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© Practising Law Institute

INTELLECTUAL PROPERTYCourse Handbook Series

Number G-1239

Advertising LawInstitute

2015

Co-ChairsHolly A. GrochmalLiisa M. Thomas

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Varieties of Advertising Claims and How to Substantiate Them

Jordan M. Heinz Robin A. McCue

Kirkland & Ellis LLP

If you find this article helpful, you can learn more about the subject by going to www.pli.edu to view the on demand program or segment for which it was written.

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I. “BUCKETS” OF ADVERTISING CLAIMS

According to the American Marketing Association, an advertising claim is “a statement made in advertising about the benefits, characteristics, and/or performance of a product or service designed to persuade the customer to make a purchase.” All claims—unless they are puffery (see below)—must be properly substantiated.

A. Basic Nature of Claims

At the most basic level, all types of advertising claims are either express or implied.

1. Express Claims

An express claim makes an unequivocal representation about a product. Express claims can be proven with objective data. a. Example. “The Acme LightLift vacuum weighs 8 pounds.” b. Example. “The Acme filter removes over four times the amount

of dust as the leading vacuum’s filter.”

2. Implied Claims

Implied claims are implied by the entire context of the ad, and an advertiser generally has an obligation to support all reasonable interpretations of its ads. This includes not only the message the advertiser intended to convey but also messages that the advertiser may not have intended to convey.

• Example. Television commercials for a hair-thickening product for men showed “before” and “after” photos. The “after” photos showed hair that was not only thicker, but depicted hair in places that had previously been bald. The express claims in the commercial did not say the product could re-grow hair; they only said that the product would thicken hair and add volume. However, NAD decided that the photos implied that the product would grow hair on some bald spots. Because the advertiser could not substantiate the implied claim, NAD recommended that the advertiser stop using the “before” and “after” photos and disclose that its product does not re-grow hair. Youth Enhancement Systems, Inc. (ProCede), Case No. 4423, NAD Case Reports, 12/9/05.

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B. Non-Comparative Claims/Claims Touting Only Advertiser’s Product (“Monadic”)

1. Definition. A quantified non-comparative claim promotes only the advertiser’s product and claims a specific benefit.

2. Example. “Removes 99% of airborne particles.”

C. Comparative Claims

A comparative claim attempts to persuade the audience by com-paring the performance of two or more brands of a product or service. The advertiser may compare its brand to a previous formula, an unnamed competitor, or a named competitor. When making any type of comparative claim, it is important to keep in mind what are the up-to-date market conditions that may render a comparison inaccurate.

1. Superiority

a. Definition. Superiority (e.g., most effective) claims state expressly or imply that a product is the best in its category or in a specific area of performance.

b. Example. A TV spot states that the advertised vacuum “removes the most dirt per minute of any vacuum on the market.”

2. Parity (a.k.a. “Market Parity”)

a. Definition. Generally speaking, parity claims state expressly or imply that the advertiser’s product is equivalent in per-formance to those products to which it is compared.

b. Example. “No product picks up dirt better than the new Acme vacuum.”

D. Puffery

1. Definition. Puffery is a statement that does not require sub-stantiation. Puffery exists in two general forms: (1) an exag-gerated statement of bluster or boast that is not subject to proof; or (2) a statement that is subject to proof, but one that no consumer would reasonably rely upon.

2. Example. Court found that “Better Ingredients, Better Pizza” is puffery by itself, but could be a specific claim—requiring substantiation—when used in advertising that promoted

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specific ingredients. Pizza Hut v. Papa John’s Intl., 227 F.3d 489 (5th Cir. 2000).

3. Example. NAD considered two similar taglines for the same product. NAD considered the following extended tagline: “NyQuil. The nighttime sniffling, sneezing, coughing, aching, fever, best sleep you ever got with a cold…medicine.” NAD concluded that the tagline was mere puffery because it would be perceived by consumers as “an extension of the overall tone of the commercial” and not as a discrete superiority claim. NAD decided that the shorter version of the tagline—“NyQuil. Best sleep you ever got with a cold . . . medicine”—was a superiority claim and needed to be substantiated. Accord-ing to the NAD, the latter claim was not puffery because the “best” claim was linked with a specific product attribute—better sleep—which could be measured. Thus, the same claim can be either a provable substantive claim or mere puffery, depending on the “context of the entire advertisement.” The Procter & Gamble Co. (Vicks® NyQuil® and NyQuil Cough), Case No. 4499, NAD Case Reports, 5/23/06.

