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Nike’s controversial Kaepernick ad – good for business?

12 September 2018

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by Anchor

Nike’s controversial Colin Kaepernick 30th anniversary Just Do It ad campaign seems to be having a positive impact on Nike sales and share price. The ad campaign has seen people in the US burning their Nike sneakers and destroying their clothes. While Kaepernick was with the San Francisco 49ers in 2016, the now ex-NFL quarterback sparked the kneeling during the national anthem to protest the treatment of African-Americans in the US. Something that has drawn the ire of US President Donald Trump and his supporters.

However, according to Apex Marketing, Nike’s brand exposure on TV, radio, online and social media since first announcing the Kaepernick-led campaign is worth $163.5mn, while Scott Galloway, a professor at the NYU Stern School of Business, told CNBC that the decision to feature Kaepernick in the campaign was a stroke of brilliance. Galloway added that Nike took a calculated risk in choosing a polarising figure but noted that “two-thirds of customers under the age of 40 tend to be bias progressive” and they’re the prime users of Nike products.

On Friday, The New York Postreported that hours after the debut of the ad on Thursday night (6 September), Nike shares were trading up USc73 to $81.13, which meant that the Nike share price had regained more than half the $2.60/share decline it experienced on Tuesday (4 September) when the ad was first announced. WoW the share price is up c. 4%, closing Tuesday (11 September) at $82.63.

Despite the backlash and boycotts by some consumers, Edison Trends found that Nike’s online sales surged 31% between Sunday (2 September) and Tuesday (4 September) – more than double 2017’s 13% rise over the same period. Edison Trends data also show that product orders rose by 27% (in the same period of 2017, product orders fell 2%).

Market research from YouGov Plan and Track shows that 46% of Nike customers have a positive view of Kaepernick, vs 34% of all Americans. YouGov also found a 10-ppt increase in the number of Nike customers vs the general public who say a company should take a stand on social issues and have a “moral message.”

 

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