Should Companies Be More Socially Aware?

When it comes to commercial advertising, Peloton’s holiday ad in November serves as a perfect example of the fine line corporations must walk in order to maintain social awareness.

Dec. 28, 2019

In late November, a lot of people were left scratching their heads after watching Peloton’s (NASDAQ: PTON) holiday commercial. Immediately following its release, Peloton’s stock plummeted 9%. The backlash on social media was widespread, with some labeling the ad as ‘sexist’ and ‘dystopian’. But was it justified?

The advert — which has around 9 million views — depicts a wife receiving a Peloton bike from her husband, and proceeding to vlog her experience over the coming year, before proudly concluding: “A year ago I didn’t realize how much this would change me.”

Many of us might think that it is a bit harsh to label this as sexist, but perhaps the onus is on Peloton to be more socially aware? 

Social fallout

Since the commercial aired, Peloton’s stock has jumped up and down but is still nearly 18% above its September IPO price. However, the fallout from the ad continues. 

The actress who portrayed the ‘Peloton Wife’ starred in a commercial for actor Ryan Reynolds ‘Aviation Gin’ and poked fun at Peloton, under the caption: ‘No exercise bike included!’. ‘Peloton Husband’ on the other hand, reported in an interview with ‘Psychology Today’: “My 5 seconds of air time created an array of malicious feedback that is all associated with my face. My friend texted me today declaring that I’m ‘a symbol of the patriarchy.”

Peloton may move on, but ‘Peloton Husband’ may have had his career cut short due to its short-sightedness. 

Hear me out, the warning signs were there!

Many will argue that Peloton did nothing wrong and that people have overreacted to the commercial. The recent stock fluctuation experienced by Peloton could have been avoided if its commercial team had been more aware that today’s social climate is far too volatile to take chances.

Society has gradually evolved to be less accepting of classic gender tropes or ‘traditional societal norms’, and it’s time for businesses to accept this, whether they agree or not. There are examples of ad-fallout from other companies. Back in 2017, Pepsi (NASDAQ: PEP) came under fire for a commercial that many critics accused of making light of the Black Lives Matter movement. It took the stock 9 months to recover.

Toiletries giant Unilever (NYSE: UN) came under serious fire two years ago for a commercial where its flagship ‘Dove’ body wash depicted a black woman turning white after using the product. This was far more serious than the Peloton commercial, but the warning was made clear to all — don’t test the public.  

The China problem

Peloton’s commercial was definitely on the lighter side of the examples above, but social awareness could have saved the company a lot of trouble. In 2019, there are many examples of where companies just could not win due to China.

Back in October, Tiffany & Co. (NYSE: TIF) was forced to remove an advert that depicted the Chinese model Sun Feifei covering her right eye. Mainland Chinese consumers took this as a sign of support for the ongoing Hong Kong protests and reacted angrily towards the luxury jeweler. After removing the advert, Western consumers complained that the company had bowed to corporate pressure from China, essentially allowing money to trump integrity. Tiffany’s has since been acquired by Louis Vuitton.

Likewise, game-developer Activision-Blizzard (NASDAQ: ATVI) saw its stock fall in October after withholding prize money and banning an esports champion who supported Hong Kong. Similar to Tiffany’s, Western outrage was widespread from gamers and even politicians, until Activision eventually released the prize money and reduced the ban. 

Even Nike (NYSE: NKE) has had to react to volatility involving China this year. When NBA team ‘Houston Rockets’ was blacklisted by China — its general manager posted a pro-Hong Kong tweet — Nike was forced to remove NBA merchandise from its China stores just to avoid trouble. 

Situations like these just seem to be lose-lose for the company’s involved. When angering China, and remedying the situation, the company will most likely anger Western consumers. 

The first rule of advertising is ‘know your audience’. Unfortunately, that audience is much less accepting of the old ways, so for the sake of investors and consumers alike, companies such as Peloton may need to play it safe from now on. 

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.