II. SPECIAL RULES FOR SPECIAL CLAIMS

A. Endorsements and Testimonials

1. Endorsement Guides. The FTC released revised FTC Guides Con-cerning the Use of Endorsements and Testimonials in Advertising on December 1, 2009. Like other FTC guides, the Endorsement Guides help advertisers understand what advertisements containing endorsements may be considered “unfair” or “deceptive.”

2. Definition. An “endorsement” is an advertising claim made through an endorser, whether a celebrity, expert, consumer, or organiza-tion. Specifically, an endorsement is a message “that consumers are likely to believe reflects the opinions, beliefs, or experiences” of the endorser. Thus, an identified company spokesman who regularly speaks on behalf of the company would not be an “endorser” because his message does not reflect his own beliefs or experiences. a. Note that the FTC refers to both endorsements (celebrities,

experts or organizations) and testimonials (consumers) as “endorsements.”

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b. Endorsements include verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization.

3. Ground Rules a. Endorsements must always reflect the honest opinions,

findings, beliefs or experience of the endorser. b. The advertiser has ongoing duties to ensure that the endorser

maintains his view of the product or continues to use the product, especially when the product changes. i. The advertiser should check in with the endorser “at

reasonable intervals” to make sure the endorser still holds his views.

ii. If the endorser states that she uses the product, the advertiser may continue to run the advertisement only so long as it has good reason to believe that the endorser is still using the product.

c. Cannot Claim “Results Not Typical.” If the advertiser does not have substantiation showing that the endorser’s experience is representative of what consumers will achieve, the adver-tiser must disclose the “generally expected performance” (and have adequate substantiation for that claim). The advertiser cannot simply state that the results depicted are “not typical.”

4. Consumer Testimonials. Generally speaking, advertisers must have adequate and reliable substantiation for consumer testimonials, beyond the testimonial itself, because consumers will likely inter-pret the testimonial as representative of what consumers will generally achieve.

• Example. NAD found that testimonials disparaging the service and performance of Verizon’s service conveyed the message that service disruptions and poor customer service were typi-cal for Verizon customers, not isolated incidents, and that Cox did not have adequate substantiation to support this reasonable interpretation of its advertising. Cox Commu-nications (Fiber Optics Telecomm.), Case No. 5168, NAD Case Reports, 4/27/10.

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5. Material Connections Between Advertiser and Endorser. Any material connections between advertisers and endorsers that consumers are not reasonably going to expect must be disclosed. Ultimately, this depends on context. For example, advertisers generally do not need to disclose payments to celebrities or experts in advertisements because consumers generally expect that these endorsers receive payment. a. Consumers. Advertiser must disclose payment or some other

“material connection” to the advertiser (i.e., a connection that consumers wouldn’t normally expect).

• Example. In a TV spot, an interviewer asks an actual customer seated in a restaurant for his “spontaneous” opinion of the restaurant’s cuisine. On the day the com-mercial was shot a sign was posted on the door notifying patrons that they would be filmed as part of an adver-tisement. The advertiser must disclose the circumstances under which the endorsement was obtained.

b. Organizations. If an advertiser pays for an outside study from a research organization, an advertisement referencing the “findings” of the research organization should disclose the connection with the advertiser.

c. Celebrities. Unexpected forms of compensation to celebrity endorsers (such as percentage of gross product sales, or own-ership in the company endorsed) might need to be disclosed.

d. Note: These same principles apply to new media—such as blogging, social networking sites, and street teams—as well as traditional media.

6. Expert Endorsers. Expert endorsers (individuals or organizations with superior knowledge or experience) must have the level and type of expertise implied by the ad, and his opinion must be based on adequate evidence (“examination or testing of the prod-uct at least as extensive as someone with the same degree of expertise would normally need to conduct”). a. Example. NAD determined that, based on the context of the

ad, Lance Armstrong was an expert endorser in an adver-tisement for a health energy supplement. Further, NAD found that the advertiser did not have adequate substan-tiation for Armstrong’s expert endorsement, and that the ad

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should clearly disclose that Armstrong was appearing “in his currently regular life” and not as a professional cyclist, if it wished for him to not be deemed an “expert” endorser. The FRS Company (FRS Energy), Case No. 4904, NAD Case Reports, 9/3/08.

B. Demonstrations

1. Definition. Product demonstrations are advertisements that make a claim by using a visual depiction of the actual product. Demon-strations must only demonstrate what the product can actually do and may not misrepresent any feature or quality of the product. Photographic techniques should not exaggerate, distort or otherwise misrepresent the product’s qualities.

