Long time readers of this blog may remember my Subway Series, where I would share my thoughts about interesting ad law issues triggered by ads I'd see on my morning commute. During the pandemic lockdown, this series morphed into the Not On The Subway Series, where I talked about digital ads that intrigued me and, then, once I started commuting again, morphed again to the Back on the Subway Series. Admittedly, the subject of today's blog post is not an ad I saw on the subway, but a newsletter I read while commuting on the subway. (Seems like a good enough excuse to re-launch the series, which this ad law nerd enjoys writing.)
So, today, I read a piece in a newsletter published by one of the ad monitoring organizations (hint: not NAD). The article took aim at an advertiser because it failed to provide information about its substantiation in the ad itself or on its website.
Was it required to do so?
Not to bury the lede, the answer is generally no. An advertiser must have competent and reliable evidence that provides a reasonable basis for its claims. What evidence suffices as substantiation depends on a number of factors, including the type of claim, the product, the consequences of a false claim, the benefits of a truthful claim, the cost of developing substantiation for the claim, and the amount of substantiation experts in the field believe is reasonable. But the advertiser doesn’t -- as a general rule -- have to state its proof, or describe its substantiation, in its ads.
What is the big exception to this general rule? The advertiser should state the basis for its claim in the ad itself when the evidence is material to the claim, i.e., when the information would be important for the consumer to know because it might qualify or contextualize the claim. An example would be if the claim is based on consumer testing rather than on clinical testing and that's potentially relevant to the claim, or if the testing was done on a limited subset of the relevant products, or if it was conducted a couple of years earlier than the ad's publication. Assuming it is even appropriate for the advertiser to make the claim based on the substantiation it has, a description of the substantiation could be pertinent information for the consumer in order to evaluate the claim. In those circumstances, the advertiser should include enough information its ads about its support in order to properly qualify the claim.
Another exception to the general rule may be a statutory or regulatory requirement for the specific type of claim at issue. For example, some states require a company advertising a consumer rebate to "do the math" in its ads, i.e., show the price to be paid by the consumer, along with the net (post rebate) price. This is effectively a requirement that the advertiser to show the "proof" of its (price) claim in the ad.
But if describing the substantiation is not necessary to qualify the claim or is not statutorily required, and, therefore, there is no need for the advertiser to include it, might it want to do so anyway?
The most common reason for including information in an ad that describes the advertiser's substantiation (when not otherwise necessary to qualify the claim) is the credibility factor: including information about its substantiation signals to consumers that the claim is real and has support. It is credible. It also signals the same to competitors, which can be useful in discouraging a challenge, particularly if the challenger relies on the same type of support for its own claims (like, a particular type of testing, or a specific third party's ranking or rating, or IRI data).
One thing is clear, however: failure to state the basis for a claim in an ad is not the same as failing to actually have the basis for a claim. Unless statutorily required for the specific type of claim at issue, only the latter is a violation of advertising law.