Advertisers rely on paid research to substantiate marketing claims. When a claim is broad or the research underlying the relationship is unclear, the advertising may face scrutiny and costly challenges. A recent decision by the BBB National Programs National Advertising Division (NAD) provides guidance on disclosure requirements for paid studies used to support advertising claims.
Substantiation Claims Based on Paid Research
Liberty Mobile Puerto Rico promoted its services by claiming it had the best network and coverage in Puerto Rico. These claims relied on a study conducted by Global Wireless Solutions (GWS), which Liberty described in its advertising as an “independent study.”
Competitor T‑Mobile challenged the advertising. While T-Mobile did not dispute the study’s results, it argued that Liberty should more clearly disclose that it had paid for the research. T-Mobile pointed to the Federal Trade Commission’s Endorsement Guides, which require transparency when making endorsements or sponsoring studies.
During the NAD proceeding, Liberty revised its disclosure to state that the study was “conducted by GWS and paid for by Liberty.” NAD did not object to this language.
NAD Recommendations
The NAD accepted Liberty’s revised disclosure and offered recommendations intended to ensure that consumers notice and understand the information. The recommendations included that advertisers relying on paid studies should direct consumers’ attention to the disclosure, place the disclosure at the beginning of the supporting language rather than at the end, and ensure that the text is large enough to be easily readable. The critical issue is whether the research relationship is clearly disclosed.
Claims Substantiation and Disclosures
When making broad claims based on paid research, the sponsored nature of the search must be clearly and conspicuously disclosed. Advertisers must ensure that consumers understand the basis for the claim and any financial relationship connected to the research. IMS Legal Strategies designs defensible research and consumer surveys that companies can rely on to support advertising claims.
