By Gary J. Nix
- Peloton lost $1.5B of market value in 3 days after the holiday ad released
- The price of Peloton’s digital-only monthly memberships dropped by 33%
Premium fitness company Peloton Interactive (PTON -6.96%) experienced multiple instances of disappointment at the beginning of December with its highly questionable “misinterpreted” ad. They can learn a valuable lesson about how context and culture work hand-in-hand after this public relations ordeal that caused the company’s stock price to drop 9% in one day, a loss valued at approximately $942 million.
Why This Matters: The inherent cultural relevance provided by clear, contextual representation of an inclusive community will do more to change how a significant number of people feel about the brand rather than blaming people who did not understand. A simple, contextual omission in their storytelling, which was the perceived removal of the wife’s agency, led to a spectrum of attitudes of the brand ranging from tone-deaf and problematic, to sexist, privileged and classist. Subsequently, many have attributed this initial downfall, at least in part, to the negative press and conversation that can scare new investors away.
This public relations ordeal that caused the company’s stock price to drop 9% in one day, a loss valued at approximately $942 million
Furthermore, a Peloton brand positioning deck obtained by Business Insider points to brand elements missed in the panned ad. The deck listed characteristics such as “inclusion,” “empowering,” and “community” in an advertising program, could have spoken better to the cultural zeitgeist in 2019. For example, fuller integration of one of their well-loved instructors, such as Ally Love, would have covered more of how Peloton wants to be viewed and helped them avoid this crisis.
Situational Awareness: In order for Peloton to distance itself from the Pepsi’s (PEP -0.39%), Dove’s & Heineken’s of the advertising world, and to get the market excited about their stock again, it would behoove them to lean directly into who they say they are in their brand deck. Refusal to do so could prove detrimental to long-term success as brands’ 360-degree cultural IQ continues to be more important.
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