The National Advertising Division ("NAD") serves as a self-regulatory forum for businesses to review advertising claims that are allegedly false or misleading without proceeding to court. As they rely on FTC precedent, NAD decisions can serve as a touchstone to determine trends in advertising law generally. Below is an overview of recent themes and major decisions by the NAD.
Themes From the NAD
- First, several of the challenged claims were related to health or sustainability, to which the NAD took a moderate approach in assessing support. The NAD found that the vast majority of the claims were supported. It recommended modification or discontinuance only for claims that did not provide a clear explanation of their metrics from empirical sources. Similarly, one claim was a "Made in the U.S.A." claim. These claims reflect advertisers' positive attitude towards using the source or conditions of manufacture as a selling point for products, but highlights the continued importance of adhesion to decisions and guidance such as the FTC Green Guides and Made in USA standards.
- Second, claims made on social media were involved in most cases and pose unique risks for being misleading. The NAD requires that advertisements not mislead consumers at any time, which means that sponsorship must be clearly and conspicuously disclosed at all times. The prevalence of social media and influencer claims demonstrates that advertisers are taking full advantage of all advertising platforms and will continue to find new avenues to distribute sponsored content to customers. However, in using these platforms, advertisers must remain cognizant of FTC and NAD guidance, including recent decisions, investigations, and guidance such as the FTC Endorsement Guides.
- Third, a large portion of advertisers have recently elected to discontinue use of the claims after a proceeding is initiated. When an advertiser voluntarily discontinues a claim, the NAD treats it as though it had recommended discontinuation. Over the past month, around half of the advertisers have avoided the decision-making process by discontinuing all or some of the claims. Additionally, all of the advertisers have recently accepted the NAD decisions, even when their claim was not substantiated, and there have not been any appeals filed recently. The willingness to discontinue claims and lack of appeals indicates a risk-averse attitude and trust in the self-regulatory process. Of course, the NAD standard is having substantiation at the time the claim was made, so working with counsel before the claims are made can help avoid any adverse disputes in the first place.
Selected Cases
The following two cases exemplify many of these themes. The first addresses influencer marketing and sponsored content, and the second addresses sustainability claims.
Coterie Baby Inc. (The Diaper), Report #7380, NAD/CARU Case Reports (June 2025): The Procter & Gamble Company ("P&G") challenged several of Coterie Baby Inc.'s claims about the absorbency and performance of its product, as well as the disclosure of their influencer marketing.
- Superiority Claims. Coterie stated that their product, The Diaper, had "Up To 4x Absorbency Compared to Leading Brands" and "Up to 3x Drier Skin Compared to Leading Brands." Both Coterie and P&G presented studies addressing the level of absorbency under different conditions. Coterie's study found that their claim was supported, but compared their diaper to a leading brand other than P&G under unrealistic conditions. The NAD determined that the underlying comparison was "apples-to-oranges" because the brands were dissimilar. The NAD noted that even as part of a superiority claim, an "up to" claim may still be misleading even when an appreciable amount of consumers can achieve the maximum benefit if the underlying comparison is not between like products. Thus, the NAD recommended discontinuing or modifying these claims.
- Endorsement Claims. P&G challenged a sponsored influencer post by Coterie, which initially appeared to be an unbiased review when shown in a user's feed but had a sponsorship disclosure in the blog post. The NAD noted that under the FTC Endorsement Guides, native ads must be identifiable as advertising even before the user arrives at the main page. Coterie voluntarily agreed to permanently discontinue these claims, so the NAD did not review these on the merits and treated them as if the NAD had recommended they be discontinued. The NAD noted that even if a customer is later informed that a post is sponsored, if a customer first makes contact with a brand through a deceptive practice, like a misleading social media advertisement, it is misleading.
Boxed Water is Better® (Boxed Water), Report #7385,NAD/CARU Case Reports (May 2025): The International Bottled Water Association challenged claims made by Boxed Water is Better, related to its recyclability, tree planting, environmental impact, renewability, and sustainable sourcing.
- Recyclability and Renewability Claims.The NAD found that Boxed Water is Better's claim that it is "100% Recyclable" was supported because it is made of fiber, aluminum, and plant-based plastic, all of which can be recycled. However, it recommended modifying the claim that its "carton is made from 92% renewable materials" because it was based on a method of weighing materials that is likely unknown to customers. Additionally, the NAD recommended discontinuing the claim that "For those times when reusable bottles aren't an option, our paper-based cartons are the most renewable option in the water aisle" because Boxed Water is Better did not provide evidence to support superior renewability. The NAD also recommended modifying the "sustainably sourced" claim to more clearly explain the metric used to measure sustainability.
- "Better" Claims. Boxed Water is Better also made several claims that boxed water was "better" than plastic or other materials. The NAD noted that a "better" claim may be puffery that does not require substantiation when used in a standalone context but can be an objective claim that does require substantiation if used against a specific object of comparison. The NAD concluded that Boxed Water is Better had compared specific attributes of boxed water to specific attributes of other materials and required substantiation. Ultimately, the NAD found that a report later submitted by Boxed Water is Better supported the claims.
Crowell & Moring summer 2025 associate Jaci Jedrych contributed to this article.
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