March 7, 2023

Essential Substantiation Steps

We'll discuss the 3 steps you need to follow as you undertake your substantiation process according to NAD (an acronym for the National Advertising Division of the Better Business Bureau's National Programs).

NAD is an independent self-regulatory forum that reviews advertising in response to competitor challenges or on NAD's own initiative to examine the fit between the challenged claims and the substantiation provided. 

NAD closely follows FTC precedent and policy.

Step 1: consider the product (and the type of ad claim)

Certain products are subject to specific regulations such as food and dietary supplements.

In addition, there are specific types of claims that require specific types of substantiation, such as comparative and typicality claims (to be discussed later).

Step 2: examine all the advertising conveys to reasonable consumers 

The objective is to determine Net Impression. We've already discussed the 5 elements of “net impression”.

You should evaluate each of these 5 elements to determine how together they reveal the net impression reasonable consumers take away from the ad.

Step 3: determine the appropriate level of substantiation (“reasonable basis)

Understand “reasonable basis” and evaluate what you need to support your ad claims.

This listing of 3-steps for substantiation is a brief summary.

We'll discuss more specific examples taken from FTC and NAD cases in future posts.

Takeaway

Understanding that Substantiation is required for net impression is the key.

Also required is an understanding of the 3 steps for developing substantiation.

In a nutshell (as described prior posts), net impression is the overall advertising message/takeaway understood by reasonable consumers, not what the advertiser intends the message to be.