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On yer bike: How one YouTube ad cost Peloton $1 billion in two days

Perspectives
SenateSHJ > Perspectives » On yer bike: How one YouTube ad cost Peloton $1 billion in two days

There are good ads and bad ads. But few wipe $US1 billion of a company’s value in two days.

Yet that is what a recent YouTube television spot did for the American exercycle manufacturer Peloton when it ignited a firestorm.

In the video, a man surprises his wife with a bike as a holiday season gift. She not only manages to smile but dutifully exercises for a year.

Cringeworthy yes. But thanks to social media what once elicited a groan can quickly become a movement. Launched on 21 November, the ad attracted three million views. Within days, a spoof video attacking it was just as popular, and retweeted 31,000 times per day. In two days Peloton’s share value fell 10.5% by more than $US1 billion.

Said a marketing professor, you can expect market volatility when people’s view about your company move up and down.  

“I HATE THIS SO MUCH IT HURTS,” proclaimed one tweet. Viewers found the husband was “controlling” and “manipulative” for suggesting his wife needed to lose weight. With a video-equipped bike costing $US 2,245, others attacked tone-deaf marketing pitched at the upper class. Some thought the woman looked fit before she got the bike.

The lesson is familiar: social media has profoundly changed the news. But Peloton shows the mechanics in action. Reporters used to seek out trends or popular feeling. Now these play out instantly. The commercial’s “husband” actor is in shock at the reaction. But his “wife”, Monica Ruiz, scored a tongue-in-cheek appearance in a video ad for gin where a friend tells her, “you look great by the way. “

Analysts predict Peloton will recover. Some even wish for a long-term gain in brand recognition. But shareholders will want their billion dollars back – and wonder at how easily it was put at risk.

A second lesson is more about human nature than technology. Bad taste and stupidity have always carried costs. If you sense something might be a bit off, then pause and take another look. Unhappy viewers don’t need broadcasting authorities anymore, they can smash you right from the comfort of their own phones.

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