The timing couldn’t have been better – discuss the ethical, social and economic impact of advertising in my Saturday marketing promotion class, then hear the news surrounding the class action lawsuit settlement for Skechers Shape-ups toning shoes regarding deceptive advertising claims related to this footwear.
As reported in the Boston Globe, “(The Skechers) ads… claimed that the sneakers with the rounded bottom toned muscles, improved posture, and encouraged weight loss, while reducing stress on knees and ankles.”
Skechers denied the allegations but “…could not ignore the exorbitant cost and endless detraction of several years spent defending multiple lawsuits…across the country. “ The result is one of the largest, if not the largest, settlements to date -- a whopping $40 million reached with the Federal Trade Commission for consumers who purchased the shoes.
If this feels like déjà vu, that’ s because it seems eerily similar to the $25 million settlement Reebok reached over this same kind of product advertising last year.
In fact, part of the material discussed with the students last week centered around the November 15, 2011 report by Advertising Age that quoted Skechers’ SEC filing that quarter:
“…based on discussions with the FTC staff, we do not believe that the FTC’s pending inquiry into our toning products will likely end in a closure statement assuring no further regulatory action.”
In the end, some of the variety of ways advertisers can amend their misleading advertising through FTC actions as noted in Advertising and Integrated Brand Promotion 6th Edition by O'Guinn, Allen, and Semenik can include:
cease-and-desist order -- advertiser stops running an ad within 30 days so a hearing can determine whether the advertising in question is deceptive or unfair.
consent order -- advertiser accused of running deceptive or unfair advertising stops running the advertisement in question, without admitting guilt.
corrective advertising –advertiser runs additional advertisements to dispel false beliefs created by deceptive advertising.
So for marketers and consumers, this settlement is a lesson to be learned. Ad claims ARE subject to substantiation and scientific evidence and not just TV spots from celebrities such as Kim Kardashian and Joe Montana.
(And incidentally, reports suggest that Reebok went back to the drawing board regarding its testing and communications messages and has not abandoned the toning category. So watch for further developments -- just not necessarily ones associated with your calf muscles.)