2. Examples. a. Campbell Soup improperly used marbles in its soup com-

mercial so that the soup would appear to contain more ingre-dients as the marbles caused the ingredients to rise to the surface. In re Campbell Soup Co., 77 F.T.C. 664 (1970).

b. A Volvo advertisement depicted a monster truck driving over row of cars, smashing all cars except the Volvo, which was left completely intact. FTC challenged the advertisement as deceptive because the Volvo model had been reinforced and roof supports of other cars had been severed. Volvo North America Corp., 115 F.T.C. 87 (1992) (consent order).

C. Certifications and Seals of Approval

a. Use of the term “certified” or a seal of approval is a repre-sentation that a product has been endorsed or certified by a governmental, scientific, or other recognized impartial agency.

b. Under the Endorsement Guides, if an organization is represented as being expert, then it must utilize an expert or experts recognized as such by the organization or adopted standards suitable for judging the relevant merits of such products.

c. Under the Endorsement Guides, if there is a “material connection” between the endorser (e.g., a certifying agency) and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not

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reasonably expected by the audience), such connection must be fully disclosed.

d. Note: There are specific rules for environmental certifications and seals, as discussed below.

D. Environmental Benefit Claims

1. FTC “Green Guides.” On October 1, 2012, the FTC released revisions to the Guides for the Use of Environmental Marketing Claims (“Green Guides”), which cover a wide range of envi-ronmental claims.

2. General Principles. a. No Unqualified General Environmental Benefit Claims. The

FTC believes that “unqualified general environmental benefit claims are difficult to interpret” and these claims “likely convey that the product . . . has specific and far-reaching environmental benefits” with “no negative environmental impact.” Thus, an advertiser should not make general envi-ronmental benefit claims (e.g., “environmentally friendly” or “green”) unless the advertiser uses clear and prominent qualifying language linking the general claim to a specific product benefit.

b. No Overstatement of Environmental Claims. Marketers should not state or imply environmental benefits if the benefits are negligible. For example, the FTC advises that it would be deceptive for an advertiser to claim that the product was “50% more recycled content,” where the total recycled content only increased from 2% to 3%.

3. Environmental Certifications and Seals of Approval. a. The guides state that “use of an unqualified environmental

certification or seal of approval (i.e., one that does not state the basis for the certification) likely conveys a general environmental benefit claim . . . [and] marketers should not use unqualified certifications or seals of approval.” Thus, “language qualifying a certification or seal of approval . . . should clearly convey that the certification or seal of approval refers only to specific and limited benefits.”

b. The guides also state that “[a] marketer’s use of the name, logo, or seal of approval of a third-party certifier is an

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endorsement, which should meet the criteria for endorsements provided in the FTC’s Endorsement Guides.” This includes the Endorsement Guides rules for “material connections.” The Green Guides provide the following illustrative example: i. “A product advertisement includes a seal with the text

‘Certified by the Renewable Energy Association.’ The product manufacturer is a dues-paying member of that association. Even if the association certified that the manufacturer uses only renewable energy, the use of the seal is deceptive because it likely conveys that the association is independent from the product manufacturer. To avoid deception, the manufacturer should accompany the seal with clear and prominent language disclosing the material connection.”

4. Specific Environmental Claims. The guides provide specific rules for several different types of

environmental claims. For example: a. Recyclable. The advertiser should only make unqualified

recyclable claims (i.e., product is “recyclable”) if a “sub-stantial majority” of consumers have access to a facility that could recycle the type of product advertised. If not, the advertiser should make this clear (e.g., product package “may not be recyclable in your area”).

b. Degradable. Claim is acceptable where entire product or package will completely break down and return to nature within a reasonably short period of time after customary disposal. A reasonably short period is typically no more than one year; if product degrades for more than a year, advertiser must qualify the claim. Marketers should not make unqualified degradable claims for items intended for disposal landfills, incinerators, or recycling facilities.

c. Made with Renewable Materials. Claim must be substantiated and qualified by specifying the material used, how it is sourced, and why it is renewable.

d. Made with Renewable Energy. Claim is appropriate if virtually all of the manufacturing process was powered with renewable energy (or conventional energy offset by renewable energy certificates). Claims should specify the source of the

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renewable energy. Claim should not be made if the product, or any part thereof, was manufactured using fossil fuels.

e. Free Of. Advertisers can use “free of” claims when “de minimus” amounts of an ingredient are present in product, but the FTC will consider what constitutes “de minimus” amount on case-by-case basis. Claims should generally not be used if the product contains substances that pose the same environmental risks as the substance advertised as not present (e.g., advertiser can’t claim that shirts are made using chlorine-free bleach when manufacturer uses process that produce harmful byproducts that are similar to those of the chlorine bleaching process).

f. Note: The guides also address the following types of claims: carbon offsets, compostable, non-toxic, ozone-safe, ozone-friendly, recycled content, refillable, and source reduction (e.g., “10% less waste”).

