Legal Review: 9 Out of 10 Regulators Prefer Substantiated Preference Claims1 Jul, 2013 By: Jeffrey D. Knowles, Randal M. Shaheen Response
Believe it or not, consumer comments about a product do not always have to be substantiated. For example, if a consumer says a product tastes great or they love how it looks, such claims are likely subjective “puffery” and do not require substantiation.
However, turn such a claim into a “preference” claim and the story is likely different. Such claims are everywhere. Understandably, advertisers like to boast that people prefer the taste of one product over another or the cleaning power of one product or another. In fact, almost any product attribute can be turned into a preference claim.
Sometimes performance claims can be quite specific — “Seven out of 10 consumers” or “nine out of 10 stylists” prefer or recommend “x” over “y.” Other times they are more general: “most people prefer” or “more people preferred” the taste of “x.” But what about advertisements that simply show one or more consumers talking about a product attribute and how they prefer that product to another. Other than insuring that such claims reflect the honest opinions of the depicted consumers, must these types of preference claims also be substantiated?
The answer, according to the Federal Trade Commission’s (FTC) Guides Concerning the Use of Endorsements and Testimonials in Advertising is likely yes. The opinions of one or more consumers expressing a preference for one product over another likely represents an endorsement that must then be “typical” of the average consumer experience. Of course, there are few black-and-white answers to many advertising issues, and this one is no different. For example, if the advertisement uses actors and not consumers, and it is clear to the reasonable consumer that actors instead of consumers are expressing the preference claim, the FTC does not view the claim as an endorsement.
However, the use of actors does not mean that the advertiser is necessarily off the hook. While the claim may not be an endorsement if the actors say they prefer the taste, performance or any attribute of a marketer’s product over a competitor’s, that claim must be adequately substantiated.
So, then, how are preference claims substantiated? Be prepared to provide a robust survey to support the claim. While the networks, courts and regulators all have slightly different criteria, data from 250 consumers is a good rule of thumb for the minimum size of an adequate survey. Because tastes and preferences can vary from region to region, if the product is marketed nationwide and the preference claim is also nationwide in scope, marketers should gather the survey data from at least four different geographic regions. If the product is sold only locally or regionally, then the geographic scope of the data collected can be limited accordingly.
In addition to appropriate geographic scope, preference surveys must also test against an appropriate sample of competing products. If the preference claims are limited to certain competitors, the survey only needs to test against the products named in the claims. If the preference claim is more general, (e.g., “the one most consumers prefer”) then the claim needs to be tested against 85 percent of the relevant market.
Here are three final thoughts on the substantiation of preference claims:
- Remember that tastes change and products are constantly redesigned and/or reformulated. No preference study can substantiate a claim forever. If a leading competitor makes major changes to its product, it is probably time for a new preference survey.
- Professional survey companies and experienced legal counsel are invaluable partners in the design and execution of preference surveys. Survey companies have the experience and infrastructure necessary to design robust studies and execute them on the appropriate geographic scale. Legal counsel can provide guidance on whether the desired claims are adequately substantiated based on the survey data, and, if they are not, provide guidance on what claims the data does substantiate.
- A bonus pro tip is to use legal counsel to engage the survey company so that survey and survey results are potentially protected by privilege or a work product claim. This can be useful in the unlikely event that the survey data is unflattering. ■