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Peleton Paranoia

Bob Oltmanns, APR, Fellow PRSA

The 2019 Christmas shopping season has barely begun, but already America is buzzing about the Peleton Christmas television spot.

If you haven't seen it, take a look here.

In the controversial 0:30 spot, a young husband surprises his wife with a brand new Peleton for Christmas. We can't tell if she's really excited by this, or if she's intimidated by hubby's thinly-veiled suggestion that perhaps she might benefit from a little exercise. But in the end, she embraces her new challenge and ultimately falls in love with her new Peleton-induced lifestyle.

The spot began running a few weeks before Thanksgiving, and based on the reactions in social media, talk radio, and national news coverage, Peleton has struck a nerve among women who decry it as sexist, body-shaming, and degrading. The New York Times went so far as to call it "dystopian."

The outrage spilled out on social media and reached a crescendo when the NASDAQ opened after Black Friday weekend. Peloton shares sank from the previous week's high of $32.65 to $31.43 on December 5, a drop of about 3.7 percent. One media report estimates the stock hit cost Peleton about $1.5 billion in valuation.

On the other side of the debate, there are others who argue that all this is much ado about nothing, with some dismissing the furor to over-sensitivity, and others who are a blend of apathetic, uninspired, or downright supportive.

Confused? Good. You're supposed to be.

Anyone who is under the impression that some rogue marketing executive at Peleton produced this commercial under a veil of secrecy, bought millions of dollars in media time, and took an epic career risk, knows nothing about how advertising works...or more to the point, how multi-million product marketing decisions are made.

Full disclosure--I have no connection whatsoever to Peleton, don't know anyone who works for the company or its advertising agencies, don't own a Peleton, and have no knowledge whatsoever about how this much-ballyhooed commercial came to be. BUT, I'm willing to bet a shiny new $2300 exercise bike under my Christmas tree this year that this commercial was planned, carefully conceived, pitched, vetted, reviewed, previewed, focus-group tested, revised, re-tested, and approved by nearly every senior manager and executive at Peleton before it ever popped on the air.

You think Peleton didn't see this coming? Give me a break.

Not only did the company know it would spark a wide range of opinions, they knew exactly how close to the line of advertising standards of social acceptability they could go without crossing it. The ad is engineered with great precision to be intentionally ambiguous, an achievement that Peleton knocked out of the park.

But the biggest home run for the agency creative team is the short-term result--the entire country and parts of Europe are today talking about the Peleton ad. People who one month ago had never heard of Peleton are now talking about Peleton. People who never parked their posterior on an exercise bike are now talking about Peleton. Hundreds of millions of consumers poised and ready to buy a trendy Christmas gift now know about Peleton and its decidedly high-income price tag.

Quick--can you name another exercise bike brand name this week? Didn't think so.

The kind of residual publicity, social media, talk radio, and water cooler buzz that the Peleton ad has generated is quite literally priceless.

The advertising media equivalent is simply too overwhelming to calculate. Put another way, for every dollar spent on television media, the Peleton ad has created a hundred dollars in ancillary marketing value.

Of course, the real test will be Peleton's Q4 sales, which the company will likely report sometime in January. By that time, I'm betting that dip in company valuation will have recovered with room to spare and sales will set a new record.

So now there are calls for Peleton to take their condescending commercial off the air. Maybe they should. After all, the ad has, no doubt, already surpassed its wildest expectations. I'm sure the temptation is there to save some money and let all the free publicity do the work. But that probably won't happen.

So in the final analysis, did the company damage its brand by running this particular ad? Time will ultimately tell, but history has shown that consumers and shareholders will always act in their own self-interest. And consumers tend to have short memories. Just ask Exxon, who ran an oil tanker aground in pristine Alaskan waters in 1989. Sure, the company paid a price in the immediate aftermath, but survived and eventually grew even larger.

A year from now, its unlikely that too many people will even remember this ad. And few people who do remember aren't likely to let something like an ambiguous television commercial stand in the way of a luxury consumer decision. In the meantime, there will be thousands of new Peleton exercise bikes sitting in living rooms all around the globe.

Peleton caught lightning in a bottle and they did it by planning and creating their own thunderstorm--a feat that's extremely difficult to pull off.

Well played, Peleton. Well played.

Bob Oltmanns, APR, Fellow PRSA is the president of OPR Group.

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