E. Sale and Pricing Claims

1. Generally. Advertisements that make price claims or that offer a sale are regulated in accordance with the FTC’s Guides Against Deceptive Pricing. As a general rule, offers at reduced prices must be genuine and truthful, and must be a temporary reduction of the regular price of an item. In other words, the reduced price must be meaningful and temporary.

2. Meaningful Reduction Certain states prohibit the use of the word “sale” unless there is a

meaningful price reduction. a. Illinois law provides that it is an unfair or deceptive act for a

seller to use terminology implying price savings “unless the price of the product is reduced by a reasonable amount from the product’s former (regular) price.” 14 Ill. Admin. Code. § 470.290.

b. New Jersey law provides that for products under $100.00, an advertiser must “[e]nsure that the amount of the price reduction is sufficiently large that the consumer, if he or she knew what the former price was, would believe that a genuine bargain or savings was being offered.” N.J. Admin. Code 13:45A-9.3.

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3. Truly Temporary All sales should expressly provide an expiration date. Without a

return to a regular price, the sale price effectively becomes the regular price.

4. Regular Price Generally, an advertiser has to establish its regular price before

making a sales claim. Various states have different laws setting forth how an advertiser can establish a regular price. The FTC Guides Against Deceptive Pricing provide two ways in which to do so: a. The Substantial Sales Test. The advertiser can demonstrate

that it has made substantial sales of an item at the regular price; or

b. The Offering Test. The advertiser can demonstrate that is has offered the item at a regular price openly and actively in good faith for a reasonably substantial period of time.

5. Introductory Offers When introducing a new product or service, an advertiser may

use an introductory offer to generate immediate interest. An adver-tiser that uses an introductory offer must expect in good faith to increase its prices to a “regular” price at a later date.

6. Range of Savings Claims Regulations in several states, i.e., Connecticut (Conn. Regs. § 42-

110b-12a(e)), require that an advertiser making a range of savings claims, such as “save $5 to $10 on purchase” must offer at least a certain percentage (i.e., 10%) of its sale items at the maximum savings amount.

7. “Up To” Claims Savings or price reduction claims stating savings are “up to” a

certain percent should state both the minimum and maximum savings without undue or misleading display of the maximum. The number of items available at the maximum savings should be a significant percentage (i.e., 10% of the items in the offering).

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F. Special Rules for “Special Words”

1. “New”

a. The advertiser should generally not use the term “new” unless the advertised product or service is entirely new or has been changed in a “functionally significant” respect. Further, as a general rule, the advertiser should not advertise a product as “new” for a period of longer than six months.

• An advertiser generally may use the term “new” for a period beyond six months if it has been a very long time since the advertised product was last changed or if it is a product that rarely changes.

b. The advertiser can claim a product is “new” even if it has been available in limited test markets (i.e., less than 15% of the country) for longer than six months.

c. If the entire product is not new but the packaging, size, dosage or some other feature of the product is new the advertiser may use the term “new.” However, the advertiser should generally indicate what is new about the otherwise “old” product.

2. “Free”

a. Claims that a product or giveaway is “free” are subject to the FTC’s “Guide Concerning the Use of the Word ‘Free’ and Similar Representations.”

b. The rules for free offers include the following: i. All terms and conditions of the free offer must be disclosed

in close conjunction with the word free (a disclaimer is insufficient);

ii. The price of the product with which the free item is offered should not be increased within 30 days prior to the offer;

iii. A free offer should not last longer than six months during any 12-month period;

iv. There should be at least 30 days between separate free offers; v. No more than three free offers should be made during any

12-month period;

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vi. Free offers should not be made in connection with the introduction of a new product or service offered for sale at a specified price unless the offeror expects, in good faith, to discontinue the offer after a limited time and offer the item at the same price at which it was provided with the free offer.

III. BACKGROUND AND GENERAL RULES GOVERNING SUBSTANTIATION

In 1984, the Federal Trade Commission issued a Policy Statement articu-lating its position that advertisers must have a reasonable basis for advertising claims before such claims are disseminated. According to the FTC, objective claims for products or services represent to consumers, explicitly or by implication, that the advertiser has a reasonable basis for the claims. An advertiser’s failure to possess a reasonable basis before making objective claims may constitute an unfair and deceptive act or practice in violation of § 5 of the FTC Act.

