Peloton Faces Social Media Backlash for Holiday Ad

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Maybe it’s “OK Boomer” or “OK middle-aged guy” that I need to be hearing. When I first saw this ad for the Peloton I thought it was a clever idea. Maybe that was because the ad targets men — who may want their wives to lose some weight or get in shape. Let’s just say that many viewers took took away a different message — and then took to social media to air their displeasure. Maybe Siraj Hashmi’s tweet sums up the backlash best “Nothing says ‘maybe you should lose a few pounds’ like gifting your already rail thin life partner a Peloton.”

This ad provides a current example of a failure in the communication process. We talk about this in Chapter 13 — when the “encoded” message is different from the “decoded” message. When the message receiver doesn’t get the intended communication. I am not sure how widespread this is — maybe there were plenty of naive folks like me that were not offended. It might make an interesting discussion to pose the question about whether the backlash matters? I don’t pretend to know the answer to that question and the potential harm to Peloton’s brand image. On the other hand, it may depend on how the “target market” feels about the ad — and whether the target market is women or men (in this case it is positioned as a gift — though it could as easily be gifted to a man).

You can find the ad on YouTube if you want to see it or show it in class. For some background on the backlash, see this article and TV news clip at Today.

MillerCoors sues AB InBev over Super Bowl Ad

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Budweiser has a history of creative and amusing Super Bowl ads but this year’s ad which centered on their competitor’s use of corn syrup has definitely been the most controversial ad of the year and one that continues to garner headlines.  By the way, the ad is a great example of the comparative class of competitive advertisements.  The ad sparked a Twitter war between MillerCoors and AB InBev and the latest development is a lawsuit filed by MillerCoors against AB InBev.

You might ask how MillerCoors can sue if they do in fact use corn syrup in their brewing process (which they do).  MillerCoors conducted focus groups and through those groups they determined that most consumers don’t know the difference between corn syrup and high fructose corn syrup which are two different products.  They claim the Bud Light ad deliberately confuses and frightens consumers into thinking the unhealthy high fructose corn syrup is an ingredient in Miller and Coors products.  In reality the corn syrup is used in the brewing process but during fermentation it is broken down by yeast and leaves no corn syrup in the final product.  It’s also worth noting that Anheuser-Busch uses corn syrup themselves in some of their other products but they don’t use it when brewing Bud Light (which uses rice instead).  You can read more about the lawsuit and MillerCoors’ claims in this NY times article.

The lawsuit and continued objections from MillerCoors suggests Bud Light’s campaign was (and is) effective but it also brings up an interesting marketing ethics question.  Is Bud Light’s commercial ethical?  If their statement is factual should they be allowed to advertise that point of differentiation?  Should they consider the fact that consumers would likely misinterpret the message or is that not their problem?

Baby Boomer Purchasing Power

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I frequently see students suffer from cognitive bias.  They define the world based on their own observations and experiences and it can be a challenge to help them break free of their own bias and look at the market more objectively.  Demonstrating this bias is pretty easy – just ask your students how Coca-cola should market a new beverage.  Chances are they’re going to answer the question based on what they think will be most effective for them and their peers but they need to think about it from a corporate perspective.  What’s the largest and/or most profitable target market?  Should they use a segmented strategy or combine multiple demographics together?

This Marketoonist cartoon and the accompanying narrative illustrates this idea.  The article says that Baby Boomers control 70% of disposable income in the US and spend ~50% of the consumer product dollars but only 5% of advertising dollars are directed at them.  What do your students think about that?

Facebook Ad Growth Slowing

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2018 was a rough year for Facebook on multiple fronts.  This article, “Facebook Ad-Spend Growth From National Marketers Is Slowing, Intelligence Firm’s Data Shows” talks about one of those fronts.  According to the article, the rate of ad-revenue growth for Facebook is slowing and those dollars are shifting to new players/platforms.  The article quotes James Fennessy, CEO of Standard Media Index (an advertising intelligence service) as saying “Facebook’s growth from national marketers is slowing, indicating that major brands are concerned with recent events there and are focusing on brand-safe environments.”  Still, the news isn’t entirely grim.  Facebook’s ad growth is still positive, and in double-digits so don’t feel too bad for them yet…

Wendy’s Salad Giveaway

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Wendy’s and McDonald’s are once again competing for customers.  The most recent efforts have centered around luring customers into installing their mobile apps.  Wendy’s has been giving away free burgers to help promote use of their mobile app and now they’re using giveaways to promote both the app and their new Harvest Chicken Salad (read more here).  Until October 7, customers can get a coupon for a free half-size salad if they download the Wendy’s app.

Given students’ propensity for free food this may be a good discussion on a number of fronts.  This can fit into promotions, new product introduction, and even a pricing discussion if you want to talk about the impact of cannibalism on a product portfolio or have students calculate the number of return trips necessary for Wendy’s to break-even on the promotion.