Risks in Controversial Ads: Nike
Nike has always been one of the most influential footwear and sportswear brands in the world. The company has been vocal in past years regarding various social issues, primarily through the use of its ad campaigns. Nike is a brand that is willing to take a stand while making a profit through its strong opinions. However, the firm’s propensity for airing controversial advertisements has been always a risk for the company. The high probability that Nike’s ad campaigns do not go as planned can ruin the image of the multibillion-dollar firm. Therefore, I argue that the brand should not implement such an advertisement as it would impoverish rather than help the company’s growth. This is for two major reasons: first, the ad would challenge China’s sympathy, compromising a relation with a country that provides the highest percentage of Nike’s revenue and labor force, and second, supporting such acts of violence would go against Nike’s values. The result would be Nike losing both consumers and profits, especially in global markets.
If Nike plays a campaign featuring protestors struggling to gain or maintain freedom in places, specifically Hong Kong, the company will see a dramatic decrease in its profits. This would be the result of angering the Chinese government which has already shown it will take action against criticism. For example, When Houston Rockets General Manager, Daryl Morey tweeted – and quickly deleted – a message of support for Hong Kong, NBA Commissioner Adam Silver issued a message of apology to China (Jason). However, they did not accept the apology because the Chinese felt Morey had no right to intervene in this issue (Jason). China subsequently suspended its NBA broadcasts as well as other related businesses with the league (Jason). By playing the ad, Nike would similarly be intervening in an issue the Chinese think they have no right to intervene in. The situation of the NBA shows the significant risk that Nike could incur if going through with the airing of this ad. Nike’s CEO Mark Parker said, “[Nike is] a brand of China for China”, which highlights the importance of the country in Nike’s revenue (George-Parkin). Nike’s Greater China revenue climbed 22% to $1.68 billion (Chin). Nike also produces about 25% of its global apparel and footwear in China (Chin). If Nike were to be cut out of the lucrative Chinese market, they would lose a significant amount of profits and see a decrease in their customer base.
This ad would greatly differ from other controversial ones as Nike would be featuring increasingly violent demonstrations that have been happening in the past months – especially in Hong Kong (Yeung). Hong Kong’s population started protesting in April against China’s extradition bill that would have allowed for criminal suspects to be extradited to mainland China under certain circumstances (The Hong Kong Protests). Most recently, an 18-year-old was shot in the chest with a live bullet, one of six rounds were fired by police (The Hong Kong Protests). Protesters also fought officers with poles, petrol bombs and other projectiles (The Hong Kong Protests). They have been justifying these brutal actions by saying that they are “for a greater good” (Yeung). The ad significantly varies from the controversial one built around Kaepernick’s scandal in 2018, which drew attention to police killings of African Americans and other injustices, because he peacefully protested without physically injuring other people (Kelner). Nike, by openly supporting the protests in Hong Kong, would not only risk losing one of its greatest sources of human and financial capital but would also be showing support of violence, an idea that would be met with disapproval and polemics by many of its consumers.
As the CEO of one of the largest firms in the industry, it is important to ensure that personal values do not hinder the company’s profits, as well as to avoid risks that could not only destroy the firm’s market but could also lose consumer approval and completely ruin the firm’s image. When dealing with China, brands like Nike need to remain neutral regarding political issues (George-Parkin). It is difficult for such companies to drive meaningful social changes in countries like China without absorbing significant economic losses (Jason). Nike’s inspirational slogan, “Just Do It,” aims to inspire people to do everything they can to make their voices heard (Msa). However, Nike should be more cautious in openly supporting such protests because it could make people imply that it is right to gain freedoms by infringing upon the rights of others. This means that the firm must not back the idea that violence is acceptable to achieve a “greater good”. As David Wolf, managing director of Allison Advisory at Allison + Partners, said, “[…] sport is about the friendly resolution of conflict on the field of play. If there is any stance to be taken, it is for the end of conflict and the expressed hope that all sides will find a way to resolve disputes […].” (George-Parkin). This is the only way for important brands like Nike to achieve social support and subsequently maintain income growth.
In conclusion, playing the ad will negatively affect both Nike’s profits and customer base because of the political issues that would be involved in the campaign. Due to the tremendous risk that the ad poses to Nike’s revenue in China, the brand should not get involved in the delicate topics regarding the protests in Hong Kong. Playing the ad would show that Nike is in support of the violence that has been seen during the recent insurgences, and would possibly damage the company’s image and reputation.
- Chin, Kimberly, and Khadeeja Safdar. “Strong Sales in China Lift Nike Results.” The Wall Street Journal, Dow Jones & Company, 24 Sept. 2019, https://www.wsj.com/articles/strong-sales-in-china-lift-nike-results-11569357896.
- George-Parkin, Hilary. “What’s at Stake for Nike & Other Top Brands as the NBA’s China Controversy Continues.” Footwear News, Footwear News, 11 Oct. 2019, https://footwearnews.com/2019/business/retail/nike-nba-china-hong-kong-protests-1202854322/.
- Jason Miklian, John E. Katsos. “Analysis | China’s Conflict with the NBA Shows Why Companies Can’t Force Social Change by Themselves.” The Washington Post, WP Company, 13 Oct. 2019, https://www.washingtonpost.com/politics/2019/10/13/chinas-conflict-with-nba-shows-why-companies-cant-force-social-change-by-themselves/.
- Kelner, Martha. “Nike’s Controversial Colin Kaepernick Ad Campaign Its Most Divisive Yet.” The Guardian, Guardian News and Media, 4 Sept. 2018, https://www.theguardian.com/sport/2018/sep/04/nike-controversial-colin-kaepernick-campaign-divisive.
- Msa. “Nike Mission Statement 2019: Nike Mission & Vision Analysis.” Mission Statement Academy, 11 Oct. 2019, http://mission-statement.com/nike/.
- “The Hong Kong Protests Explained in 100 and 500 Words.” BBC News, BBC, 14 Oct. 2019, https://www.bbc.com/news/world-asia-china-49317695.
- Yeung, Jessie. “Fed up with Violence and Vandalism, Some Hong Kong Protesters Are Turning Away.” CNN, Cable News Network, 27 Oct. 2019, https://www.cnn.com/2019/10/26/asia/hong-kong-destruction-support-intl-hnk/index.html.