Extreme Ads Makeover – Nike

In this series of “Extreme Ads Makeover”, I will be tearing down ads of Nike and have them completely remodeled to have better targeting and ROI.

Check out more ad makeover case studies such as Lexus, Chanel, Chase Bank, Amazon, Starbucks, Nike, Target, Home Depot, and Nature Made.

About Nike

Nike is the world’s largest athletic footwear and apparel brand. It has seen steady growth since being founded in 1964. In 2021, Nike reported annual revenues of $44.5 billion, up 19% from the previous year. Net income was $5.7 billion in 2021. Nike has an estimated 100,000 employees globally. The Nike app and website have over 100 million members. Nike products are sold in over 190 countries through wholesale customers, Nike-owned stores, and ecommerce. Nike continues to dominate the athletic footwear and apparel market through product innovation, brand recognition, and celebrity/athlete endorsements.

About Nike’s marketing agency

Nike handles most of its marketing in-house, though it does work with some external agencies for certain projects and campaigns. Some key facts about Nike’s marketing:

In-house marketing team: Nike has an internal Global Marketing team based out of its headquarters in Beaverton, Oregon that handles core marketing functions.
Some key agencies: While Nike relies mostly on internal staff, they have collaborated with agencies like Wieden+Kennedy, Mindshare, AKQA, and R/GA on various initiatives over the years.

About Michael Nguyen – CEO of Produce Results Agency, aka the “Extreme Ads Makeover” Host

Since 1999, Produce Results Agency has helped clients double assets from $5ooM to $1B and generated 4000% ROI for a regional bank turning their $66K marketing budget to $2.8M in revenue.

In this post, I will perform an ad audit on Nike’s ads, analyze what’s missing from the ads, come up with new ads, and eventually validate those new ads by running paid traffic on my own dime to see how new ads perform.

I am using Meta Ads in this case study but the same principle applies to other mediums such as Google, Youtube, Programmatic Ads, and short forms.

Table of Content

1. Ads Audit

2. Gaps Analysis

3. Ads Makeover

4. Validate New Ads

5. Insights/Takeaways

6. Next Steps

Ads Audit

Promoted Product: Training shoe

Landing page: https://www.nike.com/t/air-monarch-iv-mens-training-shoes-G5Xn1k/415445-001

Facebook Ads: The Nike team created one ad set to promote.

Ad set #1 (see link)

Analysis

While Nike is a powerhouse in shoe and has already achieved its status as a household name, the increasing competition from brands like Adidas, Under Armour and Lululemon should be taken seriously because any mistake like the above ad creates an opportunity for Nike’s competitors to sneak in and steal market shares.

The ad “Shop Fall Styles to start fresh and members get free shipping on orders $50+” covers a basic promotion, but there are several elements that could be optimized for better performance.

Here’s what’s missing and how it might affect the ad’s performance:

1. Emotion: The ad lacks a strong emotional pull. While “start fresh” might resonate with some, it’s relatively passive. Tapping into emotions can help create a more profound connection with potential customers and drive action.
2. Urgency: There’s no sense of urgency or a compelling reason to act immediately. Without a prompt, like a limited-time offer, viewers might think, “I’ll check it out later” and then forget entirely.
3. Value Proposition: Besides free shipping, the value or benefit of the Fall styles isn’t clear. Why should someone shop these styles? Are there special deals, unique designs, or other compelling reasons?
4. Target Audience Definition: The ad is relatively generic. It could benefit from a more targeted approach. By identifying and speaking directly to a specific demographic or lifestyle, the message might resonate more powerfully.
5. Clarity: The phrase “members get free shipping on orders $50+” could be clearer. Does this mean only members get free shipping? Do non-members get free shipping at a different threshold, or not at all?
6. Testimonials or Social Proof: People often rely on others’ opinions and experiences when making a purchase decision. Incorporating ratings, reviews, or testimonials can boost trust and conversion. Although Nike is a well-known and universal brand, it pays to keep repeating the brand equity and values continuously.
7. Differentiation: What makes these Fall Styles different or better than competitors? The ad doesn’t specify.

Effect on Ad Performance:

• Reduced Engagement: Without emotional appeal or a clear value proposition, the ad might not capture attention or resonate with viewers, leading to lower engagement rates.
• Lower Conversion Rates: Without urgency, viewers might not feel compelled to take immediate action, leading to lower conversion rates.
• Less Memorability: Without emotional triggers, the ad might be less memorable, meaning consumers might not recall the brand or offer later on.
• Broad Targeting: Without specifying a target audience, the ad might reach individuals who aren’t interested in the offer, leading to wasted ad spend.

