On September 3rd, Nike began one of the most notorious advertising campaigns in recent memory when they revealed Colin Kaepernick as the face of their 30th anniversary “Just Do It” slogan. Many customers responded by burning their Nike apparel, while others endorsed—even applauded—the company for their allegiance
To understand what drove Nike to do this campaign – the attention, polarization, and perception – I decided to experiment with a divisive campaign of my own by using three articles on Facebook:
I utilized three ads with the same words except for the introduction. The first was a Liberal article starting with “Colin Kaepernick is my Hero!...”, using a Control article that says, “See Why Guns are on My Mind!”. The conservative article originally started with, “Police Brutality is Fake News!...”, but was flagged by Facebook as, “related to politics or issues of national importance”. It was later replaced by another equally-conservative article starting with “Colin Kaepernick Needs to Grow Up!...”.
The ads then linked to half-written articles that, upon first-glance, were very polarizing. Each article ends by explaining that my personal views have not been conveyed, but that each ad’s performance would be tracked and used for this month’s newsletter.
While I wanted to mirror the same point of contention, or rather polarization, as Nike, namely Colin Kaepernick, I also wanted to steer the subject back to finance. I chose stocks that manufacture or sell guns as my financial advice piece, but kept the demographics for the ad fluid. I chose to market all three ads to anyone in Michigan ages 24-64.
What happened next was predictable, yet hard to endure. Unlike Nike, my polarizing ads went out to all ends of the spectrum, and unlike Nike, I did not stand behind what the ads were saying, nor did I want to defend a position publicly. This led to a lot of anger and some organic sharing. People commented saying, “You can take this white power s**t and shove it up your ***” and, “Another li**ard do**he shoveling BUL***IT”.
At this critical juncture, I would like to to apologize to any of you who may have come across the title without time to read the article and subsequently suffered offense by it. For me, the final straw was after my article was shared with “No matter what is said, he will forever be a racist POS”… it was then that I felt the campaign needed to end. With that, I have crunched the numbers resulting from this short campaign.
What did the numbers say? Well, the test originally had a liberal, control, and conservative ad, however, only the liberal and control were initially approved by Facebook, so another split test was launched with a new conservative article and the same control. Each ad had varying amounts of time to reach its audience and generate clicks, but neither split test lasted long enough for Facebook to determine what ad was doing a better job of getting clicks for the lowest price. However, the numbers are hinting at Nike’s thought. Taking a strong position not only gets you mentioned in the newspapers, it also generates organic sharing and drives your marketing costs lower.
The first test compared the Liberal and Control Articles:
Dollars spent on Promotion
2,627 People, Liberal
2,542 People, Control
Cost Per Click
The second test compared the Conservative and Control Articles:
Dollars spent on Promotion
998 People, Conservative
2,671 People, Control
Cost Per Click
Looking at Google trends, we can see the obvious spike in attention Nike received when the campaign was released.
Originally, however, Nike’s share price took a dive upon Kaepernick’s release and even today it appears the jury is still out regarding the decision. Here*, I compare Nike and its industry benchmark, S&P 500 Ind/ Textiles & Apparel TR, from 09/01/2018 - 10/03/2018, and you’ll notice slim to marginal upside for Nike.
What does this mean? In my professional opinion, it means that while they achieved a boost from the initial attention, they may be in trouble if their previous consumers boycott them for a prolonged period. This begs the question of why they ever took a side in the first place. While my case study was small and limited, I hope Nike had greater proof of concept and can continue to bring value to their shareholders.
The performance data quoted represents past performance and does not guarantee future results. The investment return and principle value of an investment will fluctuate, thus an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein.
Disclaimer: VanderPol Investments is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.