Nike’s turnaround has begun – but it will take a long time

It was probably one of the least surprising ads of Super Bowl Sunday: Nike doing what Nike typically does. Star athletes from a variety of sports. Sixty seconds of high-definition, brand-building monochrome. From a killer creative team at Wieden+Kennedy, whose relationship with Nike is older than any of the athletes featured. And, at the heart of it, all the brand’s ‘Just Do It’ ethos – which itself spans more than three decades – reverberating through every pixel.

But, of course, this incredibly congruent ad was indeed a departure for Nike, because the brand had previously diverted from its traditional path under former CEO John Donahoe. From 2020, the brand underinvested in brand building, turned its back to some degree on sport and big-name athletes, pissed off all-important retail partners with its direct-to-consumer (DTC) strategy and generally lost the marketing plot.

One of the stars of Sunday’s ad provided a perfect illustration of Nike’s weirdly aberrant path during the Donahoe years. There is no hotter athlete in the United States than Caitlin Clark. The basketball phenom has been signed with Nike since 2022. But despite the deal and her ever-growing fanbase, Nike did almost nothing with her. No signature shoe. No major campaign. As Clark became more famous and ever more aligned with the Just Do It philosophy, Nike appeared increasingly unsure of how to work with her.

But all that changed with the arrival of Elliott Hill last September. Nike’s new CEO was a lifer until retiring in 2020, when he was passed over for the big job. Cometh the hour, however… and Hill was back, seemingly pumped full of Nike DNA running through his veins. Nike’s share price, which had lost a quarter of its value during 2024, suddenly leapt by 6% in a day at the news of Hill’s appointment.

Four big strategic mistakes Nike needs to reverse

Rediscovering differentiation

And to the new CEO’s credit, he got it exactly right. “Let Nike be Nike again,” was Hill’s mantra in those early weeks of his appointment. In almost every interview or analyst meeting, Hill would deliver that same sentence. And while it appears an obvious statement, it’s actually the purest branding thought of them all. And it’s a sentiment so often missing when marketers talk brand.

Yes, it’s about salience. Yes, it’s about excess share of voice. Yes, it’s about existing brand size. Yes, creativity matters. But at the heart of brand success is the radical requirement to do it differently from others and totally aligned with your own approach.

The only way to truly understand Brand is with a capital ‘B’ and no plural ‘s’. Yes, I know, the great red book talks about how brands, in general, grow. But I’d argue that, aside from those precepts and occasionally atop them, we also need to remember the essential relative differentiation that drives the success of brands like Nike. It’s often easy to ignore the vital role differentiation plays until, as in the case of Nike, it’s diminished to the point of non-existence and the generic shit eventually hits the fiscal fan.

As simple as it sounds, Hill’s mantra to let Nike be Nike again was exactly the right prescription. His predecessor came in with grand plans for the digital transformation of Nike but the hard truth was that the whole strategy was generic. That isn’t just a lazy assessment of a now infamous period in Nike’s history. I remember walking into a US Nike store early last year and being stunned at just how empty, bland and un-Nike the space and its products had become. Like a second-class Lululemon. In beige.

Thanks to his quarter-century on the job, Hill returned with an inherent sense of what Nike was and what it should be again. As he recently told Fortune magazine, the three things at the core of what Nike is about are sport, performance and human potential.

I remember walking into a US Nike store early last year and being stunned at just how empty, bland and un-Nike the space and its products had become.

In some ways, Hill has a relatively simple mission ahead of him. Just reverse the Donahoe era’s missteps. Sport becomes the heart of the business again. Athletes are elevated to a special place where they inform product innovation, promote the brand and use the product at the cutting edge of their respective sports. Invest more in communications and ensure more of it goes on ‘the long of it’ and brand-building statements that focus on Nike, rather than individual products targeted at specific consumers. Nike being Nike again.

That’s what Sunday’s ad was all about. Nike was back to long brand building. To mass audiences. With star athletes. And a message that was unambiguously about doing it in a Nike way. And according to the 578 different assessments of Sunday’s Super Bowl ads that invaded everyone’s LinkedIn feed, it was a hit. This was an A+, a 5.9, a top 10, a gold.

And, if modern brand theory is correct, Hill should now see instant growth. That’s because, although most of us spent the last 10 years thinking ‘the long of it’ was named after the time it takes brand marketing to impact sales, we are now realising there is no extended wait for impact. In fact, the effects begin immediately and ‘long’ actually refers to the amount of time they last. System1 has impressive data showing that if a campaign works to build brand it also immediately shifts product too. Long drives short. System1’s chief innovation officer has repeatedly and rather brilliantly pointed out that ‘lasting’ would have been a better word than ‘long’ for that reason.

Slow return to growth

So why is Nike’s sales and share price not rebounding? After an initial jump upon the announcement of Hill’s return, the company’s share price has continued to slide despite all the positive press. The short answer is because Hill’s predecessor did such a spectacular job of fucking up Nike that it will take time. Donahoe’s four-year tenure saw people leave, products become generic, retail partners get angry and competitors become emboldened, and it produced a massive mountain of unsold inventory that now needs to be offloaded.

While Nike’s brand might be on the mend, the rest of the business needs years, not months, to return to health. That was the message from the analysts who attended a special update meeting with Hill last week to learn about Nike’s turnaround progress. The rest of this year’s growth will be lost to recovery, and probably 2026 as well. Not because Hill is doing anything wrong, but because doing the right things take time and a steady pair of hands, not turning the strategic wheel too much.

While ‘the long of it’ can work almost immediately at a marketing level to drive demand, and then extensively for a protracted period after that to maintain it, if the rest of the business is not ready to meet that demand with product and distribution, all those marketing bets are off.

And we need to stop venerating great turnaround stories where a company first falls in love with digital bollocks and goes all-in on performance, only to then pivot, three years and a new CMO later, to big brand advertising and a focus on emotion. From Airbnb to Zappos, nothing makes for a better marketing read than a company losing its way and then finding branding Jesus again.

But as Nike illustrates, it can be a while before refound focus turns into the promised land of incremental sales and price premium. Marketers should focus on the non-story of big brands that have always kept the branding faith. Granted, the fact that P&G or AB InBev or Ford are really good at branding and aren’t ever going to forget it is not going to win any prizes when it comes to marketing columns. But that does not stop it from being the big story.

Mark Ritson will teach the advanced and applied Mini MBA in Brand Management in April. The course can be studied from anywhere and takes 14 weeks to complete.