February 28, 2023

What are Comparative Advertising Claims?

Digital marketers often seek to position their products against a competitor's products.

These claims are known as comparative claims because they claim either that the advertisers' products are at least as good as a competitor's products (parity), or even that they are better than a competitor's products (superiority).

Does the FTC favor comparative claims in advertising?

The FTC likes comparative claims, provided they don't constitute false advertising (a violation of the federal Lanham Act).

According to the FTC: "Comparative advertising, when truthful and non-deceptive, is a source of important information to consumers and assists them in making rational purchase decisions. Comparative advertising encourages product improvement and innovation and can lead to lower prices in the marketplace."

In order for a competitor to bring an action as a plaintiff for false advertising under the Lanham Act, the competitor must be able to prove the following:

• The claim was false or misleading (deceptive) about the competitor's product;
• The claim deceived, or could deceive, a substantial segment of consumers;
• The deception was material (it was likely to influence a purchase decision);
• The competitor's product was in interstate commerce; and
• The competitor (plaintiff) was likely to be injured by the claim.

How to substantiate a "we're #1" marketing claim

In 2019, NAD decided 2 cases involving so-called “We're #1” claims.

The type of data used to substantiate these claims was the key to victory for both claimants.

Comparative marketing case #1 and how it can help you

Case #1: Regarding Reckitt Benckiser's Claim: “#1 Carpet Cleaning Brand”.

NAD noted that the claim is a superiority claim that is generally understood to mean that the claimant, as opposed to a competitor's specific product, has the highest market share in its category.

So, what type of data will establish market share superiority – sales of product units or sales in terms of dollars?

Reckitt Benckiser used Nielsen data that tracks the number of product units sold to consumers to establish market share leadership... and NAD agreed that market share data was the key metric, not sales in terms of dollars.

The takeaway for Case #1: product units beat dollars.

Comparative marketing case #2 and how it can help you

Case #2: Regarding Sensodyne's Claims:

• “#1 Dentist Recommended Brand”; and
• “9 out of 10 dentists recommend Sensodyne".

NAD found that these claims were substantiated for consumers with sensitive teeth.

So, the issue wasn't substantiation; consumer perception surveys substantiated the claims.

Limiting the scope of your digital adverting claim can save your bacon.

Instead, the issue raised by the challenger was that the claims weren't sufficiently limited to consumers with sensitive teeth.

NAD found that Sensodyne's product packaging limited the scope of the claims to consumers with sensitive teeth.

NAD also noted that Sensodyne was generally recognized as targeting consumers with sensitive teeth.

Takeaway

Consumer perception surveys + a scope limitation for the claims were the keys to victory.