A. General Consideration Number 1. Substantiation is required before a claim can be made

Generally, an advertiser must have written documentation showing a “reasonable basis” for its claims before the claims are made. This general policy is enforced by the courts and government agencies. 1. Section 5 of the FTC Act. FTC Policy Statement requires

substantiation before a claim is made. Advertisers that lack a reasonable basis—i.e., substantiation—before distributing an ad may violate Section 5 of the FTC Act. The FTC may consider post-claim substantiation, but only in the context of determining whether there is a public interest in proceeding against the adver-tiser; assessing the adequacy of the pre-claim substantiation; or determining the appropriate scope of an order to be entered against an advertiser lacking pre-claim substantiation.

2. Federal Courts. Many courts have required pre-claim substan-tiation. Courts may consider post-claim substantiation, but usually to determine the appropriate scope of an order against the adver-tiser or to assess the adequacy of the pre-claim substantiation that the advertiser submitted.

3. State Laws. Many states have unfair or deceptive trade practices acts that are also known as “little FTC Acts.” Not surprisingly,

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many of these states’ laws mirror the FTC Act. Moreover, many states have also enacted their own unfair competition statutes which govern advertising.

B. General Consideration Number 2. An advertiser must have a “reasonable basis” for each and every claim, whether express or implied

Whether there is a reasonable basis generally depends on six factors, which are to be examined on a case-by-case basis: 1. The type of product. For food or drug products or consumer

products that could affect safety or health, advertisers must possess a higher level of substantiation than for other types of products because of the potential danger such products pose. As a general rule, the FTC requires two adequate and well-controlled double-blind clinical studies to substantiate food, drug, health or safety claims.

2. The type of claim. An advertiser must have a greater level of substantiation for dietary, medical, health, safety or efficacy claims because of the importance of such claims to consumers and their inability to evaluate them. In addition, the advertiser should present these types of claims in such a way that consumers can understand the extent of the scientific support for the claim.

3. The benefits if the claim is true / The consequences if the claim is false. “If the benefits of a true claim are high, but the costs of a false claim are also substantial, then a relatively high level of substantiation would be appropriate.” See FTC Bureau of Consumer Protection, Advertising Substantiation Program: Analysis of Public Comments and Recommended Changes, at 31.

4. The ease and cost of developing substantiation. If the cost of developing substantiation is high, less may be required unless the consequences of a false claim are serious.

5. The level of substantiation experts in the field would agree is reasonable. Substantiation must generally meet contemporary professional standards. For example, a claim is properly substan-tiated by one clinical study if experts in the relevant field agree that a single study is sufficient. See Renovation Int’l Corp. v. FTC, 884 F.2d 1489 (1st Cir. 1989).

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C. General Consideration Number 3. An advertiser has an obligation to support any reasonable interpretation of its advertising claims (i.e. implied claims), including the message you intended to convey as well as the messages it may not have meant to convey

Example: Clorox advertised its Formula 409 All Purpose Cleaner in 15 second television ads showing the product at work removing stains by way of a time-elapsed camera. A competitor challenged the ads, arguing that the ads overstated the performance capability of the prod-uct, specifically that the product would completely clean stains within 4 to 14 seconds. Clorox said it never intended that as a take away mes-sage, and instead intended the ad to convey the message that the product begins working in just 4 to 14 seconds. The ads were found misleading, and Clorox was advised to cease using the demonstrations in future ads. See The Clorox Company, NAD Case No. 3886 (April 9, 2002).

D. General Consideration Number 4. The type of substantiation required depends on the type of claim being made … so know the claims conveyed

1. Express Claims. Explicit statements about a product’s performance characteristics, or qualities will likely require objective data. Examples of objective data to support product claims include: industry standard procedures, consumer performance surveys, technical specifications, and objective expert opinion.

2. Implied Claims. All reasonable interpretations of advertising claims must be supported by the amount and type of substan-tiation that the advertisement actually communicates to consumers.

3. Non-Comparative Claims (a/k/a “Monadic” Claims): Claims about a product attribute or claimed benefit should be supported by technical, scientific or consumer data. For example: “Aquarium Series Softsoap is clinically proven to eliminate 99% of the germs your family encounters.” In this example, you should have clinical tests showing the actual results claimed, not just a consumer preference study. Similarly, the claim “Effective Allergen Reduction” should be supported by testing that shows the amount of allergens after use is less than the measure before use.

