Is it possible for a 30 second ad to damage your brand in such a way that your stock prices continue to drop for 3 months after? Oh yes – this happened to the exercise equipment company, Peloton. Peloton allows you to compete with others in the comfort of your own home and brag about it on your social media channels. Peloton launched an ad that wasn’t received very well, so we have to ask the question – is there really no such thing as bad publicity? If you just listen to the audio of the infamous ad, you wouldn’t necessarily understand what all the backlash is about. Let’s break down the ad, for those of you who haven’t seen it. Here is a link to the ad:
- The ad starts with a woman being led downstairs at Christmas, hands over eyes, to reveal her present… a Peloton stationary bike.
- The 30 second ad shows her nervously starting to use it for the first time, then getting more into it as she progresses.
- We see the instructors mention her on screen and see that she’s gotten over her trepidation, and is really getting into it.
- Eventually we see that not only are we watching these progress videos… she’s watching them, on the couch, with her husband, a year later.
- She has made this video montage, to show him how far she’s come.
- She says that “a year ago I didn’t realize how much this would change me.” and thanks him for “The Gift of Peloton”
Let’s have a closer look at what the ad was trying to do/say and where it went wrong. It boils down to why the woman in the ad is so motivated by the input of others. It feels manufactured, like she’s done it out of duty and not gratitude
So what was the reaction to this ad? There were two different streams of criticism… that of it being frightening, and that of it being offensive. And perhaps the most important reaction… the brand’s stock dropped 9% ($942MM) in one day. Although the company says it was not linked to the ad, but to a sales lull following Black Friday that year, and it did quickly rebound to almost its previous level.
Nearly six months later we can see that Peloton’s stock didn’t just drop that day, it continued to fall for another 3 months. For their part, Peloton says they stand behind the ad, and that despite the 9% single day drop in their stock price, the ad has not harmed the business. You must admit, it’s admirable how the brand stood by the ad and didn’t back down once during all the negativity towards them.
So what is the lesson to be learned after dissecting this ad. Peloton failed this time because they forgot the fundamental rule of all communication and they created this ad in a bubble – they didn’t test to see how it would be perceived by its audience. Peloton may not have damaged their brand with their core consumers, who knows? But they certainly didn’t build their brand through this episode.
So how do I avoid this happening to my brand? Remember the fundamental rules of communication, WHAT am I trying to communicate to my audience and will they receive the message in the way it was intended.
Listen to two industry experts further dissect this topic, by clicking on the player above or head over to The Marketing Rescue Podcast.