United States: NAD Takes Two Looks At Being #1

Consumer preference and market leadership claims exert a powerful pull on consumers. Two recent decisions by the National Advertising Division of the Council of Better Business Bureaus (NAD) illustrate the care required, and risks involved, when bragging to consumers about being a favorite in the market.

Who decides which is best?

Every year multiple challenges involving consumer taste preference claims and the testing that supports them land on NAD's docket. One such matter this fall actually involved dueling taste tests and considered the important question of the right group of people to test. NAD's general mantra is "Taste tests should sample consumers who customarily use the products being compared."

Mizkan, maker of Ragu, claimed, "Consumers prefer the taste of Ragu Homestyle Traditional OVER Prego Traditional." On its face, this claim is specific and avoids the common problem of failing to identify the specific products being compared and veering into an overly broad line claim. Mizkan's taste test program also provides a good overview of basics. The test:

  • Was double-blinded;
  • Employed a geographically dispersed sample reflecting the target market;
  • Compared products with similar shelf life that were purchased in the test market;
  • Prepared both products according to instructions;
  • Presented and tested the two products in the same way;
  • Required test subjects to cleanse their palates prior to tasting each product;
  • Systematically rotated the order of tasting; and
  • Generated statistically significant results (95% confidence level).

Mizkan's test also followed the standards set forth in the ASTM Standard Guide for Sensory Claim Substantiation, E1958, and subjects were asked, "Overall, which pasta sauce, if either, did you prefer on taste, the pasta sauce you tried first, the pasta sauce you tried second, or did you not have a preference for either sauce on taste?"

Mizkan's test included users of tomato-based sauce. Campbell Soup Company, the maker of Prego, challenged and offered its own survey showing parity between the two sauces when testing preferences of traditional pasta sauce users. Campbell's expert urged that taste tests should not be conducted on users of the category, but rather on users of the specific product or flavor at issue.

NAD found that Mizkan used the right population and that Campbell's sample was overly restrictive. While it would not have worked to include people who do not eat traditional sauce, traditional sauce is red sauce. NAD said, "While it would be improper to test a particular flavor among consumers who specifically do not like that flavor, this is not to say that a taste test cannot be conducted employing subjects who like other flavors."

Number one, but for how long?

Another recent NAD case tested the limits of disclosure use in best-selling claims, and found that properly structured disclaimers cannot explain away everything. Instead, best-selling claims must be supported by reliable and most recent data.

For three years running, Benefit's They're Real Mascara enjoyed the top spot in the prestige mascara category, until the latter part of 2016, when it was displaced by Too Faced's Better Than Sex Mascara. After 2016, Benefit continued promoting at point of sale and on the web that it was the best-selling prestige mascara in the United States and the bestseller for three years, using a disclaimer identifying the source as the NPD Group dollar sales from July 2013 to 2016.

Too Faced asserted that notwithstanding the disclosure, readers would understand the claim to be based on current data, and its brand was the bestseller in dollars and units for 2016 full year and 2017. Benefit countered that the ads taken as a whole made clear the claims were based on past glories.

NAD found that notwithstanding the disclosures, the claims were phrased in the present tense, and therefore one reasonable takeaway was a current superior sales message. Here, NAD found that the disclosures did not meet the clear and conspicuous standard but, even if they had, that the dated source information would contradict – not clarify – the main claim of the mascara as the current bestseller.

We often field questions regarding whether such a claim should be based on dollar or unit sales. This is particularly relevant when the same brand does not come out on top by both measures. Conventional wisdom says that a best-selling claim based on units is the better comparison. However, a claim based on sales data likely will stand up, if properly qualified. The bigger issue is often how frequently the data must be refreshed, and, if a top seed is displaced, how long an advertiser has to remove the claims. While there is no hard and fast rule, an advertiser should examine the claims afresh each time new data is released – be this monthly, quarterly, or annually.

Putting such a claim on packaging presents a big gamble, as changeover can take time. Limiting such claims to advertising where claims can be nimbly be removed or modified is wise, particularly when the margin between the top seller and other competitors is slim and when there is expected and frequent innovation in a product category.

The bottom line

Both of these NAD decisions demonstrate that whether they are relying on market data or consumer surveys to support consumer preference claims, brands must take care to collect and utilize supporting data properly, because the competition is certain to "check the math." 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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