• Lower Click-Through Rates (CTR): Without a compelling reason to click, viewers might just scroll past.
• Lower Conversion Rates: Even if they do click, they might not be as motivated to purchase without clear value, differentiation, or emotional resonance.
• Less Retention: Without a clear connection or reason to remember the brand or offer, even those who click might forget about it shortly after.

Here are the disadvantages when having only one control ad:

Lack of A/B Testing

• Limited Insights: With only one ad, you won’t be able to perform A/B tests, which are essential for determining what aspects of the ad are working and what aren’t.

Targeting Limitations

• Missed Opportunities for Segmentation: Different ad sets can target different customer segments. A single ad may not be as effective across all segments, missing out on some potentially lucrative opportunities.
• Reduced Personalization: Multiple ad sets allow you to customize messages based on user behavior, geography, or other demographics. A single ad will be less personalized and potentially less effective (more on this below when I do an ad makeover)

Creativity and Message Fatigue

• Ad Fatigue: Over time, the same ad is likely to become less effective as users get tired of seeing it. Multiple ad sets can help mitigate this effect.
• Limited Creative Testing: Having multiple ads allows for testing different creative elements like headlines, images, and call-to-actions. A single ad limits this flexibility.

Risk Management

• Higher Risk: If your one ad doesn’t perform well, you don’t have other ad sets to fall back on. This all-or-nothing approach can be riskier.
• Budget Allocation: With multiple ad sets, you can allocate more budget to higher-performing ads. A single ad does not offer this flexibility.

Optimization Challenges

• Limited Learning: If your single ad isn’t performing well, it’s harder to pinpoint what exactly is going wrong. Multiple ad sets can provide you with more data, making it easier to optimize.
• Inability to Leverage Platform Algorithms: Many advertising platforms use machine learning algorithms to automatically allocate budget to the best-performing ads in a campaign. With just one ad, you can’t take advantage of this feature.

Data and Analytics

• Limited Data for Analytics: Having only one ad will provide you less data, reducing the reliability and validity of your performance metrics.

As a global brand like Nike, I am in shock when there’s only one ad created to promote this popular training shoe.

Moreover, the Nike team doesn’t add any headlines & ad copies to emphasize, educate, entertain, or interact with the prospective buyer.

I am sure there are many angles to talk about this training shoe but what I saw is the generic CTA “Shop Fall styles to start fresh and members get free shipping on orders $50+.” as if this ad is printed from a catalog.

For example, Adidas’s ad TERREX Free Hiker 2 at least takes the time to educate prospective shoppers that the TERREX helps them tackle the trails and enjoy moments of adventure.

Every opportunity to showcase your product counts. But Nike didn’t take the time to maximize this opportunity and waste the ads money.

Attention:

If you had multiple product lines and currently ran paid ads, there’s a 97% chance that you had less than 3 ads based on my experiences of remodeling ads from Lexus, Chanel, Chase Bank, Amazon, Starbucks, Nike, Target, Home Depot, and Nature Made.

Maybe you are perfectly okay with one control ad and burn your ad budget without ROI.

But if you would like to have a second-opinion ads critique so that you can see the gaps and areas where you can extract MORE juice out of your ads, click on the link below to have me critique your ads.

Gaps Analysis

The Landing Page (see link )

Audience avatar: By analyzing the landing page, here’s what I think the avatar Nike is targeting for this shoe is:

A middle-aged, likely male shopper seeking affordable, durable workout shoes. This customer leads an active lifestyle and values proven comfort and functionality over style. They want a shoe that will hold up to regular use for exercise or daily wear. Brand trust in Nike and word-of-mouth drive purchase decisions rather than trendiness. The marketing and reviews focus on long-term comfort, durability and a basic, simple design. Defects like squeaking and poor fit are major frustrations. Overall, the Monarch IV caters to male buyers around 30-50 seeking no-frills workout shoes they can rely on long-term.

I will keep Nike’s landing page the same. because any additional improvement can lead to a marginal result.

Meanwhile, a huge improvement can be made from the ad creatives.

Ads Makeover

Here’s the disease that most marketing agencies and businesses running paid ads:

“They think they’ve tested 20 ads but they really just tested 2 ads 10 different times.”

