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Part Seven Special Topics and Perspectives
Belch: Advertising and
Promotion, Sixth Edition
VII. Special Topics and
Perspectives
Figure 21-1 Sources of NAD cases and decisions, 2001
21. Regulation of
Advertising and Promotion
© The McGraw−Hill
Companies, 2003
legal rulings to advertisers, agencies, and the media. The council also plays an important
self-regulatory role through its National Advertising Division (NAD) and Children’s
Advertising Review Unit (CARU). The NAD works closely with the National
Advertising Review Board (NARB) to sustain truth, accuracy, and decency in
national advertising.
The National Advertising Review Council
and the NAD/NARB
In 1971 four associations—the American Advertising Federation (AAF), the American
Association of Advertising Agencies (AAAA), the Association of National Advertisers
(ANA), and the Council of Better Business Bureaus—joined forces to establish the
National Advertising Review Council (NARC). The NARC’s mission is to sustain
high standards of truth, accuracy, and social responsibility in national advertising. The
council has two operating arms, the National Advertising Division of the Council of
Better Business Bureaus and the National Advertising Review Board. The NAD is the
first level that investigates the truthfulness and accuracy of an ad. The NAD reviews
only national advertisements, those disseminated on a nationwide or broadly regional
basis. Product performance claims, superiority claims against competitive products, and
all kinds of scientific and technical claims made in national advertising are the types of
cases accepted by the NAD. When an advertiser or a challenger disagrees with the
NAD’s findings, the decision can be appealed to the NARB for additional review. The
NAD/NARB has become the advertising industry’s primary self-regulatory mechanism.
The NAD’s advertising monitoring program is the source of many of the cases it
reviews (Figure 21-1). It also reviews complaints from consumers and consumer
groups, local BBBs, and competitors. For example, in 2002 the NAD received a complaint
from the Center for Science in the Public Interest, a consumer advocacy group,
over an ad run by Campbell Soup for the company’s V8 vegetable juice that suggested
a link between the tomato-based product and a reduced risk of cancer. Though the
NAD decided that Campbell provided competent and reliable evidence to support certain
claims, it recommended that the company modify language stating “for prostate
cancer, a lower risk is apparent when five or more servings (of tomato products) are
consumed per week.” Campbell agreed to change the wording of the ad. 15 During the
1970s and 80s, many of the complaints to the NAD came from consumers. However,
with the increased use of comparative advertising, the majority of the complaints are
now coming from marketers that are challenging competitors’ comparisons with their
brands. 16 For example, BMW filed a complaint with the NAD over a Volvo commercial
claiming the Volvo 850 Turbo Sportswagon accelerates faster than a BMW 328I. 17
Procter & Gamble recently filed a challenge with the NAD over a TV commercial
from Fort James Corp. that claimed Brawny paper towels were stronger than P&G’s
Bounty brand. The commercial in question was the popular “Grannies” spot that
showed two grandmothers pushing over a refrigerator to make a mess that was more
easily cleaned with Brawny paper towels than with Bounty. 18
The NAD acts as the investigative arm of the NARC. After initiating or receiving a
complaint, it determines the issue, collects and evaluates data, and makes the initial
decision on whether the advertiser’s claims are substantiated. The NAD may ask the
Sources Number Percent Decisions Number Percent
Competitor challenges 77 66% Modified/discontinued 71 60%
NAD monitoring 18 15 Administratively closed 13 11
Local BBB challenges 6 5 Substantiated 17 15
Consumer challenges 16 14 Compliance 8 7
Total 117 100% Referred to government 8 7
Total 117 100%