Groupon In Trouble For Selling Snake Oil, Literally
Reputable internet business Groupon has been banned from ever again advertising snake oil, an activity Groupon not only engaged in, but defended, back when it was trying to assure everyone of its steady growth.
In October, right before Groupon went pubic and around the time its was trying to convince everyone it was growing its way out of technical insolvency, the company launched a campaign in the U.K. to promote a deal for "Wrinkle Killer Snake Serum," which it said "helps tackle the signs of ageing, [and] leaves the skin looking younger." Groupon defended the ad to the industry-run Advertising Standards Authority by saying it made only claims of "temporary effects" and "sensory effects," which do not normally need to be proven. In other words, this was just a moisturizer.
The ASA disagreed, noting that the term "wrinkle killer" implies a long-lasting impact. It banned any further snake oil ads. A repentant Groupon now says it has "further improved our checks and processes." It's also banked $700 million from its IPO since the ad ran. Its shares haven't risen a dime in its nearly three months on the stock market, but Groupon can at least afford to stop selling snake oil now. How nice.
[Image of Groupon CEO Andrew Mason via Getty Images.]