Four confidential documents obtained by Business Insider show how Peloton plans to expand its audience.
In one, the red-hot fitness startup asked agencies to create campaigns directed at people who are into fitness but not convinced its $2,000-plus bikes are worth the money.
That notion is in contrast with Peloton’s panned holiday commercial that critics said showed, among other things, how the company was targeting the privileged. Peloton’s stock plunged after the ad ran.
Peloton also looked to dispel perceptions that it is a cult, a religion, a fad, or even a fitness brand, another document showed.
Peloton is many things: an $8.2 billion unicorn, an object of envy among investors and startup founders, and a subject of widespread mockery for a holiday ad that critics called confusing, classist, and even sexist.
But according to the brand’s internal marketing team, it is defined just as much by what it is not.
Business Insider obtained four internal Peloton documents: two request-for-proposal (RFP) documents, a pitch overview, and a brand-positioning deck issued to ad agencies earlier this year. Collectively, they show Peloton’s ongoing attempts to expand its customer base before and after a September initial public offering. They describe the company as driven by “a burning desire to innovate like hell.”
The documents show Peloton also looked to dispel perceptions that it is a cult, a religion, a fad, or even a fitness brand. Peloton wanted to position itself as being for everyone — a notion in contrast with its new holiday commercial that critics said showed, among other things, how the company was focusing on the privileged who can afford its $2,000 bikes. Peloton’s stock plunged after the ad ran and inspired a series of spoofs.
In the two RFPs, which went out in January and May, Peloton asked agencies to create digital-marketing campaigns to sell its key products: the stationary bike, treadmill, and digital-subscription app.
The pitch overview sent to agencies summed up Peloton’s philosophy, saying: “Peloton uses technology and design to connect the world through fitness, empowering people to be the best version of themselves anywhere, anytime.”
Peloton wanted to shed the ‘baggage’ of spin bikes
The two RFPs obtained by Business Insider focused on Peloton’s spin bike.
The first, issued in January for a spring campaign, argued that Peloton’s explosive growth was “just the beginning” and that the company wanted to appeal to “those who don’t already understand the magic of a live studio cycling class.”
“Given the baggage associated with indoor cycling and spin bikes in general, the goal of this brief is to re-articulate our core value prop to show Peloton in a whole new light,” the January RFP reads, describing a cycling class as “the immersive cardio experience you never knew you needed.”
A Peloton spokesperson did not respond to a request for comment. The New York-based agency Mekanism, which has been Peloton’s lead creative agency for several years, also did not respond to a request for comment. The RFP overview indicates that its relationship with Peloton was not affected by the review.
The second RFP, issued in May, concerned a campaign set to run throughout the fall under the tagline “For anyone who wants it.”
The brief did not specify any holiday ads, which would include the now infamous holiday commercial in which a woman receives a bike for Christmas and tracks her fitness over the following year; critics noted the affluence of that ad’s apparent target audience. The brief’s language did, however, call on agencies to “gear up for another aggressive holiday” and “help prime the pump ahead of our peak selling season.”
At the same time, the company sought to maximize its value while preparing for a September IPO.
The campaign’s lead ad, which went live in September, shows people going about their daily lives and pushes the message that regular people can afford Peloton’s bikes, thanks to new financing plans.
The ad mirrors the brief, which says that Peloton’s biggest challenge lies in convincing the brand’s core “serious about fitness” target audience, many of whom have been “fueled by misinformation about price,” that the bike is worth its price tag.
Still, Peloton’s self-described target audience is hardly working class.
According to the company, its target is people 25 to 64, well-educated and fully employed, with an average household income over $100,000 and spending $150 a month on fitness. They’re equally male and female, more likely than average to have children, and they work out around four times a week.
The ad-measurement platform iSpot said Peloton spent more than $12 million on placements for the “For anyone who wants it” campaign, which is airing on broadcast television and digital platforms including Facebook, YouTube, Twitter, and Pinterest.
The market-analytics firm Kantar Media estimated the company spent about $90 million on ad buys in 2018 and $59 million in the first half of 2019, an increase of nearly 30% year over year. Kantar’s estimates may exclude some key numbers like social-media and search-engine marketing.
Peloton had a weak IPO debut, but its total estimated revenues more than doubled in both 2018 and 2019, though analysts expect expenses to grow by about 130% this year.
Still, Peloton’s stock price dropped nearly 10% this week in a shake-up that some observers attributed to backlash over the controversial holiday ad.