Elon Musk violated the rules of his own platform X, and The fall of Nike

Did you see how Elon posted the parody of Harris and there was no community notes on it being AI-generated, false, or anything like that? And the last time I checked, it had 120-something million views. Not one note saying it's fake.

What was it about? What was the content?

What was the content? It was a parody making fun of Harris's presidential bid.

Oh, the 2-minute one. The 2-minute video, right? Yeah, yeah, yeah, yeah, yeah.

Not one note saying this is false.

What was— what was the parody? Can you explain what's in the content?

It was straight up video making fun of her and saying the reason why she was running, making fun of Biden and her and, you know, talking about race and stuff like that. But the point I'm getting at is—

It was— wasn't that one AI generated?

It was.

Yeah.

Oh, that's interesting. The point I'm getting at is people are going to trust these platforms less. If they trust these platforms less, it's going to affect your marketing. And you need to keep that in mind based on where you decide to advertise or not advertise. And I'm not telling you you should or should not advertise on X. That's up to you. And it's not just X who's doing this, it's Meta who's doing this. It's right, just like the example we gave earlier when you're asking about the assassination attempt. It's Meta, it's Google, it's X. They're all doing it to some extent. And it's kind of crazy because in essence, this is a version of censorship, right? And you want to make sure that the government, I think, should step in and stop all these players from censoring.

Yeah.

We're not one of those— people will say like, we're very different from one of those other countries. You know, that censor and control. I'm like, we kind of do the same thing in the United States.

You know what's funny? It's not funny, but let me tell you. So one, okay, if, you know, we run these big tech companies, we're going to operate according to our own incentives. We have other stakeholders, there's different board members, and we have to listen. There's like, our hands are tied. It's not like, you know, in your situation, you have the lion's share of the equity, right? And in my share, same thing for me as well, where we're kind of more free to make the the decisions that we want to make. That's one piece of it. The second piece is kind of related to what you're talking about. So I did— I met someone the other day here and she lives in Shanghai right now. She lives in Shanghai. Okay. And so I was like, hey, like, you know, do you guys worry about, you know, the evil United States, so to speak? Right? Like, do we do, you know, because in China there's rhetoric around, you know, oh, we have to compete against China. And then they're like, in China, they're like, we don't give a crap. Like we just, we live our own life, but like they live in the future. Right. Um, the way that their kids are so bright, their kids are 3, 4 years old. They're learning about AI. They're learning about science or learning about engineering. Right. At that age. Um, and they're just so far ahead and they've worked extra hard. And you know, you know how it is, right. In Asian society, like, you know, for Chinese people, we don't have a God. The only God is we have like a money God. Okay. Um, so everyone's just working really hard all the time. Right. And so they're not paying attention to the United States. Whereas on the other side, like we're trying to like, you know, And I was like, so, you know, we, we hear that life is like, you know, way tougher in China. The economy sucks. Like, no, everything's great. Everything's cheap. People are very respectful of each other. It's like when I travel to America, I have to worry about if I'm going to be safe or not. Right. So you have to also be careful. But what I'm getting at here is like when you and I or our parents used to watch the news when we were younger, everyone just believed what the news said. But now you have to understand more and more there's censorship going on. You have to just really learn to think for yourself because that's what matters at the end of the day.

Dude, and it's starting to start when kids are young. You know, my daughter's going to school. When she was in school, she comes home. She's like, Daddy, you're not being fair. I'm like, what do you mean you're not being fair? She's like, my teacher taught me that you need to be fair. Everyone, you know, you have to be equal and be treated the same. And I'm like, yeah, I get that. So like—

Really?

