Regan: Corporate Activism

You can't call foul on Nike for a game they aren't even playing.

by Joseph Coit Regan | 9/13/18 2:15am

A recent Nike advertising campaign is the latest controversy in our prevailing culture of “like or dislike.” The first ad posted on Sep.3 is a black-and-white photo of a solemn Colin Kaepernick overlaid with the words, “Believe in something. Even if it means sacrificing everything.” This is a powerful statement for what it signifies about corporations and activism in America, as well as what his words say and mean to you.

Nike is a corporation which intends to generate revenue and increase its share price by using a social justice activist who, by virtue of being given a platform by a global consumer products titan, will empower his own cause. Those protesting the campaign on social media often post about burning Nike shoes, or post pictures depicting Nike products shorn of the swoosh logo. Proponents of the campaign criticize these posts for a lack of recognition that destroying or mutilating a product that has already been purchased is an ineffective and foolhardy means of protest. In terms of the physical drivers of revenue for Nike, this is true; in terms of the intangible drivers of revenue for Nike, such as brand recognition, goodwill and trust, this is a more complicated issue.

The intangible factors that affect Nike’s share price and gross revenue are most easily understood by the word “brand.” Put simply, brand is what causes consumers to purchase products with the same purposes at vastly different price points. Consider that Converse sells shoes for $55 and Yeezy shoes sell for $1000. Without branding, this would be impossible. With good branding, however, it is possible, and improper maintenance of a company’s brand will slowly unravel the magic that allows a company in a market as competitive as that of footwear to thrive.

Converse is a good example of a company that had good branding, lost it, and regained it. In their beginnings, Converse were worn by athletes as famous as Larry Bird and Magic Johnson. At the time, they were a successful, independent company. Yet an inability to innovate with the competition led to Converse filing for bankruptcy in 2001. Then, in 2003, after being kept afloat by private investors, they were acquired by Nike for $309 million. In 2017, Nike’s annual 10-K reported gross revenue of $2.04 billion for Converse. Nike reinvigorated Converse by cleverly marketing the shoes to a younger audience, and by leveraging their impressive array of global assets to sell Converse to a larger and more diverse market of consumers. Now Colin Kaepernick’s message is being used to do both these same actions at once.

Leveraging size is easy to understand, but what is remarkable about the story of Converse is how it explains the intention behind the Kaepernick ad, and for what it reveals to be new about this ad. The reason for Nike’s success with Converse was that they tapped into the interests of the 30 and younger market. This market cares about having its voice heard. According to the 2018 World Economic Forum Annual Meeting, this age group comprises 50 percent of the global population. More integral to the success of Converse and the intended success of Nike’s new marketing campaign is that 55.9 percent of this group responded to a survey by saying that, “In my country, young people’s views are considered before important decisions are taken.” In the past, Converse achieved 29 percent year-over-year revenue growth in 2008 by marketing associating their shoes with counter-cultural icons whom Forbes magazine described as, “musicians, artists, and other ‘cool’ celebrities.” This is a tried and true strategy, but Kaepernick is different for his direct activism. He is not just a celebrity for his talents on the field, he is famous or infamous, depending on who you ask, for the movement that grew out of the moment on Sep. 1, 2016, when he took a knee at the final preseason game of the ‘49ers to protest police violence against African-Americans.

Nike is doubling down on the 30-and-younger age bracket that, as of 2018, wants not only to be considered in decision-making, but to cause decisions to be made. The success or failure of this campaign will foreshadow whether or not other massive corporations will take the bold step of supporting an activist, rather than supporting popular figures who speak about causes without directly participating in them. The issue is further complicated by the fact that Nike has been tied to sweatshops, and in 2017, received a “C” rating from the Ethical Fashion Report. In the short-term, the success of this campaign could cause activists of the same cause as Colin Kaepernick, or similar social justice causes, to become a part of corporate marketing strategies. In the long-term, this could presage corporations who are willing to incur the costs of bettering working conditions in factories in order to signal to the 30 and younger age bracket that they are speaking with their pocketbook as much as with their brand torchbearers, as they are now speaking volumes by their choice of Colin Kaepernick for this most recent ad campaign.

There is a question to be raised about how legitimate it is for a corporation to support an activist, considering that their motives, by the nature of their business, are not rooted in the values that spur on activists. However, the Supreme Court decisions rendered in Citizens United v. the Federal Election Commission is one way of saying that corporations speak with dollars far more loudly than they speak with spokespeople or official statements. Nike has spoken by investing heavily in Colin Kaepernick and the ad campaign. Whether or not one is against the specifics of the rollout of the campaign, it is important to consider the possibilities of its success for further improvement of living conditions for human beings.

If you find yourself, like the wife of ‘American Sniper’ Chris Kyle, perceiving the ad’s wording offensive to the heroes who have given everything for their country, you might want to consider the country they gave everything for, and what that country stands for on the global stage. Sometimes, the details are less important than the overall effect, and the Colin Kaepernick ad is one of these cases. So speak with your wallets, as you should with your voice, when you perceive injustice or are made aware of it from someone else. This does not mean you need to buy Nike products, but it does mean that Nike’s success, right now, benefits more than just Nike.