The National Advertising Division (NAD), the unit of the Advertising Self-Regulatory Council that reviews national advertising and considers competitor challenges to advertising claims, took the unusual step of referring advertising from Wal-Mart and Aspire Sports Drink to the Federal Trade Commission.
Referrals are the most extreme step for the National Advertising Division; most brands revise or pull advertising based on NAD’s decisions. So far this year, NAD, which reviews more than 100 cases a year, has referred five cases to the FTC. In 2014, NAD referred six cases to the FTC and referred ten in 2013.
The FTC does not comment on whether it would review the referred ads under the agency’s unfair and deceptive practices authority.
Walmart ran afoul of the NAD when, in the course of a routine monitoring program, the regulatory group asked the retailer to substantiate the implied claims in the big box retailers “raise in pay” ads.
The NAD believed that the ad implied that Wal-Mart raised wages of its employees from minimum wage to $15 per hour, that Wal-Mart raised the wages of its employees to a living wage, allowing them to earn enough to support themselves and/or their families and that Wal-Mart’s increased wages allows its employees to “build a future.”
In response to NAD’s inquiry, Wal-mart disagreed that the commercial conveyed any implied messages that required substantiation. The company also contended that it was outside the NAD’s mandate to examine whether the commercial made any implied claims and to demand support for such claims.
Because Walmart would not participate in the self-regulatory process, NAD referred the commercial to the FTC.
In the case of Aspire, the sports drinks maker’s ads claimed the drink was “all natural,” and makes “it easier to flight colds, flu, and infections,” while Gatorade supplies “empty calories” and includes “extra sugar.”
Stokely-Van Camp, the maker of competitor Gatorade, challenged those claims.
NAD found that Aspire did not demonstrate the negative properties of Gatorade or the replacement benefits of Aspire and recommended that Aspire discontinue those claims.
The company agreed to make certain of the recommended changes, but disagreed with NAD’s recommendation that Aspire discontinue its unqualified claim that it is a ‘natural sports drink.
“We are confident in our ability to continue making this claim and that our ‘natural’ claim is truthful and supported,” said the company in a statement.
Since Aspire declined to implement certain recommendations, NAD referred the case to FTC.
NAD is the investigative unit of the Advertising Self-Regulatory Council, administered by the Council of Better Business Bureaus.