Race, you know, like down the hallway to the front door. And she starts talking about, oh, you need to be fair. Everyone's a winner. I'm like, no, no, no. Everyone is not a winner. I don't care what your teacher told you. She is wrong. And there's first place, there's second place, there's third place. And I was telling her in marketing and in business, I was just like, look, there's either winners or losers. Are you going to be a winner or a loser? Either if you're going to be— if you don't know who the winner is in the room, it's not you and you ended up losing. And I'm like, you need to work really hard to try to win in whatever you do. You want to be a painter, be an amazing painter. You want to be a surgeon, be the best surgeon out there. You want to get traffic to your website, try to beat all your competition. Life is a challenge. It's a game. It's not as simple as everything is fair and everyone gets treated the same way. I'm not talking about race or anything like that. And what the teachers were teaching her weren't about treating people from different colors or races or anything like that fairly. It was more so about people winning and losing and the way life works. And I'm like, no, no, teacher is wrong. There's winners and there's losers in life. And I was trying to explain to her, I was like, do you have food on the table? And she's just like, yeah. And I'm like, how do we get around? And she's just like, we have a driver. I was like, what's the driver's name? And of course she knows Philmon. He's been with us for years. I was like, do you clean? She's like, no, we have Franny. And I'm like, yes, but do you still help clean? She's like, yeah, I put away my clothes and, you know, help make my bed and stuff. I was like, okay, so you have all this stuff, right? And she's like, yeah. I'm like, do all your classmates have all this stuff? She's like, no. And I was like, do mommy and daddy have money or no money? And she's just like, a little bit. You always say we don't have enough money and I can't buy stuff. And I just started cracking because I really do tell her we're broke, you know. And I'm not trying to make fun of others or other people's situation, but I wanted to understand. I don't want to keep buying her toys. And what's funny is, is, you know, during that conversation, long story short, she understood we had stuff that others don't. And I said, we worked hard for it, but working hard doesn't guarantee that you're going to have all this stuff. There's a lot of people who work hard. You got to get creative and you got to figure out how to do well in life. And it's not just handed to you if you go to college or if you work hard. There's no guarantee that you're going to be successful.

You know what really bothers me when— so you see a lot of polarization and maybe I felt like this when I was younger, maybe in high school, you know, there's envy like, oh, rich people, rich people. But like the people that are envious of rich people, it's like, okay, well, how did rich people become— well, to become rich, you have to be successful. Well, how did they become successful? Well, they had to create a product or service that other people were using and they had to do it at scale to become really successful. And so to me, a rich person at the end of the day, is someone just that's a person of value. But people like to paint rich people as like this enemy, right? Which doesn't make any sense to me. It just shows that most people aren't really thinking that. That's a whole nother thing. But going back to your point, we're talking about equal opportunity, not equal outcome, right? And some people, I can tell they don't like it when I say that. I'm just, that's what I truly believe in, right? I think the starting line should be the same for everybody. That to me is equal. But if we all end up in the same place at the end of the day, Then what's the point of working hard? There's no point in working hard. Like you wouldn't work hard anymore. I would like, no, we're gonna end up in the same place anyway. I'd just rather just do nothing, but that would be boring to me.

Yeah. It's like communism, huh? You know, living in Cuba. Oh, you're a doctor. You, you, you're a janitor, you're a teacher, and everyone just gets paid the same. And it doesn't matter if you suck or you're good at what you do. Um, but I'm with you. I, I, I believe starting line, it would be great if it was the same, although that's not reality. Um, but your output and how good you are. And how creative you are should determine where you are in life. But a lot of people don't believe that. And if you look at Eric and I, we didn't grow up with silver spoons. We grew up with nothing. We both grew up poor. And our parents didn't have money. We figured it out and they figured it out. And, you know, we've done all right. We're not rich like a Bill Gates or Elon Musk or anyone on the Forbes list, but we do just fine and we're still working hard and We're trying to continually do better and we feel we can do so much more and there's way more to continually earn and strive for in life.

