Navigating the World of Advertising Claims

From niche brands to emerging private labels to a highly evolved and sophisticated consumer palate, disruption can be found throughout the food and beverage industry today.  As one of the last bastions not yet fully disrupted by e-commerce, arguably the most competitive space in retail today is the grocery store. To stand out, brands often incorporate advertising claims and third-party recognition into their package design. As a brand, it’s critical that these claims are specific and valid to distinguish your product from competitors and reaffirm your brand as trustworthy.

With an average of almost 30,000 brands to choose from across dozens of aisles, influencing consumers is a daily challenge given that most products are presented on traditional shelving. Traditional shelving limits exotic forms of capturing attention and demands influence within less than a second. Especially when comparing products to purchase, some consumers don’t have the time to conduct their own research, so they will often base their purchasing decisions on label claims such as “award winning” or “tested by experts.” For example, describing a product as “the world’s best energy drink” is eye-catching, but is it significant or backed up by a credible third party or anything measurable? As there is no realistic method of claiming a product as “world’s best,” using these words could have a negative impact on a consumer as they lack authenticity and expose the company to legal challenges, and could be considered puffery.

Substantiating ad claims

A foundational aspect of ad claims is substantiation. As enforced by the Federal Trade Commission (FTC), all advertising claims must be substantiated, whether expressed or implied. For clarity, an expressed claim is the literal statement made by a brand that can be objectively proven (for example, “made from organic ingredients”). If there is an indirect claim or inference made about a product’s characteristic or performance—such as “milk is a good source of calcium and help prevents osteoporosis”—that is an implied claim. Both claims must be backed by reliable scientific evidence to support the statements that are communicated to consumers.

Understanding different claims

According to the American Society for Testing and Materials (ASTM) standards, when making a claim, start by defining the communication you want to make. This statement will guide the brand and sensory team’s test design in order to substantiate the claim. Further consideration should be given towards understanding that a brand team needs to support every reasonable interpretation of a claim, not just the intended one.

Beyond expressed and implied claims, claims come in other forms, too: Comparative and non-comparative. Comparative claims highlight similarities or differences between products. Generally, there are two types of comparative claims—parity (equivalent level of performance or liking) or superiority (higher level of performance or liking). Each can be further sub-classified into either hedonic (measure preference—“Tastes as good as Brand Z”) or attribute/perception (measure intensity of attributes – “Our shortbread is as buttery as the leading brand).

Non-comparative claims show something specific about a product, not relative to a competitor. These claims can also be sub-classified into either hedonic (“Tastes great”) or attribute/perception (“Real beef flavor”).

As ASTM states, there are two main testing methods for substantiating claims and each can be designed to achieve certain outcomes depending on the goal of the tests. These two methodologies are consumer testing and laboratory sensory (or expert panel) testing. For claims based on preference, like “Brand X preferred over Brand Y,” consumer tests asking preference questions are needed to substantiate the claims.  Attribute or performance based claims can be built on both consumer and expert panel testing—both must be designed to measure specific the attributes being made in the claims.

Pitfalls of false claims

Whether making an expressed or implied claim, it is especially important for brands to make sure that product ad claims cannot be deemed as false. If an ad claim can be disproven via experimentation, the brand could be exposed to a financially catastrophic lawsuit or a marketer’s nightmare: irrevocable brand damage.

One instance of a false claim can be seen with POM Wonderful, a brand that the FTC filed a complaint against in 2010 for deceptive advertising around health claims allegedly unsupported by scientific evidence. After investigation and a trial, a federal judge ruled in favor of the FTC and eventually the U.S. Supreme Court denied POM Wonderful’s request for an appeal. The result of this trial may have cast doubt about the health claims and credibility purported by POM Wonderful. And it isn’t just the FTC who can expose false claims. The Food and Drug Administration (FDA), National Advertising Division and even everyday consumers all have the power to research the validity of a claim. The misrepresentation of food through packaging is also known as “food fraud,” which can cost the industry $10-15 billion a year.

Advertising claims can be a valuable tool for brands looking to stand out in the sea of grocery store products where competition has never been greater.  With lower barriers to entry, brand competition in online channels is fiercer than ever, requiring fresh tools to distinguish and prove a brand’s clout and ability to satisfy. Claims backed by the right messaging and research mean consumers can rely on advertising to encourage trial, influence their purchasing decisions and develop brand loyalty. With supermarkets totaling more than $680 billion in sales in 2017, this a significant opportunity for brands to establish relevance. When executed correctly, truthful and compelling ad claims can have lasting beneficial impacts for consumers and brands alike.