Controversy a victory for Nike’s admen
Will the company’s decision to strike an overtly political stance pay off in the long term, asks David Millward
If there is no such thing as bad publicity, then the marketing team at Nike will be hoping for a generous bonus for its efforts over the past few months. With almost impeccable timing, the company managed to select two of the most controversial figures in American sport – Colin Kaepernick and Serena Williams – to spearhead its latest advertising campaign.
At a stroke, Nike has restored its reputation as a cool brand. As its goods flew off the shelves, the company shifted the agenda away from the rather more awkward issue of its treatment of women that hit the headlines earlier this year.
Ms Williams’s meltdown at the US Open has kept Nike’s distinctive swoosh in the public eye, along with the furore surrounding its decision to make Kaepernick its poster boy at the start of the new NFL season.
Kaepernick was the originator of the protest that saw some of the NFL’S leading players kneel during the national anthem before games in an attempt to draw attention to the treatment of black Americans in the US by some police forces. It was a gesture that enraged Donald Trump, who has repeatedly voiced his fury on Twitter, calling for the protesting players to be suspended without pay. At one point, he even suggested that they should not be in the country.
The president’s supporters demonstrated their distaste at the “unpatriotic” millionaires by burning their Nike trainers or cutting up their socks. The company’s call centre was inundated with angry phone calls.
In Louisiana, Kenner mayor Ben Zahn proposed banning the city’s sporting clubs from buying Nike. In Missouri, The College of the Ozarks, a private Christian college, said its teams would no longer wear the company’s kit.
But while the Trump base wants no part of Nike, other Americans appear to have voted with their wallets with sales surging by 31pc over the Labor Day weekend, according to market analyst firm Edison Trends.
Not surprisingly its shares bounced back, regaining the $3.3bn (£2.5bn) lost in the wake of the airing of the ad. One Twitter user probably hit the nail on the head, tweeting: “Nike was thinking: ‘More people loathe Donald J Trump than Kap.’ And they’ve made the correct choice.”
The Nike campaign oozed street cred. Kaepernick was hailed as “one of the most inspirational athletes of this generation”.
It was a pitch that resonated with younger consumers and especially those in America’s cities. Colin Kaepernick is the latest black sporting celebrity to front a Nike campaign, following in the footsteps of Michael Jordan and Tiger Woods. “There is a reputational risk,” says Stephen Greyser, professor of marketing and communications at Harvard Business School.
“Many people see Kaepernick as a negative factor. People who enjoy the NFL are going to ask why Nike is doing this. The idea that they should stand by Kaepernick is not so bizarre; they have a reputation for standing by their endorsees such as Tiger Woods. Showing that they stand up for what they believe in will be seen as a statement from Nike, rather than Kaepernick.”
John Quelch, dean of the Miami Business School, sees the deal as a shrewd piece of marketing.
“Market-share leaders always run the risk of gradually becoming all things to all people. When this happens, the fun, the edginess drains out of the brand,” he says. “View the Kaepernick ads as a shot of brand adrenalin that’s reaffirming Nike’s support for underdogs and delivering tremendous free publicity just as kids are buying back-to-school sneakers.
“You may support or reject Kaepernick’s peaceful protest, but there are plenty of good business reasons for Nike to feature him in its advertising.”
Quelch’s view is widely shared by marketing experts.
Patrick Rishe, director of the sports business programme at Washington University in St Louis, believes it was shrewd marketing by the Oregonbased company.
“I am very much on the side of those who think that the reward outweighs the risk,” he says. “I don’t think they are worried about losing a few customers.
“Nike knows its demographic. If its demographic was over 50 and conservative, it would never have got into a relationship with Kaepernick.
“Its demographic is middle-income or higherincome and collegeeducated.
“These people who belong to this group lean towards the side of supporting the principles of freedom of expression.”
Mike Gallinari, a research analyst at Mintel, was not surprised by Nike choosing Kaepernick as its public face.
“Our research shows that more people are willing to support a brand promoting a stance they agree with than boycott a company that doesn’t align with their beliefs. This trend is amplified by people 35 and under. Nike is very into research analytics. I don’t think this is something they would have rushed into, given the potential flashpoint of endorsing Kaepernick.”
But the hip publicity campaign comes after an awkward period for Nike during which complaints of a macho workplace culture put the company at odds with the #Metoo movement.
Cynics might suggest that the brouhaha over Kaepernick has helped Nike divert attention away from some embarrassing problems with claims that a “frat-boy” culture was rife and that women were underpaid.
In March, Mark Parker, the company’s chief executive, issued a memo to the company’s staff. He disclosed that senior management had become aware “of behaviour occurring within our organisation that does not reflect our core values of inclusivity, respect, and empowerment”.
Announcing a review of the company’s HR practices, he added: “We will increase and invest more heavily in our diversity and inclusion teams and networks, and additionally will immediately put in place an enhanced process to encourage our employees to speak up and make their voices heard.”
At the same time, he announced that Trevor Edwards, the brand president and the man tipped as Parker’s “heir apparent”, would be retiring later in the year.
There were no direct complaints about Edwards, but he was the first of a number of senior figures to leave over the summer as the company launched a sweeping review. By May the number of top executives to quit had reached 11.
To add to Nike’s problems, four women who used to work for the company have gone to court alleging that Nike broke state and federal equal-pay laws and presided over an environment that allowed sexual harassment. The women are not seeking a payout, just a court order compelling Nike to pay staff fairly and tackle the gender pay gap.
“The numbers don’t lie. On a global scale, currently 77pc of Nike’s leadership team are men; 71pc of its vice-presidents are men, and 62pc of its directors and senior directors are men,” says Laura Salerno Owens, who is acting for the women who have brought the action.
“I’ve represented more than
50 Nike employees and their experiences have been consistent with the plaintiffs’. The more senior the job title, the smaller the percentage of women.”
Nike’s response has been to defend its belief in diversity and inclusion. “We are committed to competitive pay and benefits for our employees. The vast majority of Nike employees live by our values of dignity and respect for others,” the company says.
But clearly the risk of reputational damage remains. “The biggest issue for any company in these circumstances is taking action,” says Montieth Illingworth, chief executive of a strategic and crisis communications company in New York and London. “In many cases, companies move at a glacial pace, which is the responsibility of the board of directors and they are out of sync with what is becoming a tidal wave of public awareness.
“Nike has been advertising for decades and they have always tried to be edgy and hip, and you have to applaud them for using Kaepernick. He doesn’t have many friends out there in corporate America.
“It makes them seem as if they are more aware of social consciousness than they really are. But have they moved fast enough in changing the ‘frat-boy’ culture? If they haven’t, the company loses credibility.
“The brand has to be aligned with corporate culture. If it isn’t, the campaign is virtually meaningless.”
‘Marketshare leaders always run the risk of gradually becoming all things to all people’
‘The numbers don’t lie. On a global scale, 77pc of Nike’s leadership team are men’
Nike endorsee Serena Williams shouts at chair umpire Carlos Ramos in the women’s final against Naomi Osaka at the US Open, triggering a sexism debate in tennis over the treatment of female players
The sportswear brand has restored its ‘cool’ reputation among its key demographic by running an ad campaign with controversial American football star Colin Kaepernick, right, who started the kneeling protest during the national anthem before NFL games