Yeah. And the last point on this one, I would say for both of us, I think it's the vast majority of the people that do well that we know are very humble, very nice people. And a lot of them made the money on their own. And even the ones that maybe their parents came from money already, they were brought up really well. Their parenting was really good and they're just as good, if not better, than other people that we know. And so I think it's people that you look down on, or maybe there's envy around rich people. It's not that, it's just that they're providing value. I got to take a minute to tell you about the Agency Owners Association. This is a peer group for agency owners. Think YPO or EO, but for agency owners. And I just wanted to read you a couple of testimonials. So this first one comes from Carrie, and we asked her, what do you like most about the group? She said, having a group of people to discuss and bounce ideas. The leads are great too. Yes, we share leads in this group as well. This one from Ollie, and he says, the ability to really post whatever I want and need, and the group responds. Great experienced members. Getting a lot of insights from conversations with other members. Getting a lot of value from sessions from Eric. Getting advice from others as well. And so if you want to grow your agency faster and you want to peer group to do so, just go to marketingschool.io/agency. This is a group that both Neil and I created, and our hope here is to create a vibrant community of agency owners and do a lot more with it in the future. So again, marketingschool.io/agency, and we'll see you inside. Neil, I have this one over here on— this one's a fun one. So basically the headline here is, you know, Nike stock has tanked, right? And then this former person that worked at Nike, I think it was an executive, He's basically attributing part of the fall to performance marketing. And you know Nike, they spend billions of dollars on performance marketing. So let me share my screen over here. This one should actually work. So Neil, do you see this?

Yeah, I can see it. Yeah.

Okay, cool. So let's move over to, I think it's okay right here. So highlighted over here. So let's start with A. So one of the things that led to the downfall, so it says, what happened in 2020? Well, the brand team shifted from brand marketing to digital marketing and from brand enhancing to sales activation, all in. Because of that, the CMO of that time made a few epic moves. And I'm not going to read all of this, everyone. This is a post from Massimo Giunco, I think. Sorry for butchering your name. So A is shift. Nike shifted from create demand To serve and retain demand. That meant that most of the investment were directly directed to those who already were already Nike customers or members, quote unquote. B, I'm not going to read the whole thing here, but it says B is massive growth of programmatic advertising investment. As of 2021, to drive traffic to nike.com, Nike started investing in programmatic advertising and performance marketing at double or more of the share of resources usually invested in other brand activities. For sure, the former CMO was ignoring the growing academic literature around the inefficiencies of investment in performance marketing, programmatic advertising due to frauds, rising costs of mediators, and declining consumer response to those activities. Things that were suggesting other large B2C companies like Unilever and P&G to reduce those kind of DC investments in the same exact period. Because of that, Nike invested a material amount of dollars, billions, into something that was less effective but easier to be measured versus something That was more effective but less easy to be measured. In conclusion, an impressive waste of money. That was a mouthful of stuff. Go ahead, Neil.

This person should be fired.

I think this person doesn't work there anymore.

This person doesn't work there anymore.

I don't think so. By the way, this guy that left the comment, the comment that has, I know this guy, he actually has a holding company of agencies. So let's see what his, you want to read his response? Tim Ringel.

Thank you for the analysis. I agree 100% from the marketing perspective that catching lower the funnel conversions will never replace upper funnel brand building. It has to go hand in hand, especially in times of social platforms and creating all the noise. Nike had to figure it all out for so many years until the conversion and loyalty trap kicked in and the brand building didn't become a priority anymore. I think Tim is wrong as well. It has nothing to do with marketing. The reason Nike doesn't do as well as some of the other players, if you actually, if they, this guy actually talked to their customers. I'm a Nike customer and I know quite a few who slowly stopped buying stuff from Nike.

We all still buy a lot of shoes, Yo, Neil, Neil, Neil, look, this guy worked there for 22 years.

Yeah, 22 years. You know what the real issue is, is they stopped innovating on a lot of their products and other people did. If you look at like their apparel and clothing, they haven't done much. If you looked at the shoes, there's other companies like On. Have you seen On?

No, have you sent it to me later?

