Cause Marketing Part 1: Nike Kaepernick Case StudyOctober 15, 2018
In the wake of the controversy surrounding Nike’s ad campaign featuring NFL star Colin Kaepernick, we have to ask when is it appropriate for brands to engage in cause marketing, and which issues merit campaigns?
We’re tackling this complex issue in a two-part blog series. First, we’ll examine the impact of Nike’s Kaepernick ad as a mini-case study in part 1, then we will address how and when companies should consider cause marketing in part 2.
Two years ago, NFL star Colin Kaepernick kneeled during the national anthem ago to protest police brutality and racism. Five months after he started his protest, he was no longer on the San Francisco 49ers and was a free agent.
Nike launched an ad featuring Kaepernick on Twitter on Labor Day weekend. The ad said, “Believe in something. Even if it means sacrificing everything.” The controversial ad was launched during Nike’s 30th anniversary.
Public opinion was divided over the ad. Some supported Nike’s stance while others recorded videos of themselves burning Nike’s shoes #BurnNike and #BoycottNike were among the trending hashtags on Twitter.
Explosive Media Coverage
Nike generated $43 million worth of media exposure in the initial 24 hours following the campaign’s launch. Multiple media outlets found angles to report on, including Kaepernick’s relationship with Nike and showing the public outcry against Nike.
This type of media exposure is called earned media. When a company wants public attention, they have three types of media to leverage: owned, paid and earned media. Owned media is all the material that the company puts out via its own channels, such as the contents of its website. Paid media costs money. Nike’s Kaepernick ad is paid media. Both of these media types require resources, including spending advertising dollars and using company resources to create owned media.
The Twitter mentions and media coverage are earned media. While this type of media can be excellent for a company because it doesn’t require additional spending, it can be risky because the company doesn’t have control of the messaging. It can also be hard to secure, unlike owned and paid media coverage.
While the old axiom that all publicity is good publicity isn’t quite accurate, this level of excessive media coverage and public controversy isn’t bad. Earned media helps a company increase awareness of a company, expand its credibility, expand its reach and impart value.
Controversy Attracts Younger Generations
Nike and the Kaepernick ad campaign blew up on Twitter. Nike’s brand mentions increased 135% with over 2 million mentions. The ad is attempting to capitalize on a controversial issue—71% of Trump voters say they are less likely to buy from a company that supports kneeling during the national anthem. 37% of Millennials favor companies that supported kneeling during the national anthem while 34% of Millennials do not favor kneeling during the national anthem.
53% of Millennials pay attention to the ethical and political matters relating to companies that they purchase goods or services from. 80% of teens support Black Lives Matter movement. Millennials have $200 billion in buying power and Gen Z has $143 billion in direct buying power.
Nike released the Nike Dream Crazy ad featuring Kaepernick on YouTube, which has over 2.6 million views. It is worth noting that Nike launched these ads on social media, not on traditional channels, which suggests that they are targeting younger generations (Millennials and Gen Z).
This ad played well to these generations. Advertising analytics company Ace Metrix says that the Nike Kaepernick ad is “less polarizing than social media suggests.” Just 13% of consumers reported that they were less likely to buy from Nike after viewing the Dream Crazy Kaepernick ad. This dropped to 10% among Millennials and 6% to Gen Z.
Fallout from the Ad
Nike sales grew 31% from the Sunday of Labor Day weekend through Tuesday, Sept. 4. By comparison, there was a 17% increase during this same time period in 2017.
But this came at a cost. Nike’s shares decreased 3% after the market opened the day after Labor Day; however, stock increased 2.2% two weeks after the ad debuted and has recovered 93% of the losses it initially incurred.
Our Take on this Case Study
Nike created quite an impact with its controversial ad. Although risky, it was rather effective in eliciting responses.
The Nike Kaepernick ad will ramp up fervent brand loyalty among those consumers with whom the kneeling protest resonates. Using Kaepernick in this ad was a masterclass in selecting the most poignant face of a cause for maximum impact. It is likely that Nike strategically selected Kaepernick as the face of this campaign, knowing most Millennials and Gen Z-ers would not react as negatively to the political movement he associated himself with.
Did Nike intentionally use a highly disputed topic in the hopes of generating such an impact? If so, it was likely a calculated risk knowing that they would take a hit but bounce back. As of January 2018, Nike was worth $15.9 billion. They could afford to take a hit.
This controversial ad campaign seems to be working well for Nike. Should companies take a page out of Nike’s playbook and try cause marketing? We will explore this in part 2 of this blog series.