Madison Ave Insights

New FTC Green Guides Signal Change Ahead for Marketers

Posted in Advertising, Environmental

Advertising Week is in full swing and is already full of surprises. On Monday, the Federal Trade Commission (FTC) released the details of its updated Green Guides to attendees of the National Advertising Division (NAD) Annual Conference, before even announcing it to the press – talk about a scoop! It was exciting for all who were there and who work in developing environmental marketing claims. We have been eagerly awaiting the new Green Guides for over 2 years. With thousands of comments from industry groups, environmental advocates, academics and others during the review process, there were certainly a lot of people watching and waiting. The FTC is trying to put out guidance that set a balance between the firmness needed to help reduce “green washing” and the flexibility needed to allow advertisers to develop new and novel claims as environmental sciences and technologies advance in ways we cannot yet anticipate.

Certainly one of the most controversial parts of the new Green Guides, and the one that will likely cause marketers the most headaches initially, is the de facto ban on unqualified general environmental benefit claims, such as “green” or “environmentally friendly.” All such claims must now be qualified with the specific environmental benefit. Moreover, if the claim is that the product is more environmentally beneficial overall, the advertiser must analyze the trade-offs resulting from the attribute in order to prove the claim. This should result in visible changes in how many of today’s “green” products are marketed. Yet, the FTC believes that this new approach will likely benefit the marketplace by allowing consumers to make more informed choices.

There may be more trouble ahead for green marketers, but not just because of the Guides.  The Green Gauge survey by GfK released last week found consumers are not so willing to pay more for green products – including a 5 to 12 point drop in the percentage of consumers willing to pay more for eco-friendly cars, biodegradable plastic packaging, energy-efficient light bulbs, electricity from renewable resources, or clothing made of organic or recycled materials, as reported by AdAge.  So a question yet to be answered, will the new Green Guides signal  to marketers that it is time to double down on environmental claims? The FTC has said that it is not the role of the FTC to stimulate or foster companies to make green products and environmental claims, but to ensure that when they are made, they are truthful and accurate.

The Way I See It

  • I see the use of environmental benefit claims increasing as the economy recovers and consumers feel more comfortable making purchasing decisions on factors other than price.
  • I see the reality of climate change forcing consumers to focus on environmental issues, including products that have an environmental benefit.
  • I see the global economy influencing the taste of US consumers to be more environmentally sensitive in their purchase decisions.
  • I see the FTC ramping up its enforcement activities in the area of green marketing over the next year.