Advertising Claims Substantiation: Legal, Marketing, and R&D Perspectives

Claiming your product is the best in the industry? Does it have superior service to a competitor? Or perhaps you want to claim that nobody can outperform your product? This kind of advertising copy requires claim substantiation. On January 25, 2018, Kyle-Beth Hilfer spoke at ACI’s Advertising Claims Substantiation Boot Camp. She moderated a panel discussing the key roles, responsibilities, and disciplines of the members of the advertising claim substantiation team.

Advertising Claim Substantiation Basics

Marketers may promote different kinds of claims about products.

• Superiority claims tout better performance than competitors or the product category. Examples: Product x outperforms product y. 8 out of 10 consumers prefer product x.
• Parity claims declare a product’s equivalent performance to competitors. Examples: No product beats us. Product x performs as well as product y for less money.
• Monadic claims are non-comparative claims about product performance. These include “up to” claims. Examples: Product x cleans 97% of bacteria. Save up to 35% off retail pricing.
• Puffery is a purely subjective statement about the product that no reasonable person would believe is literally true. Examples: World’s best pizza. Serving the best coffee. Sometimes, it is not so clear whether a claim is puffery. In a recent case before the National Advertising Division of the Council of Better Business Bureaus (NAD), the tribunal found that “Best feeling sunscreen ever” reflected a tangible attribute in need of substantiation.

 Pursuant to Section 5 of the FTC Act, commercial speech must be non-deceptive. Advertisers must be able to substantiate all reasonable interpretations of their express and implied claims before the advertising commences. The context of a claim is crucial for determining its net impression to the reasonable consumer. For example, if you claim to use superior products, showing a competitor’s product next to yours likely will require you to have substantiation against that competitor. If your study touts a specific product advantage that is not meaningful to the consumer, any implied superiority claim may be faulty. If comparing yourself to a competitor, you must take care that you are comparing similar products. Determining the scope of your advertising claims substantiation, then, is dependent on understanding how consumers understand the advertising message.

In addition, a brand is responsible for claims it disseminates as well as claims it adopts, in the form of testimonials from consumers. Advertisers must be careful to vet consumer content to ensure that product performance is not exaggerated. Otherwise, their advertising claims substantiation may be deficient for proving what the influencer says about product performance.In addition, if the endorsement or testimonial has been solicited in any way, the brand should mandate that the influencer disclose properly the material connection with the brand. To further meet these obligations, advertisers should have concrete understanding of the FTC’s Endorsement & Testimonial Guidelines.

The FTC and FDA require “competent and reliable scientific evidence” for advertising claims substantiation. Such evidence typically includes well-controlled, double blind studies that produce statistically and clinically significant and relevant results. The design of evidentiary studies may vary by category, geography, and the type of claim at issue. Industry standards, if they exist, may be helpful for designing a study, but sometimes, those standards are outdated. Generally, studies must have sound methodology for testing the actual products at issue. The test parameters must replicate actual consumer use of a product, and the findings must be relevant and meaningful to consumers.

The challenge for brands is to look at the testing they have to support claims, and if it is not above reproach, the marketing team needs to be creative. For example, it may be risky to offer a guarantee on consumer perceptions. Instead, a marketer could say that consumers will notice a difference.

Without proper advertising claims substantiation, a brand may face a legal challenge that its advertising is false or deceptive. The FTC, FDA, NAD, or state Attorneys-General may investigate or bring lawsuits. Competitors may bring challenges before the NAD or in court, and consumers may bring class action lawsuits.

 A Marketer’s View of Claim Substantiation

As part of the ACI Advertising Claims Substantiation presentation, Ms. Hilfer asked David Strauss of Marketing by Strauss about the marketer’s perspective in creating claims.

Q. How do you decide what kinds of claims you want to make about a product? For example, you could make an overt superiority, effective alternative, or comparative claim? What do you do to be sensitive to implied claims?

A. Great question. It starts with a deep understanding of your target audience. How aware are they of your product and the competitors’ products. What’s their perception of each offering? As a marketer, you don’t want to give a smaller competitor free advertising.  My preference is to start with a claim that positions my product as the best in the category on the attributes most valued by prospects. If my market share is significantly below that of the major competitor, then naming them as part of a comparative claim might be appropriate.

Q. How do adapt for a global advertising campaign? Do you consider different values and which claims will sell better in different countries?

A. Absolutely. There could well be a different set of cultural norms that affect how consumers in that country will view your product and your claim.  For example, while it’s not a claim, per se, Diet Coke as we know it was launched a Coca-Cola Light in Germany and other European countries.

Q. When do you typically get legal involved in evaluating a claim?

A. Legal should be involved as soon as there’s a proposed claim to review.  As you noted, the specific timing or point of interaction will vary based on an organization’s process and structural dynamic.

Q. How do you balance legal versus business risk in your own role as a marketer? What do you look for in terms of your lawyer’s understanding of both?

A. While my preference is to have the business stakeholder assess the business risk and legal stakeholder assess the legal risk, I’m certainly open to hearing any business risk articulated by the lawyer as long as he/she clearly understands the difference. In the end, the business side should weigh all the risks and make a decision as long as the legal risks are minimal.

R&D’s Perspective on Advertising Claim Substantiation

Ms. Hilfer also explored the processes that research and development teams use to substantiate advertising claims with Bart Briggs, Senior Engineer Engineering Excellence at Newell Brands.

Q. Which comes first the claim or the product testing?

A. Typically, the marketers identify an intended claim before R&D invests time, money, and project resources in testing to substantiate a claim. The claim will likely need adjustment after testing, when it may be discovered that the product is either under or over-performing. The cost of a mistake can be extremely high, and so marketing, legal and R&D must agree upon the validity of claim.

Q. Do you ever use enhanced testing of any kind, for example, for an overt superiority claim versus an effective alternative claim? What do you do to screen for implied claims?

A. We generally try to avoid superiority claims since 85% of the market needs to be beaten to make the claim. This requires a continuous cadence of testing since markets are constantly changing – i.e. you can be superior in one quarter and inferior the next. If implied claims are made, we ensure that there are enough escape words that it can’t be confused with an explicit claim. We also strive to capture the logic for the implied claim in any testing we conduct.

Q.How do you simulate real life product conditions in testing? How do you figure out what those are?

A. In my experience, humans are the least effective sensors – they typically cost the most to use and provide unreliable readings. For instance, on a recent food project, we had a user group judge the taste of a particular food type after preservation. In many instances, the group perceived a larger difference in the blind control than either of the two products that were being compared. However, marketing still pushed back several times on whether we could use the difference between the products, neglecting the fact that the groups perceived a larger difference for the blind control than actually existed. Legal, marketing and R&D finally came to consensus to remove the language for direct comparison and changed to a loosely worded implied claim with plenty of scientific backing.

Q. When do you typically get legal involved in evaluating a claim?

A. Legal, marketing, and R&D must all be in alignment before advertising claims are disseminated. By doing this, we avoid any allegations of intentionally shirking FTC compliance. Any time a safety issue is logged from our customer care team, or any time a competitor challenges a claim, the legal team becomes more deeply involved.

Hot Topics In Advertising Claims Substantiation

In 2017, we saw investigations or challenges related to certain types of claims repeatedly. At ACI’s Advertising Claims Substantiation conference, wide consensus held that these are likely to be hot topics for 2018:

• Safety claims
• Product efficacy, particularly for health related products
• Pricing claims
• Influencer testimonials
• Green or environmental claims
• Natural claims
• Made in USA

If you would like to learn more about whether your company has complied with all legal requirements for advertising claims substantiation, please contact us.