4. Comparative claims: Claims that describe how one product compares with another are best supported by testing that docu-ments the claimed comparison, whether the advertised product is

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superior to competing products or as good as competing products. In general, for comparative claims an advertiser should ensure: (1) the similarity of the products compared; (2) the availability of the compared product; (3) the truthfulness and accuracy of the claims made; and (4) that the advertiser modifies its advertising every time a change in the market renders its advertising inaccurate. Examples of different types of comparative claims include: a. “Most effective dirt removal” or “no dryer works faster.”

Unqualified comparative claims should be tested against a significant portion of the competitive set, which generally means 85 percent of the competitive marketplace.

b. “The best-cleaning leading vacuum cleaner.” Qualified supe-riority claims should be tested against the group compared (in this example, the other “leading” brands).

c. “Lasts as long as Competitor X.” Parity claims, if qualified, should be tested against the group compared; if paired, should be tested against the identified competitive product/competitor.

d. “Only one with a patented 24 hour cavity prevention system.” Exclusivity claims should be timely substantiated, meaning you should watch that the claim does not become stale by the introduction of another in the market.

• Special Note. When making comparative claims, adver-tisers should compare products as used, not just as packaged. For example, a claim of “50% More Frosting” was found to be unsubstantiated even though the product contained 50% more product by volume at the time it was opened. The claim was unsubstantiated because the frosting needed to be stirred before using, and when stirred, it only contained about 26% more frosting than the competing product. See Pinnacle Foods Corp. (Duncan Hines Whipped Frosting), NAD Case No. 4454 (Feb. 1, 2006).

• Special Note. When making comparative claims, adver-tisers should compare products in a manner consistent with their labeled instructions. For example, a claim that the advertised air freshener killed 99.9% of surface bacteria and that the competing product had no anti-bacterial affect was found to be misleading because the demonstrated use of the advertised product was not

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preceded by the pre-clean step that was mandated by its EPA-approved label directions. Reckitt Benckiser (Lysol Neutra-Air Spray), NAD Case No. 5029, (June 5, 2009).

5. Establishment claims: An establishment claim communicates that scientific evidence supports the truth of the claim and requires support in the form of whatever evidence the claim refers to—if the claim refers to any sort of testing, (e.g., “scientifically proven”, “tests show”, “studies show”), the advertiser should have the specific testing referred to in-hand before making the claim.

6. Testimonials/Endorsements.

• Consumer testimonials/endorsements must be supported by data demonstrating that the opinion is projectable to all con-sumers. In other words, testimonials cannot be used to “end run” around substantiation requirements. If the claim can’t be made directly, an advertiser can’t make it simply by having someone submit a testimonial.

• Expert testimonials/endorsement must in fact be substantiated by the opinion or testimony of an “expert” in the relevant field. For example, an engineer cannot be an expert if the claim requires a dentist. Further, just being an expert isn’t enough basis for an expert evaluation. Expert endorsements must be supported by an actual examination or evaluation that other experts in the field would normally do to support the conclusion in the endorsement.

• Organization endorsements must be awarded via process that ensures it reflects the collective judgment of the organization.

E. General Consideration Number 5. Substantiation is not required for subjective claims, or puffery

Subjective claims are typically considered “puffery” and do not require substantiation. Exercise caution, however, in categorizing claims as puffery. Often there is an implied claim being made that does require substantiation. 1. Puffery Defined. Puffery is a statement or claim that is generally

and readily recognized as exaggeration, hyperbole or salesman’s talk. A statement is “puffery” and does not require substantiation if:

• It is a general statement about the product which is incapable of proof; or

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• Even though capable of proof, it is not a statement which a reasonable person would believe or consider to be material.

2. Determination of When a Claim Constitutes Puffery. As a general rule, the FTC uses the following three criteria to differ-entiate a claim that requires substantiation and one that is mere “puffery”: i. Whether the claim is general or specific. General overall

superiority claims are more likely to be considered puffery than superiority claims relating to a specific product attribute, or a direct comparison to a competing product.

ii. Whether the claim is capable of measurement. Claims considered “puffery” are generally those that are not subject to measurement or verification.

iii. Whether the claim is stated as fact or opinion. Claims expressed as an opinion and not as a representation of fact are more likely to be puffery. However, the key issue is whether consumers understand the claim as opinion, not fact.

