Nike vs. Diary of a CEO | Brand vs. Direct Response

Look up Nike's stock price and set the range to YTD. What do you see? A 32% drop since the beginning of the year. Lowest share price since 2018. The numbers don't do it justice. Go look at the chart yourself.

4 years ago, in January 2020, the new CEO of Nike, John Donahoe, sent out an email saying:

1. Nike will eliminate categories from the organization (brand, product development and sales)

2. Nike will become a DTC led company, ending the wholesale leadership

3. Nike will change its marketing model, centralizing it and making it data driven and digitally led

To put it another way, Nike got rid of brand marketing and went all-in on direct response. For behemoths like Nike, the impact of management decisions can't be seen for years. So in June 2024, the chickens came home to roost. I've eliminated a lot of detail, of course, to keep this email brief.

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Recently I've seen a bunch of content creators talking about Steven Bartlett's - host of the Diary of a CEO podcast - method for testing podcast topics and YouTube thumbnails. Apparently, his team uses Meta ads to test 20-30 episode topics before recording one. They also test 100 YouTube thumbnails for each episode the same way.

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Last year Alex Hormozi's content strategy shifted from the business topics he became known for, to broader topics like self-improvement, what he eats everyday, and romance/relationships. This year he publicly stated he's going back to only talking business.

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Seth Godin famously said, if you A/B test long enough, you'll end up with a pr0n site.

So much of direct response is getting small incremental wins - 5% here, 10% here - that, over time, add up to big wins. This is necessary and has its place. But brands aren't built this way. And it's the reason why internet marketers will run up one offer until it fatigues, then look for the next offer, then the next. They don't have a business. They have an offer that works right now.

A couple of years ago, I read Alchemy by Rory Sutherland. The thesis of the book is that it's the things you can't measure that produce asymmetric returns, that society has been taken over by bean counters, and that we're all worse off for it.

Alchemy changed the way I think about marketing and building a business. I used to be a by-the-numbers guy. Landing page converts at 10%. We got 100 leads. We want 1000 leads? Just buy 100,000 page views. But that's not how marketing works. Because that's not how people work. So now with my own offers - Dropkick Copy, CopySkills™, MuslimMan™ - I'm trying to do things that can't be measured. Because I want to build brands.

Here's a real-life example. I was on YouTube one day and came across a vlog. Brand new channel. Fewer than 10 videos. Raw and unedited. Just her talking to the camera. I binge-watched them all. The vlogs were about the creator's journey building a consulting business from scratch. She mentioned she was working 10- to 12-hours days to build her business. She mentioned sending 50 cold DMs a day on Instagram trying to get clients, with minor success.

This YouTuber impressed me so much I cold DM'd her on Instagram and recruited her on the spot. I wasn't on her leads list. She had no idea I even existed. Yesterday I wired her more than she makes from her job and freelancing combined. Now she can quit that job, fire her clients and go all-in with me.

How do you measure an outcome like this? Was this plot twist within her consideration set? I know it wasn't. Her YouTube channel is a self-improvement diary. It's not built for client acquisition and she wasn't pitching her offer in the call-to-action. And there was nothing specifically wrong with how she was getting clients either. Hers is the proven approach for newbies - daily reps. But it was the thing she couldn't measure that got her an unexpected, outsized return. That is Alchemy.

Have you seen the virgin vs chad meme of the media buyer? The Diary of a CEO approach is the bean counter approach. The dork approach. The tRuSt ThE sCiEnCe approach. The approach that ends up, in the edge case, with content creators promoting online cas*nos and prosties.

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