Last month, NAD held its annual conference (this year celebrating 50 years of NAD)! The conference featured speakers from across the industry who provided insight into current trends, future-looking priorities, and thoughtful discussions on various substantive issues. Check out our summary of some important takeaways from this year!
NAD Trends & Insights
NAD shared an overview of 2021 trends which included some of the following:
- 2021 brought a handful of procedural issues arising in cases -- including jurisdictional arguments, issues surrounding the publication of case decisions before authorization, and the use of confidential information.
- Some of the common themes arising in NAD cases this year included issues surrounding aspirational claims, hyperbole, humor, and problem-solution scenarios.
- Of the cases brought to or by NAD in 2021, the SWIFT fast-track made up 7% of decisions, and there were 3 cases brought under NAD's new Complex track.
- Monitoring cases made up 16% of cases, and NAD noted it continues to focus monitoring priorities in areas such as drugs/health/health aids, dietary supplements, financial services, and green/sustainability.
NAD also shared insights into what we can expect from NAD in the upcoming year, including:
- The creation of a new 501(c)(3) arm, called the Center for Industry Self Regulation (or "CISR"), focused on research, idea incubation, and more.
- The appointment of a new NARB Vice-Chair.
- New online features, such as the ability to share documents across parties, view meeting dates/deadlines, receive automatic notifications, add additional filing administrators, and provide support for reopened and compliance challenges.
- A focus on the creation of content surrounding the fundamentals of advertising law, in an effort to make the industry more accessible to new players in the market.
- A focus on diversity initiatives.
NAD's year in review made clear that both existing and newer industries continue to be of interest to both competitors and NAD itself, and that NAD has made it a priority to encourage new members of the marketplace to utilize the forum as well.
FTC Commissioner Rebecca Kelly Slaughter reiterated the agency's current areas of focus, which include:
- Revitalizing and strengthening its regulatory and enforcement tools.
- Taking its statutory and legal authorities more seriously to advance the work of protecting consumers and promoting competition.
- Addressing a wide range of issues people face in digital markets and moving past a narrow focus on privacy to a broader focus on data abuses e.g., the trend of increasing labor exploitation through worker surveillance.
She also laid out the agency's priorities going forward, including:
- Democratizing the FTC to be in tune with the challenges that Americans are facing.
- Keeping up to date with next generation technologies.
- Protecting populations of concern, including small businesses and marginalized communities.
- Scrutinizing dominant firms and intermediaries.
- Tackling structural incentives that enable misconduct e.g., data sharing between companies.
Various law firm, in-house and NAD representatives addressed how ad wars have evolved over the years and significant trends, noting that:
- The risk tolerance of disruptors who are more aggressive with their advertising is higher than that of most other companies.
- Going forward, it's likely that traditional ad wars will disappear and we'll see more challenges involving disruptors. More traditional advertisers may also be less reluctant to participate in the NAD process due to uncertainty about whether or not disruptors will engage or comply.
Sustainability & Social Responsibility
Some of this year's panels addressed claims about both environmental and social responsibility and sustainability, making clear that these are claims that are increasing in prominence in the marketplace. The panelists reminded viewers that when making these sorts of claims, it's important to remember that:
- Context is important; claims like this have the potential to be interpreted broadly by consumers so it's crucial to be clear about the specific claims being made.
- Aspirational claims still require substantiation; while organizations can certainly tout their goals in these spaces, it's important that they can show they are taking substantive steps to work towards them.
- Guidance can come from a variety of sources. Some of the claims in this space don't have specifically delineated guidance from one particular body, so advertisers should be looking holistically at the industry (FTC, NAD, state laws, etc.), to understand how these claims may be interpreted.
Representation and Substantiation
Representatives from a range of companies and data and consulting firms shared their perspectives on diversity, equity, inclusion and bias, representation in advertising, and how claim substantiation standards interplay with these issues, which included some of the following:
- When it comes to implicit bias, NAD has not been critical enough about samples in the past e.g., types of people included. Instead, the primary focus in claim substantiation has been on issues, such as sample sizes. However larger sample sizes are insufficient to overcome bias – they simply create more precise inaccuracies.
- Demographics are changing in the US and consumers are increasingly willing to call out brands, especially ones that aren't willing to engage with diverse consumers.
- It's no longer enough to talk about social issues, brands need to figure out how to take action and lawyers need to look under the hood of processes that are used to develop claims e.g., having a diverse group present when decisions are made, checking biases in advertising.
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