This week, leading lawyers, legislatures and marketers attended the 35th Annual Brand Activation Association (BAA) Marketing Law Conference in Chicago. At BAA I gave a presentation titled, “Journey to the Center of Advertising Law: Knowledge, Insights, and Practical Tips on The Most Important 2013 Advertising Developments.” Over the next few days, I will share with you three video clips from my presentation. Let’s dive into the first one…

How do we determine “reasonable consumer” behavior?  This is an increasingly important question in a world where the consumer population comprises people with differing views, perspectives, education levels, and experiences.  The “reasonable consumer” is crucial in advertising law:  this person interprets advertising, determines what claims are actually being made, decides whether there are any implied claims, decides whether a statement is “puffery,” and helps courts decide whether advertising is ultimately misleading or deceptive.

The FTC’s 1984 Policy Statement on Deception states that “deceptive” advertising must be likely to mislead a “consumer acting reasonably under the circumstances in a material respect.”  A key principle, however, is that the standard will be affected by the target audience of the advertising.  For example, an advertisement for a high-end sports car might be evaluated based on a reasonable member of the target audience of males between the ages of 45 to 60, with income above $150,000 a year.

So, once we have identified our reasonable consumer, how does he or she make her decision?  According to the FTC, he or she makes purchasing choices based on a common sense “net impression” of the advertising and all its constituent elements.  This impression must be “material” to his or her purchasing decision.  For example, in the now infamous POM Wonderful case, the FTC found that the interaction of various statements such as “eight ounces of POM juice can help prevent heart disease,” together with imagery of the juice bottle with a noose around the neck, created an overall net impression in the eyes of the reasonable consumer that drinking POM could prevent heart disease and other illnesses.

Now, does this mean advertisers are responsible for all “net impressions,” and moreover, responsible for what every single consumer might think?  No.  Rather, the government looks to see if the reasonable person includes at least a “significant minority” of the target demographic.  And what about intent?  Unfortunately for advertisers, even if it is undeniable that the advertiser never intended to communicate the message that a significant minority of reasonable consumers takes away, the advertiser is still responsible for that claim.  So, advertisers need to always keep the “reasonable consumer” – and what he or she might take away from an advertisement – in the back of their minds.

Ronald R. Urbach is the Chairman of leading advertising law firm Davis & Gilbert LLP