Headline Options

1. “The Reliability You’ve Been Looking For: Nike Air Monarch IV”
2. “Exercise with Assurance: Proven Comfort & Durability”
3. “Workout Shoes That Last: Step into a Legacy”
4. “No Gimmicks. Just Proven Performance with Nike Air Monarch IV”
5. “Tired of Trendy Shoes That Fail? Experience Monarch IV’s Timeless Design”
6. “For the Ones Who Value Substance Over Style: Nike Air Monarch IV”
7. “Ready for the Sneaker Game’s Best Kept Secret?”
8. “Ever Felt the Heartbreak of Worn-Out Shoes Too Soon?”
9. “Guess What’s Changing the Workout Shoe Game?”
10. “Tired of Mediocre Sneakers Letting You Down?”
11. “Envious of Premium Shoe Comfort Without the Price Tag?”
12. “Stand Defiant Against Subpar Shoe Standards!”

Body Copy Options

1. “Step into a realm where simplicity reigns supreme. The Nike Air Monarch IV is the culmination of decades of commitment to lasting comfort and trusted durability. Perfectly designed for the man who values practicality. Order a half size up for a perfect fit. Plus, enjoy free standard shipping for orders over $50. Don’t just take our word for it, read our glowing reviews.”
   • Models Used: Capability (Does, True), Proof (Credibility, Social Proof), Numbers (Price, Free, Shipping), Time (Now).
2. “Longing for a shoe that matches your lifestyle? Meet the Nike Air Monarch IV. Its no-frills design is crafted for men who appreciate reliability in every stride. Lightweight, supportive, and crafted for the long haul. Fits small, consider ordering half a size larger.”
   • Models Used: Relationships (Avatar), Imagery (Visual), Capability (Is, Does), Numbers (Savings, Size), Time (Now).
3. “Embrace a workout companion that shares your values. The Nike Air Monarch IV is synonymous with long-term comfort, resilience, and unadorned efficiency. Dive into the legacy of trust and ensure every step is backed by Nike’s promise. Recommendation: Go half a size up for unmatched comfort.”
   • Models Used: Relationships (Your customer), Imagery (Kinesthetic), Emotions (Trust), Capability (Is, Ensure), Time (Now).
4. “Reject fleeting trends. With the Nike Air Monarch IV, you’re investing in a legacy of uncompromising comfort and steadfast durability. Built for the genuine man leading an active life. Consider ordering a half size up for a snug fit.”
   • Models Used: Relationships (Avatar), Emotions (Rejection, Trust), Capability (Is, Built), Time (Now).
5. “Choosing Nike Air Monarch IV means choosing a timeless design that doesn’t fade with trends. A shoe that understands your need for relentless comfort and unwavering quality. Get yours and be part of a lineage that values genuine performance. Tip: It fits slightly small; order a half size up.”
   • Models Used: Relationships (Your customer, Avatar), Emotions (Trust, Desire), Capability (Means, Understands), Time (Now).
6. “Don’t settle for style without substance. The Nike Air Monarch IV offers the stability, durability, and comfort that the modern man craves. Wear it daily, wear it proudly. Ordering tip: Runs a tad snug, so order half a size up for a fit that’s just right.”
   • Models Used: Relationships (Your customer, Avatar), Emotions (Pride), Capability (Offers, Wear), Time (Now), Numbers (Size).
7. “Yo, you think you’ve seen it all in sneakers? Think again! Dive into the anticipation of unmatched performance with the Nike Air Monarch IV. Don’t be the last to catch on to the next big thing in durability and comfort. And here’s a promise: You’re about to experience a sneaker revolution. Note: They run small, bro – cop a half size up!”
   • Models Used: Emotions (Anticipation, Surprise), Types of Statements (Question), Future (Promise), Language Devices (Slang), Shame (Stupidity), Capability (Does), Numbers (Size).
8. “Ever felt that sinking feeling of a shoe giving up on you? We get the tragedy. It’s time for a sneaker that doesn’t leave you high and dry. The Nike Air Monarch IV promises not just comfort, but a future where sadness over shoes is history. Question is, are you ready for the change? Heads up: Sizing’s a bit tight – go half a size up.”
   • Models Used: Emotions (Sadness, Anticipation), Types of Statements (Question), Future (Promise), Language Devices (Tragedy), Shame (Vulnerability), Capability (Does), Numbers (Size).
9. “Surprise! Thought all workout shoes were the same? The Nike Air Monarch IV is here to shatter that myth. For those tired of the usual, anticipate a shift in the sneaker paradigm. We predict you won’t just like them; you’ll be telling all your mates about ‘em. Pro tip: They’re snug, so size up a smidge!”
   • Models Used: Emotions (Surprise, Anticipation), Types of Statements (Question), Future (Prediction), Language Devices (Slang), Shame (Stupidity), Capability (Is), Numbers (Size).
10. “Had enough of shoes that just don’t cut it? Feel the anger when they wear out way before their time? If you’re sick of the usual tragedies in the sneaker world, the Nike Air Monarch IV has got your back. This ain’t just another shoe; it’s a revolt against the mundane. Warning: Be ready to be the envy of every gym-goer. Side note: They fit like a glove, so snag a half size up!”
    • Models Used: Emotions (Anger, Envy, Disgust), Types of Statements (Condition), Future (Warning), Language Devices (Slang, Tragedy), Shame (Defeat), Numbers (Size).
11. “Ever looked at someone’s sneakers and felt that sting of envy? If you want shoes that get everyone green with jealousy, Nike Air Monarch IV is the way to go. The tragedy of settling for less ends here. Warning: Once you lace these up, going back to your old kicks might just feel like a defeat. Yo, and remember, these bad boys run a bit snug – you know what to do.”
    • Models Used: Emotions (Envy, Disgust), Types of Statements (Condition), Future (Warning), Language Devices (Slang, Tragedy), Shame (Defeat), Numbers (Size).
12. “Say no to mediocre. Stand defiant and choose a shoe that matches your spirit. If you’re fed up with the disgust of the same old, same old, Nike Air Monarch IV is your war cry. But here’s a warning: Once you experience this level of defiance in footwear, there’s no going back. FYI: For a winning fit, upsize a tad!”
    • Models Used: Emotions (Defiance, Disgust), Types of Statements (Condition), Future (Warning), Language Devices (Slang), Shame (Defeat), Numbers (Size).

