Just seven months ago, Sir John Hegarty, one of the world’s creative popes, founder of BBH back in the eighties – one of the most awarded agencies in the world –shook Cannes by sharing a statistic that was devastating and terrifying in equal: brands had invested $750 billion annually in advertising, but only 6% had been truly effective. And it wasn’t a one-off. Over the past 10 years, the effectiveness of advertising has been on the decline. The reason behind this debacle is closely related to a strong belief in technology solving everything, and in advertising that begins and ends with the product, focusing on its key features and short-term effectiveness.
Just seven days after Cannes, on June 28, 2024, Nike faced the biggest collapse in its stock price in the company’s history. In a single day it burned through $25 billion in one swoop. It still hasn’t recovered from that. Much of the blame for this situation turned out to be from its over-reliance on data-driven leadership.
Let’s recap a bit. In 2020, John Donahoe, an executive coming from one of the world’s most prestigious consulting firms, Bain & Company, took over as CEO. For 4 years, Donahoe undertook a major transformation and restructuring of the company. He implemented a rationalization of the company that led to a massive exodus of experts; the running, basketball and soccer categories were dismantled in favor of a more generic segmentation of men, women and children; and a transformation of the customer experience was addressed, leaving retailers aside, and focusing on its global website to avoid depending on them (direct sales to the customer).
The next decision was to abandon the inspirational and memorable brand campaigns that had been part of its legacy, in favor of purely data-driven, product-based marketing. The result was a weakening of the emotional connection with consumers, and a golden opportunity for its competitors to strengthen retail strategy.
The pursuit of short-term profit and cost optimization could not compensate for the damage done to the brand. In September 2024 Donahoe was ousted in favor of the return of Elliott Hill (a move advised by Tim Cook, CEO of Apple). The two profiles are chalk and cheese. The first a financier and consultant, the second a marketing and business operations director and close friend of founder Phil Knight and responsible for the powerful brand, Jordan.
Data-driven marketing has become a buzzword. That’s right, it’s powerful. And there is tremendously efficient technology to make it possible. But often brands fall into the data trap, relying blindly on analytics and metrics, so much so that their campaigns become mechanical. As Hagerty says, “today’s campaigns are annoying, invasive and tedious,” something that makes them ineffective. Something like baking a cake following Julie’s perfect recipe, but we have forgotten to add the secret ingredient that makes it unforgettable to the palate and to the memory.
What Nike forgot during those years with Donahoe in charge was the relevance of characters, stories and emotions, something that data per se cannot convey. Data does not create emotional connections if not combined with the art of storytelling. Narrative. Nike doesn’t sell shoes; it sells the idea of perseverance and victory. Airbnb doesn’t sell accommodations; it sells the feeling of belonging anywhere in the world.
People don’t connect with numbers; they connect with narratives.
Go out, take a look around and you’ll notice how many stereotypical, soulless campaigns have forgotten the importance of data and creativity to go hand in hand, without detracting from each other.
A recent report published by WARC in early February 2025, The Multiplier Effect, deepens into this dilemma. The argument of the report’s authors is that advertising is most effective when the relationship between brand and performance is multiplicative, rather than an addition where the two act in silos. When brand equity, that additional value that a brand adds to a product offering, is strong, it acts as a multiplier and increases the effectiveness of any performance campaign. And data speaks for itself. The report points out that there is a penalty of between 20% and 50% on the return on advertising revenue for those brands that only bet on performance campaigns.
The Nike case teaches us a clear lesson: data is a tool, not a compass. Its value lies in guiding decisions, not dictating them. When brands understand this, they achieve that delicate balance between science and art, between data and emotion. And their campaigns become more effective.
The WARC report also warns of the famous “loop of doom”, the phenomenon that arises when overinvestment in performance advertising leads to the displacement of other formats (with pernicious and misleading effects on metrics that overestimate certain channels in attribution models, preventing a complete view of the real impact of campaigns), when results stop improving after reaching a plateau, when attempts are made to improve performance with poisoned data, and when all this cocktail leads to a significant reduction in impact due to a loss of brand equity. Without a balanced strategy between brand and performance, the loop of doom takes over growth and leads the brand to stagnant advertising results.
Returning to the case of Airbnb, its CEO, Brian Chesky, defines this curious and necessary multiplying relationship between brand and performance very well: “Performance marketing is like a laser. It can light up a corner of the room. You don’t want to use a bunch of lasers to light up the whole room. You should use a chandelier. And that’s what brand marketing is.”
It is time for brands to bet again on creativity without giving up on data. It is not a matter of choosing between one or the other, but of making them complement and multiply each other. To do this, marketers must remember that behind the data sources lies a human story waiting to be told. If creatives do not reclaim the power of storytelling, we run the risk of falling into a world saturated with insipid and inconsequential advertising. Nike has brought back its stories, its characters and its values (Stairs, Morning, Told you so…). Now the question is: which other brands will be brave enough to do the same? And, most importantly, when will the brand teams, performance teams and commercial departments act as a single orchestra?
