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Nike just does it, and rides out the row

Protesters burned their Nike shoes, investors sold shares and some consumers demanded a boycott after Nike launched an advertising campaign featuring Colin Kaepernick, the NFL quarterback who sparked a national controversy by kneeling during the US national anthem.

But the brand recognition that comes with the campaign may be just what the company wanted, and marketing experts predicted it would ultimately succeed.

The ad revived a raging debate in the US that started in 2016 when Mr Kaepernick, then with the San Francisco 49ers, began kneeling in protest at multiple police shootings of unarmed black men.

“This is right on the money for Nike. They stand for this irreverent, rebellious attitude. In this case, it’s reinforcing the brand,” said Erich Joachimsthaler, CEO of strategy consulting firm Vivaldi.

While some fans praised Mr Kaepernick and other players who joined him in kneeling, critics led by US President Donald Trump blasted the protesters as ungrateful and disrespectful. Trump supporters vowed to boycott the brand and burned sportswear over the ad campaign marking the 30th anniversary of Nike’s ‘Just Do It’ slogan.

Nike shares plunged on Monday amid the backlash, but recouped much of the fall over a volatile week to head into the weekend down only slightly.

But there are already signs the ad – and the controversy – has paid off.

Data from Robinhood, a no-fee brokerage popular among younger traders, noted 15,191 new investors adding Nike to their portfolios this week, a 45pc increase compared to a week earlier, according to tracking by ‘Business Insider’.

Mr Trump called Nike’s campaign “a terrible decision” in an interview with the ‘Daily Caller’, but he also showed some respect for Mr Kaepernick’s right to speak out.

“As much as I disagree with the Colin Kaepernick endorsement, in another way – I mean, I wouldn’t have done it. In another way, it is what this country is all about, that you have certain freedoms to do things that other people think you shouldn’t do,” he said. The NFL, which gave in to pressure from Mr Trump and ordered players not to kneel on the field during the anthem, praised Mr Kaepernick.

“The social justice issues that Colin and other professional athletes have raised deserve our attention and action,” said Jocelyn Moore, the NFL’s executive vice president of communications and public affairs.

In the immediate backlash against the campaign, announced on Monday, Nike shares fell nearly 4pc at one point on Tuesday and closed down 3.2pc.

Calls for a boycott fed social media buzz about the campaign. There were 2.7m mentions of Nike over the previous 24 hours, the social media analysis firm Talkwalker said, an increase of 135pc over the previous week.

After his protests, Mr Kaepernick could not find a job for the 2017 season and sued the National Football League, accusing owners of colluding to blackball him. He is still without a team.

Nike has sponsored Mr Kaepernick since 2011 and said he will be one of several faces for a campaign marking the 30th anniversary of ‘Just Do It’.

The ad refers to Mr Kaepernick’s loss of NFL income with the quote: “Believe in something. Even if it means sacrificing everything.”

Some who were offended by the choice posted social media pictures of Nike shoes they had set on fire or socks with the Nike swoosh cut out.

Twitter user Sean Clancy, or @sclancy79, posted a picture of a pair of Nike trainers on fire on Tuesday that was retweeted 20,000 times.

Athletes including Serena Williams, LeBron James, Kevin Durant and Chris Paul showed support for the campaign.

The controversy may have been a convenient excuse for some investors to sell an over-valued stock, Vivaldi’s Joachimsthaler said.

Christopher Svezia, an analyst at Wedbush Securities, said Nike shares were trading at roughly 30 times next year’s forecast earnings, compared with 24pc for rival Adidas.

“Nike more than anyone else really knows who their customer is,” Mr Svezia said, describing them as largely 14 to 22-year-old males.

Matt Powell, a senior adviser with market research firm NPD Group, predicted the boycott would fizzle.

“Old angry white guys are not a core demographic for Nike,” he said.

Barry Lowenthal, CEO of The Media Kitchen, praised the campaign and said Nike has long proven successful in using celebrity endorsements to promote its brand, a precursor to what is known as influencer marking in the social media age.

“These kind of endorsement deals were the first version of influencer marketing. Of course they know it works. It’s classic product placement,” Mr Lowenthal said.

Irish Independent

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