Champions for Truth in Advertising
Jan 27, 2021, 14:43 PM by Clint Perez, originally published on Medium
The National Advertising Division (NAD) was established in 1971 in response to growing American consumerism and Government pressure to regulate the advertising industry. Preferring self-regulation to Government oversight, advertising industry leaders adapted the British model for self regulation forming a two-tiered system that included NAD and the National Advertising Review Board (NARB). NAD would hear cases on advertising disputes and NARB would mediate any appeals. Both consumers and consumer advocacy groups were quick to test the newly established system. Advertisers themselves soon followed with their own challenges of competitor advertising. The first NARB case recommending advertising be discontinued in response to a competitor challenge found that “Kal Kan dog food advertising ‘permeated with false disparagement and unsubstantiated claims’ directed at a competitor, Alpo.”
Today, NAD continues to carry the torch for Truth-in-Advertising. As the advertising landscape has evolved over the last 50 years, NAD has continued to adapt to new products, new industries and new advertising media. “NAD is stronger than ever. We have a long track record of effectively resolving advertising disputes and serving the consumer interest,” says Laura Brett, Vice President of NAD, and New York Office Lead for BBB National Programs, “I’m proud to serve our mission.” Laura shares her thoughts on some current industry trends as well as how NAD is adapting to an ever changing marketplace.
Tell me about the National Advertising Division. What is your mission?
The National Advertising Division, NAD for short, is actually celebrating its 50th anniversary this year. NAD was established in 1971 by organizations representing the advertising industry, charged with independent responsibility for monitoring and reviewing national advertising for truthfulness and accuracy.
We review hundreds of advertising claims each year across all media. Our decisions set consistent standards for advertising truth and accuracy, delivering meaningful protection to consumers and leveling the playing field for business. We appreciate that more than 90% of companies receiving our case decisions elect to make voluntary changes to their advertising based on our guidance. Companies respect and participate in the self-regulatory process because they understand that the U.S. economy is built on a fair and transparent product marketplace.
How does NAD decide which issues to focus on? What’s the process for mediating them?
There are two main ways cases are usually opened. First, we open a matter when advertising is challenged by a competitor or other third party. Second, we open a matter through our own independent monitoring program after analyzing the impact that certain advertising, or issues it raises, has on trust in advertising.
The criteria we consider includes, whether it:
- Targets a vulnerable population (elderly, children, special needs, etc.);
- Capitalizes on consumer fears or misunderstanding;
- Fills a gap in regulatory efforts of the FTC and state AGs;
- Addresses novel or emerging issue of interest for the advertising industry;
- Concerns claims that consumers cannot evaluate for themselves;
- Achieves diversity among industries that historically participate in self-regulation.
We’re going to jump right in with some hot topics.
The first has to do with the self-regulation of speech on social media. Is this going to happen?
Social media platforms employ a variety of tools to address misleading content, including hiring tens of thousands of content reviewers, providing just-in-time context, increasing transparency around their actions, and even setting up their own appeals structures. All those tools have been effective to differing degrees and remain necessary and important.
As social media evolves constantly, there is always more to be done. I’m excited that NAD recently partnered with Facebook to strengthen Truth-In-Advertising enforcement on their U.S. platform. What this allows NAD to do is to share case outcomes addressing Facebook advertising directly with Facebook, allowing Facebook enforcement teams to then act on those ads if they determine that the advertising violates their policies. The result will be to encourage ethical practices among advertisers and a stronger, more robust system of self-regulation.
What sort of issues is the coronavirus pandemic presenting as it relates to truth in advertising?
At the outset of the pandemic we saw a lot of misleading advertising claims for products that would prevent, treat, or cure COVID-19. Strong and quick actions against companies making misleading claims were taken by federal and state authorities, as well as our advertising system of self-regulation. Between NAD and another division at BBB National Programs, the Direct Selling Self-Regulatory Council, we addressed nearly 100 instances of companies making misleading claims to prevent, treat, or cure COVID-19.
As the pandemic persists, we now see emerging issues arising around online commerce and how consumers are interacting with platforms. The questions we are asking revolve around whether consumers know when they are looking at advertising and whether they understand the material terms of a purchase before they make the purchasing decision.
Influencer marketing is another popular form of promoting one’s brand. What sort of issues does this present?
The two main issues in influencer marketing are transparency and truth, the same two issues I highlighted above related to online commerce more generally. Do consumers understand when an influencer has a material connection to the product they are promoting? Is the influencer promoting the product in a truthful way? For example, when the influencer touts a product, is it a product they really use and enjoy? And are the benefits they tout about the product supported.
5G finally seems to have arrived. What do consumers need to watch out for here?
We have had several matters at NAD related to 5G advertising. In general, before consumers choose a carrier or buy a 5G capable phone, consumers should understand both the availability of 5G where they intend to use their phone and the capabilities of the 5G that is available in their area. 5G is unlike prior generation mobile technologies because the capabilities of 5G varies based on the spectrum that is deployed to support it. 5G is very different when it is deployed on low band, mid-band, or high-band spectrum. Low band spectrum provides broader coverage but slower speeds than high-band spectrum.
Finally, you just added Fast-Track SWIFT as a filing option for mediating less complex claims. Tell me about that.
NAD continues to grow and evolve with the marketplace. We developed this filing option in response to our community who was asking for faster, more efficient resolution. We feel that Fast-Track SWIFT meets the compelling need for quick resolution of truth and transparency issues that arise in digital advertising. This expedited process reviews the prominence and/or sufficiency of disclosures in influencer marketing and native advertising as well as other advertising truth and transparency issues that do not require complex claim substantiation. And, case decisions are delivered within 20 days of filing.
To learn more about NAD, or to file claim, visit: https://bbbprograms.org/NAD
Reference: Zanot, Eric J. “The National Advertising Review Board, 1971–1976”, Journalism Monographs no. 59, February 1979.
Editor’s Note: The author was working on a project at the National Advertising Division at the time of publication. This commentary reflects both interview content from before the project began and some information gathered during the project.
This content was originally published on Medium.