When marketing succeeds, the best of a brand stands out. Consumers are made aware of great deals, product and service benefits, and even the good deeds being done by a company. Sometimes, however, marketers push beyond legal boundaries, and campaigns land them in legal hot water.
The good that results from these often illegal activities is that they serve as an example to other marketers of what not to do. Studying campaigns that led to litigation and restitution can prevent future campaigns from ending up in the same situation. Marketing Dive compiled a few to learn from:
Right before the launch of its IPO in 2011, daily deals site Groupon was also facing a class action lawsuit for its search advertising. The suit was filed by a San Francisco operator that accused Groupon of bait-and-switch tactics. The tour operator claimed the daily deals site would purchase search keywords from Google AdWords related to tours. After clicking through the search ads, it was clear Groupon didn’t actually have any discounts on tours. The operator stressed that Groupon’s purchase of the keywords diminished tour businesses’ search presence. Groupon asked the judge in Oakland, CA, to dismiss the lawsuit, but it was allowed to proceed. The court approved the final settlement, but several objectors have filed appeals that are still ongoing.
It’s safe to say that sometime around 2007, most people can remember getting emails from Classmates.com. Their banner ads were everywhere, as well. Those emails would typically say something about a former classmate looking to get in touch. That’s what happened to Anthony Michaels, of San Diego, who received the email and upgraded to the paid “Gold Membership,” only to discover no one was trying to get in touch. The emails were just a marketing ploy to find members. Michaels initiated a false advertising suit against Classmates.com, who ended up agreeing to pay $3 to every Gold Member—totaling $9.5 million.
In 2013, Bud Light released several online videos that utilized the phrase “hold my beer and watch this”—followed by some ridiculous situation. A craft brewery in Missoula, MT, Big Sky Brewing Co., caught wind of the videos and filed a lawsuit against Bud Light parent company Anheuser-Busch. Big Sky uses the slogan and has had it trademarked since 2004. Anheuser-Busch claimed there was no trademark on using the phrase as a joke—which countless other media did—but ultimately agreed to remove the videos from YouTube.
Marketers of “As Seen on TV” products like the infamous Snuggie, Perfect Bacon Bowl, and Perfect Brownie Pan came under fire this year for misleading advertising. A lawsuit was filed against Allstar Marketing Group for advertisements that promised two-for-one or buy-one-get one deals on the products—while charging customers much more than that. One example on file was a customer being confused by the automated phone system while trying to buy just one Perfect Brownie Pan, and then being charged $105 for six items. The marketing group agreed to pay out $8 million to the FTC to settle the charges. Of that amount, $7.5 million will go directly toward customer refunds. Allstar said it has worked to avoid confusion around the cost of items.
The FTC is not happy with satellite television provider DirecTV. According to the FTC, DirecTV was deceptive in marketing and advertising about its $19.95, 12-month plan. The television provider failed to include in any marketing that in order to claim the 12-month deal, customers had to sign a two-year contract. In the second year of that contract, rates could jump up to as much as $45 a month. Any customer trying to cancel early was charged a fee of up to $480. For the misleading claims, the FTC is charging DirecTV with fraud this month and will pursue refund money for customers. With more than 20 million subscribers, that settlement could be huge.