(The iSpot data reflect the list price of TV ad space, and don’t account for any discounts.) Lumosity has paid for only about $541,000 worth of TV ads so far this year, compared to about $11.8 million during the same period last year, according to the media research firm. Since settling with the FTC in January, Lumosity has retrenched. The company’s website, for instance, used to claim that the brain training could “ward off cognitive decline.” One ad featured a man who suffered from a stroke “and now uses Lumosity to regain lost mental function.” TV advertising plunges The FTC charged that Lumosity oversold the benefits of the games. The privately held company, based in San Francisco, has drawn in 70 million people over the past decade to play games that challenge users to remember sequences of brightly colored animations, or to ignore visual distractions and click only on certain objects. In May, the marketer of the LearningRx suite of brain-training games agreed to a $200,000 settlement for making false claims about what the games could do to improve conditions like ADHD and Alzheimer’s disease.īut Lumos Labs is the biggest player, by far, targeted by federal regulators.
The FTC has moved against other digital health tools, too. Meanwhile, the Federal Trade Commission is preparing to send out rebates to thousands of customers who may have been drawn to Lumosity by its misleading ads. The agency has verified 13,000 requests for refunds, which will be funded by $2 million from Lumosity, but has yet to disclose how much each customer will receive. It is facing sharp questions about its much-touted research, which found that users enjoyed a bump in IQ. And there are signs that the growth of Lumosity’s once impressive mobile app business may have stalled.
The company behind the Lumosity brand, Lumos Labs, has dramatically cut back on TV advertising. The brain-training giant Lumosity is recalibrating its strategy and facing new challenges as it reels from a federal crackdown on bold health claims about its digital games.
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