Under the FTC Act, advertising must be truthful and non-deceptive, advertisers must have evidence to back up their claims and advertisements cannot be unfair. Ad content is deceptive if it misleads reasonable consumers and is material to a consumer’s decision to purchase a product. An advertisement is unfair if it causes substantial unavoidable injury that is not outweighed by its benefit to consumers.
Below, we discuss seven points to consider when making or reviewing advertising materials or claims.
1. The Primary Objective: Truth in Advertising
A determination of the truthfulness and non-deceptiveness of an ad is determined based on the entire impression that the advertisement conveys.
Express and implied marketing claims are equally important, and even implications made by advertisers must be truthful, non-deceptive, substantiated and not unfair. The FTC provides examples of express and implied advertising claims:
- Express: “ABC Mouthwash prevents colds” is an express claim that the product will prevent colds.
- Implied: “ABC Mouthwash kills the germs that cause colds” contains an implied claim that the product will prevent colds.
In the examples above, both claims require the same substantiation.
Importantly, an advertiser cannot cure a false claim by use of a disclaimer. Generally speaking, a disclaimer cannot contradict other statements made in the ad. Instead, any qualifying information needed to prevent deception “should be presented clearly and conspicuously so that consumers can actually notice and understand it.”
Moreover, the FTC provided guidance to marketers on how to present information in ads to prevent an advertisement from being deceptive:
- advertisers should use clear and unambiguous language,
- advertisers should place any qualifying information close to the claim being qualified, and
- advertisers should avoid using small type or any distracting elements that could undercut the disclosure.
2. Marketers Need Reasonable Substantiation for Material Claims
A marketer must have reasonable substantiation for any material claim made in an advertisement, and such substantiation must be available when making the claim. Developing substantiation after making a claim may not be sufficient.
Appropriate substantiation requires objective evidence to support the claim, but the amount and type of evidence depends on the claim made.
At a minimum, if an advertisement claims a particular level of substantiation (for example, “two out of three doctors recommend” or “tests prove”), an advertiser must have that level of substantiation. If the advertisement does not specify a level of support, reasonable substantiation may be based on a number of factors, including input from experts in the field.
3. Claims Regarding Health Benefits Require Heightened Substantiation
Some ads, such as those that make claims directed to health or safety, require a higher level of substantiation. The FTC has provided examples of health or safety claims:
- ABC Sunscreen will reduce the risk of skin cancer.
- ABC Water Filters remove harmful chemicals from tap water.
- ABC Chainsaw's safety latch reduces the risk of injury.
In addition, courts have found that marketing claims directed to “pain” relief require a heightened level of substantiation.
Regarding the level of substantiation required, the FTC has stated:
Ads that make health or safety claims must be supported by "competent and reliable scientific evidence" — tests, studies or other scientific evidence that has been evaluated by people qualified to review it. In addition, any tests or studies must be conducted using methods that experts in the field accept as accurate.
In addition, at least one court has specified the heightened level of substantiation required for health-related claims: “In the instant case, with medical, health-related claims, a well-conducted, placebo-controlled, randomized, doubleblind study, the gold standard, should have been conducted.”
4. Proper Use of Trademarks
Advertising claims including trademarks generally involve two situations: (i) use of the advertiser’s own trademarks or (ii) use of third-party trademarks. When using its own trademarks, a marketer should be sure to adhere to internal guidelines for use of its trademarks. Such guidelines may instruct, for example, on consistent methods of use, on use of a trademark as an adjective and not a noun, and whether a “®” or “TM” designation should be used with the mark.
When using trademarks of third parties, pay additional attention in order to avoid consumer confusion as to origin or endorsement of the advertised products or services. Generally, a marketer can use a simple disclaimer to clarify third-party trademark ownership and non-affiliation.
An advertiser must take still more care regarding use of a third-party mark in comparative advertising. A competitor would surely examine very closely any such use and any claims associated with such use. Advertisers must not make any misrepresentations about either a competitor’s product or the advertiser’s own product.
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