As I mentioned a few weeks ago, Davis & Gilbert produced our 2014 Lessons Learned/2015 Practical Advice, where our lawyers highlight major developments in the marketing communications industry, and offer tips and best practices for marketers and their agencies in 2015. To view the full 2014 Lessons Learned/2015 Practical Advice document, click here. This week, I wanted to share with you the section I co-authored on the National Advertising Division of the Council of the Better Business Bureaus (NAD).
Despite recent news reports implying that marketers are taking disputes to federal court with greater frequency, 2014 proved to be another banner year for the NAD. Eighty-eight competitor challenges were filed with the NAD in 2014 – a considerable increase from 2013. Challenges involving dietary supplements, drugs and health aids, and telecommunication products and services were the most common.
While the vast majority of NAD challenges are either brought by competitors or by the NAD itself, 2014 served as a reminder that consumers and advocacy groups may also bring NAD challenges. The Animal Legal Defense Fund challenged a tuna company’s claims that its products were “dolphin safe” and sustainably caught. The marketer refused to participate in the process and the NAD referred the matter to the Federal Trade Commission, the California Department of Consumer Affairs and the California Office of the Attorney General. The NAD also reviewed a consumer challenge asserting that the U.S. Postal Service had failed to properly disclose the numerous limitations associated with its claim that “$50 insurance [is] included in Priority Mail service.” In its decision, the NAD instructed the marketer to clearly and conspicuously disclose the restrictions associated with its insurance offer and, in so doing, provide consumers with examples of what constitutes payable and non-payable insurance claims.
NAD challenges involving product disparagement were particularly common. In one decision, the NAD determined that knocking over a box of NyQuil Cold & Flu was not disparaging because it simply reinforced the commercial’s truthful message that NyQuil, unlike the marketer’s competing product, cannot relieve a stuffy nose. In another, the NAD concluded that a marketer’s claim that “we peel our tomatoes with steam, not lye” conveyed the unsupported and inaccurate message that lye-peeled canned tomatoes are unsafe or unhealthful. Accordingly, the NAD recommended that the marketer discontinue the claim or make clear that lye-peeled tomatoes are neither unsafe nor unhealthy.
The Way I See It
- Marketers and their agencies should recognize that complaints from consumers and advocacy groups ultimately can result in a full-fledged NAD proceeding.
- Disclosures must be clear and conspicuous and presented in a manner that is readily understandable to the audience to whom the advertising is directed.
- While marketers may distinguish their products from their competitors by touting certain benefits and/or innovations, these claims cannot falsely imply that a competitor’s product is ineffective, unsafe and/or unhealthy