Sportswear giant Nike (NKE), one of the most followed brands on social media, is having serious issues connecting to its massive audience, leading to a huge social media setback and a loss of about $30 bln in its market cap.
According to data compiled by AltIndex.com, Nike has lost more than a million Instagram followers over the past three months, raising concerns about its ability to remain relevant in the highly competitive social media space.
Over the years, the stock market has seen a number of stocks whose prices skyrocketed or plummeted based on social media momentum.
A single Reddit post or a tweet from a prominent investor can create a huge interest in a particular stock, increase its trading activity, and even influence its price. That is why companies pay special attention to growing their social media communities and keep them engaged.
For years, Instagram has been a cornerstone of Nike’s marketing strategy and an essential channel for reaching its core audience of young, active, and trend-conscious consumers.
According to AltIndex data, between August 2023 and April 2024, more than 18 mln people started following Nike’s Instagram account, reaching an all-time high of over 307 mln followers. But things changed a lot since then, with Nike’s Instagram fan base melting down for eight months in a row.
Since April, more than 4 mln people have unfollowed Nike on Instagram, with a sharp loss of 1 mln in just the past 90 days.
More than just numbers
This is more than just a numbers game. Losing millions of followers, particularly over a longer period, is a potential signal that the company is losing its grip on a critical audience, which is a huge alert for a brand like Nike, known for its storytelling and emotional marketing.
This downturn can be explained by a combination of several factors.
Rising competition from other sportswear brands, their fresh marketing strategies, personalised engagement and innovative design are capturing more and more attention from younger audiences.
Meanwhile, some of Nike’s recent campaigns have sparked controversy, dividing its audience rather than uniting it, with growing criticism that Nike’s Instagram content has become stale, lacking the creativity that once set it apart.
Such a huge drop in Instagram followers, coming from the most-followed brand on the platform, is an important alternative data signal for investors. Social media engagement is one of the leading indicators of brand strength, directly affecting sales, partnerships, and long-term growth potential.
Nike’s case proves this. The fallout from this social media decline isn’t just impacting its follower count but also its stock value.
Since the decline began, the sportswear giant has lost roughly $20 billion in stock value, falling from $135 bln in April to $114 bln as of this week.