Validate New Ads

This is where the rubber meets the road as I am going to validate ad concepts from the previous step by running paid traffic to see which ad concepts would resonate most with the customers.

Here’s how I set the adset on Facebook

• Budget: $10 Lifetime
• Product/Service: Shoe
• Targeted audience: Target with interest in Nike
• Placement: News Feed
• Optimization: Optimized for Traffic

Here are all the 12 ads being launched.

Fast-forwarding 24 hours to let the ads run.

Here’s the results

Campaign Numbers:

• • Ad budget: $15.80
  • Total Impressions: 2,869
  • Total Reach: 2,569
  • Total Clicks: 38
  • Cost Per Click (CPC): $0.42
  • CTR (all): 1.32%

Ad results

Summary

1. Reach and Impressions:
   • ‘Headline 6’ has the highest reach with 585 and the highest impressions with 611.
   • ‘Headline 11’ has the lowest reach with 55, and also the lowest impressions with 62.
2. Amount Spent:
   • ‘Headline 6’ had the highest amount spent at $3.46.
   • ‘Headline 11’ had the least amount spent at $0.27.
3. CPM (Cost per 1,000 Impressions):
   • ‘Headline 3’ has the highest CPM at $6.45, indicating it’s the most expensive ad per 1000 impressions.
   • ‘Headline 12’ has the lowest CPM at $2.63.
4. Link Clicks and CTR (Click-Through Rate):
   • ‘Headline 6’ has the highest number of link clicks at 12.
   • ‘Headline 3’ stands out with a CTR of 2.73%, making it the most effective ad in terms of engagement.
   • ‘Headline 10’ has the lowest CTR at 0.61%.
5. CPC (Cost per Link Click):
   • ‘Headline 10’ has the highest CPC at $0.90.
   • ‘Headline 3’ has the lowest CPC at $0.24, making it the most cost-effective ad in terms of link clicks.
6. Ad Performance:
   • ‘Headline 6’, despite not having the highest CPM, stands out with the highest reach and impressions. It also has a reasonable CTR and CPC, indicating a good balance between reach and cost-effectiveness.
   • ‘Headline 11’ has the lowest reach, impressions, and amount spent. It might be worth investigating why this ad is underperforming compared to others.

In conclusion, while ‘Headline 6’ reached the most people, ‘Headline 3’ was the most effective in terms of engagement and cost-effectiveness for link clicks. It’s essential to consider both reach and engagement metrics when evaluating the performance of ads.