I, I don't know your size, but send me your size. I can go buy you a pair. You have to go find out.

No, no, not buy me a pair. Send me a link.

I'm not telling you to buy me a pair. Okay, so on shoes, Nike had the option of doing those type of shoes. They said no. The person left Nike and ended up going and creating their own shoe company. But the point I'm getting at is they had a lot of options to innovate and become better, and they chose not to. That's really the downfall of Nike. When you see all these products on Instagram and Facebook and TikTok that you're buying, they're using performance marketing. They're selling similar stuff to Nike. Why are you buying them? Because their products seem better, at least from the ad perspective, than the Nike product. That's the real reason. What Nike failed to do is continually innovate. Just like back in the day, they had air bubbles, right? They had really cool clothes, and they started coming out with these sweatpants that everyone would wear. like maybe like 10-ish years ago and they're really popular, but they stopped innovating. They started bringing out way more colors in their shoes and they started doing a lot of crazy unique stuff with the Jordan brand and having other celebrities join. But their playbook of, hey, let's just keep sponsoring NBA players and putting a logo on the shoes and have them sell it. Like, that's cool and all, but Adidas does that. New Balance does that. Like with Steph Curry, like this playbook is getting old. They're not doing really anything that's innovative. And that's the issue. It's not performance marketing. I know a lot of shoe companies and apparel companies that are blowing up on performance marketing and through brand building as well. The real issue is, is there's very little innovation on Nike. And when my wife shops at Nike, it just ends up being for shoes for our children. And that's it.

All right. Quick note. This is about my company. It's called Single Grain. And Single Grain is an ad agency where we're focused on driving Driving innovation. Want to talk about a couple of new strategies, and if you need help with marketing, great. If not, here are a couple of new strategies that you should try out. One is programmatic CRO. So we are doing programmatic conversion rate optimization on our site. So it's building products that will automatically optimize your site to increase conversion rates. We're also auto-optimizing, auto-updating from an SEO standpoint, and we're constantly thinking about what else we can do in terms of enriching the visitors that are hitting your website and also. tailoring custom messages for them using AI. And so there's a handful of things that we're doing from a marketing standpoint, and our mission is just to drive more innovation. So if you want to learn more, just go to singlegrain.com, grain like rice. So singlegrain.com to learn more, and we'll see you inside. So my perspective on this one is, Neil, he did say in this bullet over here, they shifted from create demand to serve and retain demand. So he's kind of, he's more obviously he's been a brand guy for 22 years there, so he's going to lean heavily against brand. So I think that's why he's railing on performance a little bit. Let's leave that part aside. But I do think he said like, you know, part of the innovation piece is like when you're trying to create demand, you are focused on driving a lot of innovation, right? Versus just kind of playing defense and retaining. So I think he said it in a way, but I do agree with you because my friend who used to, you know, this guy Thomas.

Yeah.

So he, every year he would send me the newest Nike, you know, Metcons to buy the workout shoes. Right. And I would just keep buying like every year, like I would just buy a new pair because every year I need a new, pair of workout shoes and I just didn't know what was good, right? Now he's sending me new stuff because Nike, the Metcons that I've had over the— I probably had Metcons for the last, I don't know, 6, 7 years or so, 8 years maybe. It's all the same thing. And when you don't innovate, that gives someone else the opportunity to come in and eat your lunch. Same thing. So that definitely applies to your product and service, but that also applies to your marketing as well.

Totally agree. And Nike keeps doing the Just Do It ads and they've been doing that for years and the branding's great. And I'm not saying they should Slow down on there, but you can spend all the money you want on branding or even performance marketing, but if your product sucks compared to the competition, you're going to lose out. It's that simple.

Yep.

I think that's it. I think Eric got cut off. We'll see you guys tomorrow. Appreciate you guys tuning in for Marketing School. Have a great day and check out marketingschool.io/agency, I believe is the URL.