IV. CONSIDERATIONS FOR CONDUCTING PROPER TESTING OR RESEARCH

Generally speaking, there are two types of testing used to substantiate advertising claims: (1) consumer perception surveys, and (2) scientific testing or data collection. That said, because each claim is different, there is no universal test or method for appropriate substantiation. For each claim, then, advertisers should evaluate what substantiation would best fit the claim. In some cases, multiple forms of substantiation may be required.

A. When Do You Need A Consumer Perception Survey Research to Substantiate a Claim?

When you are making claims about consumer or group pref-erence, (e.g., “Number one recommended cleaner by moms”) statistical surveys can support claims about the opinions/attitudes/behaviors of a that group. Statistical surveys are used when a claim relates to a representative conclusion about a general population and it is too costly to poll every member of that population.

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B. When Do You Need Testing to Support a Claim?

Testing is normally used when a claim relates to a product attrib-ute (e.g., performance; more or less of an attribute) that may be confirmed objectively. As discussed in more detail below, the type of testing necessary depends on the claim. For example, advertisers may support certain performance claims (“removes three times more dirt”) with testing in a controlled environment that demonstrates the product’s performance in compliance with the claim.

C. Prerequisites for All Types of Testing

Although no universal guidelines exist, the following procedures should be followed, regardless of the type of testing, whether con-ducting survey research or performance testing. 1. Test Should “Fit” or Match the Claim. Claims should not be

broader in scope than the available substantiation. If the sub-stantiation is not calculated to support the specific objective claim being made, it will not provide a reasonable basis for the claim.

2. Test Should Relate Directly to the Products Advertised/ Compared. Tests should be of final end product, not prototypes. If products are sold in more than one form, the products tested must be of the same form relevant to the claim, and competitor products used in comparative claims should be similar to those to which they are compared. In addition, clinical testing must be performed on the advertised product as a whole—not just its component parts.

3. Test Should Use the Appropriate Experts/Researchers, Whether In-House or Third Party. Using in-house laboratory testing is not per se unreliable, but authority suggests that using an inde-pendent, well-respected testing facility can reduce, if not eliminate, the potential for bias.

4. Test Should Select Sufficient Competitive Products to Test. Different industry guidelines should be consulted for specific areas.

• In the area of sensory claims, for example, the ASTM notes that non-brand specific competitive claim (e.g., versus “other leading brands”), requires testing of at least the two brands with the highest national market share, and more if the two top brands control less than 50% of the market.

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Standard Guide for Sensory Claim Substantiation, ASTM Int’l, Designation E 1958-07, §5.3.1.

• If the product is not tested against brands representing at least 85% of the national market (and the most significant competitors), then the ad claims should be qualified to the specific brands in lieu of general superlative claims.

5. Test Should Maintain Objective Testing Procedures. Com-petitors often criticize substantiation as being insufficient or undependable because it allegedly relies on biased information. Accordingly, whenever possible, samples should be tested using double-blind procedures that eliminate leading or biasing infor-mation about the products or the overall objective of the study, including the identity of the advertiser, the order of products presented to respondents, etc. Products to be tested should be obtained, handled, stored, and used in a manner consistent with normal consumer practice.

6. Test Should Apply Generally-Accepted Scientific Principles and Procedures and any Relevant Industry Guidelines. To determine what procedures are generally accepted, look to FTC and other industry guidelines (i.e., IEC, ASTMs) in preparing clinical testing methodology. Clinical testing must be reliable and well-controlled, and of the sort that can be readily verified.

D. Substantiation Surveys

In conducting substantiation surveys, (i.e., to support professional recommendation/consumer preference claims), here are some generally accepted guidelines.

1. Considerations For Conducting A Proper Survey

a. Properly Define the Universe of the Survey. The “universe” is all individuals whose states of mind are at issue. Generally, the universe should be made up of potential purchasers of the product at issue.

b. Select a Representative Sample from that Universe. The survey respondents should be a representative sample of the universe as a whole. “Recruiting criteria of the test population must be stated in the test protocol and should be as objective as pos-sible. Records must be kept indicating why potential respondents

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were rejected from the study.” ASTM Int’l, Designation E 1958-07, § 5.2.4.

c. Seek Demographics Representative of Target Population. Respondents should match the age, gender, and geography, etc. of the target population, as well as usage patterns. ASTM Int’l, Designation E 1958-07, § 5.2.2. In addition, the sample should be representative of the national population.

d. Ensure Sample is Large Enough and Seek Statistically Sig-nificant Results. Generally, as sample size increases, the percentage needed to obtain statistically significant support decreases. Some claims require larger sample sizes. For example, certain networks require a minimum sample size of 300 for superiority claims and 500 for parity claims, both at a 95% confidence level. See ABC Standards and Guidelines, at 25.

