Latest / The Marketing Funnel Podcast with Fexingo: Awareness, Interest, Decision, and Action Stages / How Nike Turned Criticism into a Marketing Funnel
Transcript
- Lucas: So earlier this week I was looking at Nike's fiscal fourth-quarter earnings — they reported on June 25th, just yesterday — and what caught my eye wasn't the revenue number itself, which was roughly flat year-over-year. It was the way they talked about their marketing funnel. Luna: Flat revenue but interesting funnel dynamics? That sounds like a classic Lucas deep-dive. Lucas: Exactly. So here's the thing: Nike spent less on traditional advertising in Q4 — their selling and administrative expense was down about 3 percent — yet their direct to consumer engagement metrics spiked. Sessions on the SNKRS app were up 22 percent. And that got me thinking about arguably their most controversial funnel move ever: the Colin Kaepernick campaign in 2018. Luna: Oh, the 'Believe in Something' ad. That one really split the room. Lucas: Right. And that's exactly what made it a fascinating funnel case. Let's walk through the AIDA model — Awareness, Interest, Decision, Action — and see how Nike turned criticism into a machine. Starting with Awareness: the ad dropped on September 3rd, 2018, during the NFL season opener. Within 24 hours, Nike had over 8 million social media mentions. The hashtag #JustBurnIt trended alongside #JustDoIt. Luna: And a lot of that was negative — people burning their sneakers, posting videos. But negative awareness is still awareness, right? Lucas: Exactly. And Nike understood something that a lot of brands don't: in a crowded market, neutral awareness is worthless. You need to polarize. The ad cost Nike about $10 million in production and media — but the earned media value was estimated at over $160 million. That's a 16-to-1 return on investment just for getting people to know the ad existed. Luna: But awareness doesn't convert unless you move to Interest. How did they get people to care beyond the controversy? Lucas: That's the clever part. The ad didn't just say 'we support Kaepernick'. It tied the message directly to Nike's core brand purpose: 'Believe in something. Even if it means sacrificing everything.' That's a value statement, not a product statement. Interest came from the cultural conversation — people debating whether Nike was right or wrong. That debate forced consumers to actively engage with the brand's identity, not just passively see a logo. Luna: So the controversy itself created the interest stage. You had to pick a side. Lucas: Right. And data later showed that people who expressed anger at the ad on social media actually had higher conversion rates than those who stayed neutral. Anger is a high-arousal emotion — it drives action. Nike's internal metrics reportedly showed that critics converted at a rate 1.3 times higher than the average social media user. Luna: That's wild. So the people burning their sneakers ended up buying new ones? Lucas: Some did, yes. But the real action came from the people who agreed with the ad. Nike's online sales surged 31 percent in the week following the launch. And their stock hit an all-time high a few months later. The decision stage — where someone decides to buy — was accelerated by a sense of social identity. Buying Nike became a signal: 'I stand with this value.' Luna: So the funnel didn't just move people from awareness to action. It used the controversy to create a tribe. Lucas: Exactly. And Nike has repeated this playbook. Think about the Alphafly 3 release earlier this year — the shoe that was initially banned from competition because it gave runners too much advantage. Nike turned that ban into a scarcity story. They released only 500 pairs initially, and the social media frenzy was enormous. Luna: Right — the 'banned shoe' narrative. That's almost like a callback to the Air Jordan 1 in 1985, when the NBA banned it for being too colorful. Lucas: Great parallel. That same playbook: turn a restriction into a badge of honor. For the Alphafly 3, Nike used what they call 'drop culture' — limited releases that create artificial scarcity. That maps directly onto the Decision stage of AIDA. When you know only 500 pairs exist and they might sell out in minutes, you make a faster purchase decision. The SNKRS app even shows a countdown timer and a 'sold out' notification, which triggers FOMO. Luna: And then the Action stage isn't just the purchase — it's the social share, the unboxing video, the 'I got 'em' post. That feeds back into Awareness for the next drop. Lucas: Bingo. That's the flywheel effect. Nike doesn't just sell shoes; they sell a story that creates the next customer. One study from 2024 showed that Nike's top 10 percent of customers — the ones who participate in drops — generate 40 percent of their social media mentions. Those mentions are essentially free advertising for the next launch. Luna: So it's a self-sustaining funnel. But I want to push back a little: doesn't this strategy only work for a brand as big as Nike? If a small brand tries to polarize, they might just get canceled. Lucas: That's a fair point, and I'd say two things. First, Nike's advantage is their existing scale — they can absorb a 10 percent boycott because the other 90 percent might buy more. But second, I think the principle applies to smaller brands if you pick a controversy that's authentic to your brand. Patagonia did it with their 'Don't Buy This Jacket' campaign, and they're not a mega-corp — they're a $1 billion company, which is big but not Nike-big. Luna: True. Patagonia's controversy was about anti-consumerism, which perfectly fits their brand. So the key is alignment. Lucas: Exactly. And ironically, the brands that try to be universally liked often end up with the weakest funnels. A 2023 study in the Journal of Marketing found that brands with high 'polarization scores' — meaning they had both strong fans and strong detractors — actually had higher customer lifetime value than brands with neutral sentiment. The detractors don't hurt you because they're not your customers anyway. Luna: So the takeaway here is that a marketing funnel doesn't have to be smooth and pleasant. Sometimes friction — the controversy, the debate — is actually the engine. Lucas: Right. And Nike's earnings yesterday showed that even with flat revenue, their funnel is healthy because engagement is up. They're playing a long game. They'd rather have 50 million passionate customers than 100 million lukewarm ones. Luna: That reminds me — if you're enjoying these deep dives into marketing funnels, and maybe you've applied something you've heard here to your own work, there's a small way you can support the show that keeps it ad-free and independent. Lucas: Yeah, it's a totally optional thing, but listeners have asked. You can buy us a coffee at buy me a coffee dot com slash fexingo. That helps cover hosting costs and lets us keep doing episodes like this one. Luna: And we really appreciate it. Now, back to Nike — one more thing I wanted to ask: how do they measure the funnel for a controversial campaign versus a normal one? Lucas: Great question. They use different KPIs. For a standard campaign, they look at click-through rates and conversion rates. For a controversial one, they look at 'earned impressions' — how many times people talk about the ad without being paid — and 'sentiment shift' among their target demographic. For the Kaepernick ad, even though overall sentiment was negative, sentiment among 18- to 34-year-olds — their core market — actually became more positive by 12 percentage points. Luna: So they knew exactly who they were speaking to. The funnel wasn't for everyone; it was for the segment that mattered most. Lucas: Exactly. And that's the final lesson: a funnel that tries to convert everyone converts no one. Nike's willingness to lose some customers to gain stronger ones is what makes their funnel so effective. Luna: Alright, well next time we'll look at a brand that took the opposite approach — maybe one that built a funnel entirely on inclusivity. But for now, this was a great breakdown. Lucas: Thanks, Luna. And thanks to everyone listening. We'll see you next time.