Analytics:

Winning Ads: 

• If the goal is to get maximum reach and impressions, ‘Headline 6’ is the top performer.
• 
  • Headline: “For the Ones Who Value Substance Over Style: Nike Air Monarch IV“
  • Ad body: “Don’t settle for style without substance. The Nike Air Monarch IV offers the stability, durability, and comfort that the modern man craves. Wear it daily, wear it proudly. Ordering tip: Runs a tad snug, so order half a size up for a fit that’s just right.”
    • Models Used: Relationships (Your customer, Avatar), Emotions (Pride), Capability (Offers, Wear), Time (Now), Numbers (Size).
  • Total Impressions: 611
  • Total Reach: 585
  • Clicks: 12
  • CPC: $0.29
  • CTR: 1.96% 
• If the objective is to get the most clicks at the lowest cost, ‘Headline 3’ stands out.
• 
  • Headline: “Workout Shoes That Last: Step into a Legacy”
  • Ad Body: “Embrace a workout companion that shares your values. The Nike Air Monarch IV is synonymous with long-term comfort, resilience, and unadorned efficiency. Dive into the legacy of trust and ensure every step is backed by Nike’s promise. Recommendation: Go half a size up for unmatched comfort.”
    • Models Used: Relationships (Your customer), Imagery (Kinesthetic), Emotions (Trust), Capability (Is, Ensure), Time (Now).
  • Total Impressions: 110
  • Total Reach: 102
  • Clicks: 3
  • CPC: $0.24
  • CTR: 2.73% 

Takeaways/Insights

So in this thorough case study, I extensively analyze, examine, and audit Nike’s ads relating to the workout shoe, then come up with new ad ideas based on 17 analysis “lenses”, and finally validate ad ideas by running them through paid FB traffic to determine the winning ad.

• Leveraging on the fact that Nike has been a household athletic shoe brand for years, the 2 winning ads dive deeper into the benefit of long-term properties of Nike like “legacy”. For example:
  • Ad 6: “For the Ones Who Value Substance Over Style: Nike Air Monarch IV” (Substance)
  • Ad 3: “Workout Shoes That Last: Step into a Legacy” (Legacy)
• Ads 3 & 6 can be bred into a new ad with the dominating ad #6 because #6 has collected lots of reach, impressions, and clicks while #3 has a better edge in CPC & CTR.
• Surprisingly, shame-model ads such as 7, 8, and 9 aren’t delivering this time. Despite their disappointing performance, I wouldn’t write them off yet and would make the following adjustments such as:
  • Identify a new group of audience who are more susceptible to the emotions triggered by the shame-model.
  • Update the landing page to address the emotions from the shame model so that you can appear sympathetic to the affected groups of audiences.
• Having only one control ad can seriously underperform your entire campaign because of the lack of A/B Testing, targeting limitations, ad fatigue, risk management, and optimization challenges.
• Having multiple analysis “lenses” is the foundation to come up with ad ideas addressing customers’ needs, wants, objections, pains, and frustrations. Without additional analysis “lenses”, you are more likely to get “stuck” with boring and mediocre “features & benefits” angle.
• Ideas & creatives are the name of the game.
• I’d recommend Nike create more ad angles for each of their products. The path of “Extreme Ads Makeover” doesn’t stop and should be continuously evolving with the market.

What-If Revenue Impact Analysis

• What If Nike went ahead and doubled down on ad #3 with the lowest CPC,  what would be the revenue impact?
• Let’s make some assumptions:
  • The conversion rate is 1% (given the normal conversion rate of 2%)
  • The shoe costs $75

• • Double down on ad #3 by increasing the number of clicks to 10,000 clicks (Cost = 10,000 clicks x $0.24 = $2,400)
• Let’s calculate the potential revenues
  • At 0.1% conversion rate, 10,000 x 0.1% = 10 shoppers purchased
    • Revenue = 10 x $75 = $750
    • ROI = -69%  ($750- $2,400) / $2,400)
  • At 0.5% conversion rate, 10,000 x 0.5% = 50 shoppers purchased
    • Revenue = 50 x $75 = $3750
    • ROI = 56%  ($3750- $2,400) / $2,400)
  • At 1% conversion rate, 10,000 x 0.1% = 100 shoppers purchased
    • Revenue = 100 x $75 = $7500
    • ROI = 213%  ($7500- $2,400) / $2,400)

Next Step

• Double down on the winning ad and amp up the budget on it because I’ve done the homework for you, all you need is to increase the ad budget.
• I share with you the 17 proprietary models I used to create ad ideas. While those 17 models appear easy for me because I’ve used them to generate thousands of ad ideas, for you, generating ideas may not come easily. That’s why I want to introduce the…
• “Second Opinion” Package

If you are a 7-figure business owner and already run paid ads and need someone to critique your ads for a potential makeover, go ahead and order my “Second Opinion” package.