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A Review of Recent National Advertising Division Cases September 11, 2012 David G. Mallen National Advertising Division Deputy Director
A Review of Recent National Advertising Division Cases
September 11, 2012
David G. Mallen
National Advertising Division
Deputy Director
The Advertising Industry’s Self-Regulatory System
1971 - The Self-Regulatory System formed as a response to consumer activists pushing for increased government regulation of the advertising industry
Six major advertising and marketing trade associations and the Council of Better Business Bureaus form the self regulatory system.
Advertising Self-Regulation
ASRC
Establishes policies for the
self-regulatory structure
NAD
Resolves issues as to the truth and accuracy of national
advertising claims
NARB The appellate body of the
self-regulatory forum
CARU Analyzes and evaluates
advertising directed to children under 12
ERSP Resolves issues as to the truth
and accuracy of claims made in direct marketing
Children’s Food and Beverage Advertising Initiative
How is an NAD Inquiry Initiated?
• Competitors
• Consumer complaints
• Referral by local BBB
• NAD monitoring program
• Trade associations
• Advocacy groups
• Federal Trade Commission
How The Process Works
• Complaint letter written by the “challenger”
– Identify the advertising and set forth why claims are false or misleading
– Include relevant evidence such as product testing or evidence of consumer perception
• Two Rounds of Evidentiary Submissions
• Meetings with NAD
• NAD decision
NAD Case Reports
Available via online subscription at: http://www.asrcreviews.org
Archives serve as a research tool: Legal, Marketing and Science
Issues and Claims
• Puffery
• Consumer surveys
• Product testing
• Testimonials
• Pricing
• Disclosures
• Green Claims
• Social Media
NAD Analysis
• What are the claims being made?
– Expressed Claims
– Implied Claims
• What is the support for the claim?
• Is it a good fit?
Health & Nutrition Claims
Sunny Delight Beverage Co (Fruit 2O Essentials) Case #5182 (May 2010).
“More than 99% Natural Ingredients”
Heartland Sweeteners LLC (Ideal Sweetener) Report #5125 (December 2009)
Green Claims
Old Generation: • General
Environmental Benefit
• Biodegradable • Recyclable
New Generation: • Renewable Energy • Seals & Certifications
NAD and Green Marketing
• FTC Green Guides apply when advertising to the trade.
• Ecologic, NAD Case # 5388 (2011)
The organic additive that renders plastics products biodegradable
Product Disparagement and User Generated Content
LaLa USA (La Crème), NAD Case # 5359
Puffery
“…a seller's privilege to lie his head
off, so long as he says nothing
specific, on the theory that no
reasonable man would believe him,
or that no reasonable man would be
influenced by such talk."
Comparative Product Testing
LG Electronics USA, Inc. NAD Case #5416 (2011)
Consumer Surveys
Based on consumers who are
very satisfied with their current
TV Provider
Taste and Preference Claims
Preferred over the Leading Meat Lasagna*
*Preferred over the leading frozen 21 oz. lasagna with meat and sauce
Apples to Oranges Comparisons
• Three Meat and Four Cheese Lasagna vs. Meat and Sauce Lasagna
• 31 oz. product vs. 19 oz. product
• Line Claim?
• Disclosures
• Sensory Testing
NAD Case Report # 5400 (2011)
“
Coastal Contacts, Inc., #5387, NAD/CARU Case Reports (October 2011).
What does it mean to “Like” a company on Facebook?
Endorsement?
“This one has the most friends.”
• NAD case reports are available via online subscription at: http://www.nadreview.org/
• Search by issue, company, date or key phrases
NAD Case Reports
