Advertisers in the Ring – a Roundup of This Month's Competitor Advertising Challenges: (NAD Hunkers Down in January with Cold Medicine, Water Filters and TV)
The National Advertising Division (NAD) serves as a forum for advertising competitors to challenge false or misleading claims in an out-of-court process, in attempt to resolve disputes without the risk of monetary damages. While participating in NAD proceedings and compliance with its rulings are voluntary, failure to comply may result in FTC action. Accordingly, NAD decisions are important in their own right, and as a potential barometer for broader trends in advertising challenges and decisions. The below provides a high level summary of NAD decisions from the past month. A summary of last month's NAD decisions can be found here.
It is January, and from the looks of it, NAD's docket is ready for winter. Since December 25, 2014, NAD has only reported a few case decisions, but they include some significant decisions regarding cold medicine, water filters and television service.
Cold Medicine: Literally True Claims Can Still Be Misleading
Bayer Consumer Care: Alka-Seltzer Plus® Night Cold & Flu, Case No. 5800 (Jan. 7, 2015). Bayer ran advertising comparing its cold medicine to competitor Nyquil Cold & Flu Liquid Gels, with such claims as "I have a cold, I took Nyquil, but I'm still stuffed up" and "The truth is Nyquil Cold & Flu Liquid Gels don't unstuff your nose." NAD determined that while the express claims were literally true, the advertiser compared its product to a dissimilar Nyquil product when a Nyquil product containing the same ingredients was available. Based on the comparison and the context of the commercials which sometimes only referred to "Nyquil," the advertiser misleadingly implied that no Nyquil products contained a decongestant. Because the visuals of the ad did not sufficiently narrow the reference to "Nyquil" to the single version of Nyquil being compared to, this is considered a misleading "line claim," and thus, NAD recommended that the advertising be discontinued.
Water Filters: Competitive Claims Require Support Beyond Individual Product Performance
Sawyer Products, Inc.: Hollow Fiber Membrane Water Filters, Case No. 5797 (Dec. 30, 2014). The advertiser made claims regarding the longevity of its point of use water filters, and their ability to remove pathogens and bacteria from water, making lake and stream water potable and safe to drink. Specifically, however, the advertiser made the eye-popping claim that its filter had a useful service life of 1 million gallons, and that it was "the only filter on the market that easily and effectively removes bacteria." It based the theoretical capability of this filter design, but it had no actual filter life testing. The advertiser also failed to provide any testing on whether competing products could "easily and effectively remove pathogens," so it did not have support for its claim that it was the "only" filter that could do so. Unsurprisingly, NAD recommended these claims be discontinued due to the lack of substantiation.
TV Subscriber Services: Not All Comparisons Result in a Claim About a Competitor
Verizon Communications: Verizon FiOs Quantum Television Service, Case No. 5796 (Dec. 29, 2014). Verizon ran advertisements touting its FiOs Quantum services in a TV spot where a comedian repeatedly tells his nephew that the current provider they have can't provide certain benefits. According to Cablevision, the advertisements clearly referred to its service, despite the fact that it was not directly named, as Cablevision is the largest incumbent provider in the New York region. The ads, argued Cablevision, misleadingly suggested that Cablevision Optimum service did not allow subscribers to record 12 shows at once, watch TV on the go or save many hours of programming, while implying that all FiOs subscribers could do so. In reality, argued Cablevision, only subscribers to FiOS's most expensive tier of service would receive all of these features.
NAD considered the net impression of the advertisement, and in the absence of a consumer perception survey, used its own judgment to determine the messages reasonably conveyed to consumers. NAD concluded that the commercial did not reasonably refer to a specific comparison against Cablevision, as it did not refer to the company or to "cable," and did not show visuals or languages suggestive of Cablevision's products. It went on to conclude that the claims suggesting that FiOs Quantum could offer advanced features better than some basic DVR options, which was reasonably supported. However, NAD did recommend changes to some additional claims, such as that FiOS had the ability to "save every cartoon" (the DVR only stores up to 200 hours of programs)."
Takeaways for this Month
The start of 2015 echoes a theme from the 2014 NAD conference: back to basics. When referring to a competitor's line of products either by name, or indirectly, the advertiser must be careful to specify the object of the comparison, lest it make an unsupported "apples to oranges" claim.
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