NAD Recommends Verizon Discontinue the Advertising Claim ‘FiOS TV rates #1 in HD picture quality,’ Finds Advertiser’s Marketing-Trends Survey Inadequate to Support Comparative Claim

New York, New York – Dec. 1, 2011 – The National Advertising Division of the Council of Better Business Bureaus Claims has recommended that Verizon Communications, Inc., discontinue the following advertising claim:

• “FiOS TV rates #1 in HD picture quality*,”

(*June 2010 Proprietary survey conducted by ChangeWave Research, based on HD picture quality ratings among a panel of educated consumers, for more on ChangeWave Research visit www.changewaveresearch.com).

The claim, which has appeared in broadcast and Internet advertising, was challenged before NAD, the advertising industry’s self-regulatory forum, by Comcast Cable Communications, Inc. In this case, NAD examined the purpose of the June 2010 ChangeWave survey and weighed whether the survey results served to support the advertiser’s claim. NAD noted in its decision that the ChangeWave survey respondents asked “how would you rate the HD picture quality of your TV service provider.”  Respondents were not asked to view the parties’ respective HDTV services in a controlled environment and rank them accordingly, as the challenged claim implied.

NAD determined that other criteria necessary for a proper evaluation of a study were absent, including information about how much and what type of HD programming respondents watch and what size and type of television sets they use to watch HD programming. NAD has previously recognized ChangeWave as an independent, respected research company and has concluded in previous cases that ChangeWave studies may, in certain circumstances, be used to support a properly crafted advertising claim.

In this case, however, NAD found that the claim at issue conveyed the message that Verizon FiOS’ “#1” ranking resulted from a consumer preference study of HDTV picture performance, conducted with participants who viewed the picture quality offered by competing providers in a controlled environment and then ranked providers. “It is undisputed that no such comparative ranking was ever performed,” NAD stated.

Following its review of the evidence in the record, NAD determined that head-to-head testing was required to substantiate a subjective comparative HD picture quality/rating claim, and that the results of ChangeWave’s stand-alone questioning of survey respondents about their own service provider did not provide a reasonable basis for  comparative claims of this type.  Because the ChangeWave survey evidence was insufficient to provide a reasonable basis for its “Rated #1 in HD Picture Quality” claim, NAD recommended the claim be discontinued.

Verizon, in its advertiser’s statement, said that the company “understands that NAD’s decision concerned the specific claim at issue in this challenge, and it will consider NAD’s recommendations in any future ‘Rated #1 in HD Picture Quality’ claim.”

NAD’s inquiry was conducted under NAD/CARU/NARB Procedures for the Voluntary Self-Regulation of National Advertising.  Details of the initial inquiry, NAD’s decision, and the advertiser’s response will be included in the next NAD/CARU Case Report.

About Advertising Industry Self-Regulation: The National Advertising Review Council (NARC) was formed in 1971. NARC establishes the policies and procedures for the National Advertising Division (NAD) of the Council of Better Business Bureaus, the CBBB’s Children’s Advertising Review Unit (CARU), the National Advertising Review Board (NARB) and the Electronic Retailing Self-Regulation Program (ERSP).

The NARC Board of Directors is composed of representatives of the American Advertising Federation, Inc. (AAF), American Association of Advertising Agencies, Inc.,  (AAAA), the Association of National Advertisers, Inc. (ANA), Council of Better Business Bureaus, Inc. (CBBB), Direct Marketing Association (DMA), Electronic Retailing Association (ERA) and Interactive Advertising Bureau (IAB).  Its purpose is to foster truth and accuracy in national advertising through voluntary self-regulation.

NAD, CARU and ERSP are the investigative arms of the advertising industry’s voluntary self-regulation program. Their casework results from competitive challenges from other advertisers, and also from self-monitoring traditional and new media. NARB, the appeals body, is a peer group from which ad-hoc panels are selected to adjudicate NAD/CARU cases that are not resolved at the NAD/CARU level. This unique, self-regulatory system is funded entirely by the business community; CARU is financed by the children’s advertising industry, while NAD/NARC/NARB’s primary source of funding is derived from membership fees paid to the CBBB. ERSP’s funding is derived from membership in the Electronic Retailing Association. For more information about advertising industry self-regulation, please visit www.narcpartners.org.