Calculated Risk

– by Caleb Foreman

Controversy. Praise. Vitriol. Adulation.

Nike’s latest anniversary ad campaign contained all the ingredients necessary to pique the attention of a nation where social debate and polarizing opinions have become the daily fare of talking heads and social feeds.

Was this a courageous example of a brand taking an authentic stance on social injustice, or a clever ploy just to generate profits?

Would Nike bask in the afterglow; reaching new audiences, creating new customers while increasing their life time value in the process? Or would the brand get singed from a pyre of burning Jordan’s?

A few weeks removed, it’s a little too early to tell the long-term ramifications. But as we emerge from the bomb shelter and take a look back at both the social and financial short-term impact, perhaps the hazy outline of longer implications will begin to emerge.

The Announcement: Nike chooses Colin Kaepernick as Brand Ambassador

The shoe/apparel giant made shockwaves in early September announcing that polarizing ex-athlete turned social activist would be the face of it’s 30th “Just Do It” campaign.

Kaepernick, a lightning rod due to his protest of the National Anthem and police brutality, had maintained a relationship with the brand since the controversy first sparked—albeit one that had seemingly grown dormant in past months. A prominent image featured a black and white portrait of the Kaepernick above the phrase “Believe in something, even if it means sacrificing everything.”

Immediately, both sides converge on the battlefields of social media, armed with posts and brandishing “likes,” ready for war. Volume skyrockets, the current of polarizing opinions gradually pulls more passive voices into the fray. Hashtag’s #Nike and #JustDoIT vs. #nikeboycott and #boycottnike serving as points on the scoreboard of public opinion. At the end of the day, mentions would number over 2.7MM.

Polarizing takes are lobbed from influencers on both sides of the fence with celebrities and politicians stoking the fires on each side.

Serena Williams – Future Tennis HOFer– “Especially proud to be a part of the Nike family today. #justdoit”
Donald Trump – President of the United States “Just like the NFL, whose ratings have gone WAY DOWN, Nike is getting absolutely killed with anger and boycotts”

Overall, sentiment was slightly negative at 14 percent, a lift of 7 percent over positive expressions at 7 percent.  A vast majority, though, seemingly remaining on the sidelines.

At the first sign of gathering storm clouds, investors fearing the worst, started heading for cover. Nike’s stock starts dropping, finally landing with a thud at $79.60— a 3.6 percent drop from opening the morning at 82.29.

The boat started to take on water.

Would Nike go down in the storm? Or would the brand survive the tempest, emerging on the other side carrying the momentum of full sails?

 

A Week In: The Winds Die Down

Sometimes the hottest fires burn out the quickest. The fickle winds of public attention shifts direction, their gaze held by another controversy or hot button topic. The remembrance of the events in 2001 also served to dampen the flames as the nation paused to reflect.

As the social conversation started to wane, online sales started to surge, reportedly increasing nearly 31 percent. Nike’s stock started to climb. Judging the temperature safe, investors started to dip there toes back into the tub. That initial rebound fueled more interest, fueling a climb that wouldn’t stop until it hit $83.57, an all time high for the brand.

Initial estimates valued the media coverage and resulting media exposure in the neighborhood of 163 million dollars.

Two Weeks Removed: A Look Back

The volume and overall sentimentality on social media returned to levels seen pre-announcement. Nike’s stock had continued to climb, reaching an apex of $85.26 before settling down to $82.50. Market consultants release bullish forecasts for the brand in anticipation of the brands quarterly report.

 

Looking Forward

This is not the first time Nike has created waves across social conversation. Lest we forget, Charles Barkley’s scowling growl telling us he’s not a role model, or the Voices film that turned the spotlight on women’s barriers and contributions to athletics. Granted, it didn’t reached the apex of social commentary in a way this did, but it does remind us that Nike is no stranger to stirring the pot.

Nike’s approach to bucking the reins of convention and creating attention and buzz for the brand has been called both courageous and corporate capitalism but there is another C word that must be mentioned in the same breath: calculated.

What makes them successful is the ability to identify their audience and speak in an authentic way to their target demographics. Nike took a measured gamble; leveraging the attitudes, beliefs and long term earning potential of their younger customer base against the net loss felt from potential defectors. The financial and social media reflections were reactionary as expected, but once the adrenaline wore off, generally stabilized, although now carrying a new upward trajectory.

What will unfold in the acts to come?

Nike is betting that the 170,000 new followers on Instagram, 26MM plus YouTube viewers of the “Dream Crazy” ad, and their expanding social and economic influence will create a new generation of loyal customers and brand advocates.

As for now, I wouldn’t bet against it.