e. Frame Questions in a Clear, Precise and Non-Leading Manner. Questions must be relevant to the issue addressed and gener-ally should not include extraneous questions. Questionnaires can use open-ended or closed-ended question, but should not be suggestive, biased, or leading.

f. Conduct the Survey Double-Blind, if Possible. “Double Blind” means that both the interviewers and the respondents should be unaware of the purposes of the survey. Double-blind surveys prevent explicit or implicit clues as to the sponsorship of the survey—clues that could convey the expected or preferred response to the respondent and skew the results.

g. Follow Accepted Survey Protocols. There are a variety of methods available for taking a survey, including in-person interviews, telephone surveys, internet surveys, and mail surveys.

2. Additional Issues to Consider for “Professional” Recommendation Claims

Separate from consumer studies, surveys of professionals implicate additional issues due to the weight given to such claims by consumers. a. Claims should be supported by a random and statistically rep-

resentative survey of the named professionals, and responses should be based on the actual experience of the professionals in ordinary practice.

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b. Survey should be relevant to and support the specific claims advertised.

c. The area of expertise of the identified professional should “fit” the claim, although the “fit” does not need to be perfect.

d. Even though it is not a survey of the general public, the sample size of the professional survey should meet minimum size requirements.

E. Performance Testing

Product performance claims require competent and reliable sub-stantiation. Generally speaking, in order to produce meaningful results for the purpose of claim support, product testing should be conducted under consumer relevant conditions, using accepted methodology and protocols, and should relate directly to the advertising claim. 1. Laboratory Testing Generally.

a. Test must relate to product as advertised. Testing should be conducted on final formulations and must be repeated if formulas change—the same holds true for competitive products tested for comparative claims.

b. Tests conducted by independent labs or research companies may be helpful in defending against criticisms based on objectivity.

c. Tests should use appropriate controls, where possible. Control groups eliminate noise and focus the causation inquiry on the claimed attribute.

d. Claim should not exceed the scope of the study. Results should not be so simplified as to fail to accurately represent the actual findings or testing. For example, if test results show that the product cuts grease better on glass, the ad claims should not be overstated to simply say “cleans better.”

e. Tests should preferably study the entire product, not merely components. Tests should look at the product as a whole, and not focus on the performance of individual pieces in a vacuum.

2. Home Use Testing (HUT). HUTs are often preferred for claims relating to overall suitability of a product or where claims require usage over an extended period of time in order to evaluate

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product performance. They rely on the experience of consumers and are a form of consumer research. Generally, HUT testing should adhere to the following guidelines: a. Use sufficient sample size. If the sample size is too small,

then the advertiser may not be able to extrapolate those results to support broad performance claims made in advertisements targeted to the general public.

b. Participants should be representative of universe. Sample should adequately represent target audience.

c. Use appropriate controls. d. Study should be blind, where possible and appropriate.

V. PRODUCT DEMONSTRATIONS

A product demonstration on, for example, the efficacy of a product cannot serve as the substantiation for claims on efficacy. Rather, an advertiser must substantiate the claims with objective evidence; the demonstration serves, as its name suggests, as a demonstrative of the objective substantiation.

A. General Rules and Considerations for Demonstrations

Product demonstrations must truthfully and accurately depict how a product performs under normal consumer use. Generally, product demonstrations should adhere to the following rules:

• The product should be demonstrated in the same manner as it is used by consumers;

• Demonstrations should follow the product directions commu-nicated to consumers;

• Time lapses, mock-ups, trick photography, and similar devices should be adequately disclosed;

• “Torture Tests” can only be used if they illustrate what the typical product performance would be in the described circumstance; and

• Demonstrations featuring competitor products to support compar-ative claims should be undertaken with the same care.

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B. Network Guidelines Require Affidavit Support for Product Demonstrations

The television networks have their own rules and requirements for product demonstrations that should be followed to avoid challenge.

• NBC requires that commercials showing demonstrations be accompanied by an affidavit, signed by the responsible super-visory individual who personally observed the production, attesting to the accuracy of the demonstration and that it was performed with market-available products without modification or alteration.

• FOX similarly requires that demonstrations be accompanied by an affidavit signed by the supervisory authority attesting to the accuracy of the demonstration.

• CBS simply requires that “adequate documentation” be provided for all demonstrations before broadcast.

• ABC requires that demonstrations disclose any material facts necessary to understanding their significance, and be accom-panied by an affidavit of authenticity.

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