Peloton is looking for a new agency partner to help expand its increasingly profitable business, which has been described as a “cult” in the best sense of the word.
According to parties with direct knowledge of the matter, the at-home fitness brand whose co-founder Tom Cortese served as a featured speaker at Adweek’s February Brandweek: Challenger Brands recently issued an RFP for the digital portion of its marketing business before dismissing all involved agencies and starting the process over again.
All parties agreed that the results of this review will not affect Peloton’s relationship with Mekanism, which has been its lead creative agency since at least 2017.
It arrives amid widespread speculation about the brand’s initial public offering. Last year, CEO John Foley called Peloton “weirdly profitable” and told CNBC that it doubles in size every 12 months. Foley later told The Wall Street Journal that 2019 “makes a lot of sense” for an IPO, and two months ago, the same publication reported that Peloton had started interviewing banks to prepare for an offering during the second half of the year.
In late February, Bloomberg reported that Peloton had chosen JP Morgan Chase and Goldman Sachs to lead its IPO at a valuation of more than $8 billion.
Two sources who participated in the first round of the review spoke to Adweek on condition of anonymity.
One party said the RFP “ostensibly” concerned digital creative, adding that the agency was excited to participate because Peloton is “actually delivering, unlike most direct-to-consumer brands.” At least five to six agencies received an invite to participate in a “very specific” brief, and according to this individual, client representatives made clear that they were happy with Mekanism as AOR.
That agency’s most recent campaign, Uncharted, ran in January.
“They didn’t want ideas,” said the source, who described the brief as a desire to better understand “multivariant, dynamic creative” plus social media content. The mandate concerned performance marketing, paid social and public relations.
Along the way, the process seemed to break down. Another party whose company also participated in the review said Peloton was “unorganized,” that the agencies received mixed messages from the company and that “nothing was aligning.”
Each agency in that first round, according to three individuals, either got eliminated or pulled out. Adweek’s first source said the client then went “back to the drawing board.” Representatives for all the shops rumored to have been involved declined to comment or did not respond to related queries.
While all agreed that the client is very happy with Mekanism’s work, it has attracted some unflattering scrutiny. In January, “popular Arizona Twitter personality” Clue Heywood went viral with a thread mocking stills from Peloton marketing materials.
Peloton’s spokesperson declined to comment beyond stating that Mekanism will remain the brand’s creative agency of record. A representative for that agency has not responded to emails seeking comment.
Kantar Media has the company spending $70 million on paid media in 2018, a significant increase from its $50 million budget the previous year.