Peloton faces safety concerns and holding companies feel the pressure: Monday Wake-Up Call
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Peloton, the home fitness brand that has been one of the biggest success stories of the pandemic, is facing a major safety controversy after the U.S. Consumer Product Safety Commission warned consumers to stop using its Tread+ exercise treadmill if there are young children or pets at home.
As The New York Times reports, the warning comes after disclosure of 38 injuries linked to the machine and the death of a child in March. The commission said that at least one accident was believed to have happened while a parent was using the treadmill, and it also shared a disturbing video of a child who became stuck under the machine, although in that incidence the child was able to get free.
Peloton, however, called the commission’s report “inaccurate and misleading.” Although it acknowledged the child’s death, saying it was “shocked and devastated,” the company maintained that “there is no reason to stop using the Tread+, as long as all warnings and safety instructions are followed.”
It’s not known how many of the $4,200 Tread+ treadmills have been sold, but the warning sees the Peloton brand facing damaging publicity just at a time when it is ramping up its marketing; just last week it debuted a new global Olympics-themed advertising campaign designed to continue its momentum as gyms reopen.
Big holding companies are “feeling the pressure” as they prepare to report earnings this week and next, following Publicis’ return to organic growth in the first quarter, writes Ad Age’s Judann Pollack ahead of results from Omnicom Group, Interpublic and WPP.
“Publicis’ numbers suggest they have turned the corner,” Greg Paull, principal at consultant R3, tells Pollack “and other groups should be posting similar outcomes from a very soft 2020.”
But while certain businesses at the Big 5 agency holding companies—health care, digital and e-commerce—have performed well across the board in the pandemic, they are still weighed down in major sectors like live events. Plus, “uneven rates of vaccination and recovery around the world could result in an earnings drag on sprawling multinational holding companies.”
As travel starts to rebound in the U.S., Expedia is strapping itself in for a reboot, with a major brand makeover and an ad campaign that tells consumers “it matters who you travel with.” The effort comes as the company hopes to turn its fortunes around after a dire year for the travel sector: In the three-month period ending in December, Expedia Group reported a 67% decline in revenue to $920 million.
Ad Age’s Adrianne Pasquarelli reports that the online travel agency is “banking on a fresh new website, new product features, and a big-budget marketing campaign starring Rashida Jones to drive its rebound.” Changes include a new layout on the brand’s website and app, along with features like a virtual agent, easy cancellations and a “keep planning” itinerary experience. In the anthem ad, a young woman experiences snafu after snafu on a trip, until Jones (as the physical embodiment of Expedia) shows up to give her encouragement, support and rescue.
One of the major creative pitches of recent months concluded on Friday with the Home Depot appointing BBDO as its new agency of record. The Omnicom agency will “don the orange apron” to replace The Richards Group, with whom Home Depot parted ways in October after 25 years.
Adrianne Pasquarelli notes that for Home Depot, “new marketing with BBDO will be critical in helping to continue the retailer’s recent sales momentum” as vaccines roll out and consumers return to pre-pandemic buying habits. The retailer, currently the 43rd largest advertiser in the U.S., reported a 25% rise in sales in the last quarter of 2020.
Heading South: Penske Media Corp., publisher of magazines including Rolling Stone, Billboard and Variety, has agreed to acquire a 50% stake in SXSW, reports The Wall Street Journal. The founders of the Austin festival, who created it in 1987, will continue to manage and operate it although Penske will own the largest stake.
The Week Ahead: Executives from Petco, Rent the Runway and eBay are among the speakers at Ad Age Next: Retail tomorrow. Register here. It’s also 4/20, so look out for weed-themed campaigns, and Earth Day arrives Thursday. Netflix, Snapchat Procter & Gamble and Johnson & Johnson are all reporting earnings.
Last call: We've extended the deadline for our annual Young Creatives cover contest. You now have until this Thursday, April 22 at 5 p.m. EDT to enter. Go to adage.com/youngcreatives to submit your work.
Crunch time: Frito-Lay's U.K. potato chip brand Walkers is hoping to start up a debate about "crisp sandwiches,” in a new campaign by VCCP that also includes partnering with Subway to allow people to choose chips as a topping on subs, salad or wraps. Take a look over at Creativity, and don’t forget to catch up with the team’s live review of the Top 5 creative ideas of the week.
That does it for today’s Wake-Up Call, thanks for reading and we hope you are all staying safe and well. For more industry news and insight, follow us on Twitter:@adage. From CMO Strategy to the Ad Age Datacenter Weekly, we’ve got newsletters galore. See them all here.
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