Why was controversy good for Peloton?

Peloton started in 2012 with the mission to “use technology and design to connect the world through fitness, empowering people to be the best version of themselves anywhere, anytime.”^[1] In 2019, Peloton released a holiday television ad that drew a lot of attention. The ad opens with a mother and daughter walking down a set of stairs to open Christmas presents. You can see the snow outside through the windows of the house. At the bottom of the stairs is her husband waiting with a Christmas gift.

“A PELOTON?!?” she shrieks—but it isn’t immediately clear if she is happy with the gift. The commercial progresses with the mother documenting her fitness journey. She rides after work. She rides early in the morning. She rides through the seasons as you watch them change through the windows of the house. As the commercial comes to an end, the woman shares her journey with her husband. “A year ago, I didn’t realize how much this would change me,” she says, now a true believer. After her year-long journey and her new “fit” state, she thanks her husband for the gift and how it transformed her.

Consumers immediately took to social media to accuse Peloton of promoting a negative body image, economic privilege, and archaic marital relationships. The controversial ad sparked a significant spike in social media engagement. The brand and the ad were widely publicized in the media. The ad and the controversy definitely produced significant brand awareness and an intense interest in the benefits of using a Peloton.

Once the controversy died down, Peloton was a well-known brand name. And with the lockdowns that came with the COVID-19 pandemic, consumers around the world were seeking options for in-home exercise. Peloton was poised to become the market leader with a reputation as a premier means of in-home workouts.

Much of Peloton’s success is a result of its robust integrated marketing strategy. Consumers learn about Peloton through a variety of methods: YouTube ads, television commercials, mall kiosks, social media posts, and web content. Though the organization does its best to develop its promotional messages, its best marketing strategy is the excellent word of mouth and rave reviews from all its loyal and satisfied customers.

Throughout 2020 and into 2021, during the height of the pandemic, Peloton experienced a 172 percent increase in sales.^[2] But quick growth can create other problems. As Peloton’s popularity exploded during the COVID-19 pandemic, management issues began to surface. In February of 2022, Peloton saw a 73 percent drop in its stock price, which led to the ousting of founding partner and CEO John Foley.^[3] In response, Peloton implemented a leadership change with a new CEO,^[4] expanded product offerings with a digital app^[5] and equipment at a lower price point, and increased retail partnerships with stores like Costco.^[6]

While Peloton has faced ups and downs, the brand’s ability to turn controversy into awareness remains a valuable lesson in marketing. A single viral moment, even one that sparks backlash, can become a catalyst for growth if a company is prepared to seize the opportunity. However, the publicity alone will not propel sales without a sound marketing strategy.

Is all publicity good for businesses?

The notion of “bad publicity” refers to negative attention or controversy surrounding a person, brand, or organization that can potentially harm their reputation or public perception. However, it is commonly said that “there is no such thing as bad publicity.” Is this true?

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While for Peloton, controversy elevated their brand recognition. However, negative publicity can lead to loss of trust and credibility. Just look at the examples of Volkswagen’s defeat device scandal and Boeing’s 737MAX plane crashes. Those events were covered widely in the media and the publicity was extremely negative.

Sometimes it’s hard to say whether controversy is good or bad for business. Target quietly pulled some merchandise from stores in May 2023 ahead of Pride month because store employees received threats.^[7] While some customers may be disappointed that pulling the merchandise is insensitive to the LGBTQ+ community, Target explained they were concerned for employee welfare.

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