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NARB Quarterly - Summer 2007 (Volume No. 5)
LETTER FROM THE CHAIR
Howard BellWith this publication of the NARB Quarterly, we would like to welcome all of our new NARB members and to thank those retiring NARB veterans who have served us so well.

It is the participation of NARB volunteers that sustains the high quality of decision-making that has allowed the advertising industry system of self-regulation to be recognized as the best self-regulatory body in American business.

In this mailing, you should have a list of new NARB members, a list of those leaving and a complete list of the NARB membership. You should also have a copy of a new book, authored by Jim Guthrie, former President and CEO of the National Advertising Review Council, which gives a complete overview of the self-regulatory system, along with a brief history. I hope you will enjoy it!

In this edition of the Quarterly, you will find summaries of our recent appeals decisions in the Perdue and Malt-O-Meal cases. Panelists who heard the Perdue appeal had to consider important questions regarding the self-regulatory system's interpretation of a federal regulatory determination. In Malt-O-Meal, panel members had to consider the evidentiary weight that should be placed on ASTM standards in the construction of a survey.

You'll also find information on the Annual NAD Conference, which has become the premier legal conference of the advertising self-regulation system. This year's conference features three past and present NARB panelists - Robin Hafitz, CEO of Open Mind Strategy; Tim Love, Vice-Chair, Omnicom, and Mark Serrianne, CEO of Northlich. We will be extending a special invitation to NARB members to attend this conference. I hope to see you there.

This has been a remarkably busy year for NARB. We have handled 9 appeals, with 4 hearings yet to be convened. So you can anticipate receiving a call from NARB Director Bruce Hopewell asking for your participation in an upcoming NARB panel hearing.

Your willingness to make yourself available to serve as a panel member is essential to the continued success of this forum. We thank you in advance for your time and dedication.

Until then, my warm regards,
Howard Bell
Chair, NARB

PANEL UPDATE
NARB Panel #140
March 13, 2007
For full text of Panel Report #140 (PDF format) click here
Appeal of NAD Final Decision Regarding Advertising for Malt-O-Meal Company

Background This case arose from a challenge filed by General Mills, Inc. ("General Mills") concerning claims made by the Malt-O-Meal Company ("Malt-O-Meal") on product packaging and in print advertising for its cereals.

NAD found that Malt-O-Meal's claim "Betcha Can't Taste the Difference," as used on its packaging and in advertising to compare various Malt-O-Meal cereals to those of other manufacturers, would be perceived by reasonable consumers as implying that the taste of Malt-O-Meal cereals was the same as the cereals that were the object of the comparison. NAD found that Malt-O-Meal did not have sufficient substantiation for this claim, and recommended that it be either discontinued or modified.

Findings and Conclusions The panel agreed with NAD that Malt-O-Meal's tests were sufficiently flawed and that they did not provide adequate substantiation for the claims at issue. The most significant flaw is the provision of sugar in tests of pre-sweetened cereal pursuant to a test methodology that instructs consumers to add sugar as desired.

The panel also agrees with NAD that provision of only 2% milk could compromise the test results for consumers who do not regularly use 2% milk in their cereal.

While the panel recognized NAD concerns over use of "agree/disagree" questions, and the lack of a "no response" option, the panel did not believe that the record was complete enough to permit a determination as to whether these were material flaws in Malt-O-Meal's testing. There is an ongoing debate in the testing community, as highlighted in relevant ASTM standards, as to the necessity of providing a "no response" option. The panel also recognizes there is disagreement in the cited literature about the prevalence of a "yea-saying" bias.

General Mills submitted independent consumer taste tests comparing three of the Malt-O-Meal cereals at issue with their General Mills counterparts. Results of those tests indicated not parity but rather that consumers preferred the General Mills products. While the panel does not need to rely on the General Mills tests, since Malt-O-Meal did not meet its initial burden to provide substantiation of the parity claims, the panel notes that the General Mills tests appear to be better designed than the Malt-O-Meal tests and provide additional support for the panel's conclusions in this case.

In summary, the panel found that Malt-O-Meal's testing was sufficiently flawed as to not provide a reasonable basis for the parity claims advertised by Malt-O-Meal. Since this testing was the only substantiation provided in support of its parity claims, the panel agrees with NAD that the parity claims were not substantiated.

Decision The panel recommended that Malt-O-Meal either discontinue its claim, "Betcha Can't Taste the Difference," or modify the claim so that (1) the "Betcha" phrase and guarantee are in close proximity to each other and are part of the same thought, and (2) the guarantee is inextricably linked to the "bet" the advertiser is making about its product.

The panel also recommended that Malt-O-Meal discontinue claims that specific Malt-O-Meal products are as good, taste as good, taste the same, or are liked as much as the competing products they are targeted to match.

Panel #140, NARB Board Members:

  • Dr. Jan LeBlanc Wicks (Chair), Professor, University of Arkansas
  • Abby Elu, Manager, Learning & Development Global Advertising Services, Campbell Soup Company
  • David E. Grueneberg, Director of Advertising Resources, Bristol-Myers Squibb Company
  • Robin Hafitz, Chair, Open Mind Strategy
  • Elaine Lawson, Senior Manager - National Marketing, Verizon Communications

NARB Panel #141
March 14, 2007
For full text of Panel Report #141 (PDF format) click here
Appeal of NAD Final Decision Regarding Advertising for Perdue Farms Incorporated

Background This case arose from a challenge filed by Kraft Foods Global, Inc. ("Kraft") concerning claims made by Perdue Farms Incorporated ("Perdue") on labels and in print advertising for Perdue Short Cuts poultry products.

NAD found that use of the phrase "no preservatives" was inconsistent with consumers' reasonable expectations because Perdue Short Cuts poultry products contain two ingredients that are used as preservatives. NAD similarly found that use of the phrase "Fresh Fully Cooked" was inconsistent with consumers' reasonable expectations because the products contained preservatives and were subject to high pressure processing.

Findings and Conclusions The panel has determined that the "no preservative" claim would be reasonably interpreted by consumers as confirming the absence of any ingredients that have an antimicrobial effect as used in that product, even if that effect is secondary to other ingredient attributes.

FSIS regulations set the same limits for sodium diacetate when it is used as a flavoring agent or an antimicrobial agent. Additionally, the regulations do not specify a minimum concentration level at which sodium diacetate or sodium lactate may be used as antimicrobial agents. Perdue conceded that, even in the 2.0% or lower concentrations found in Perdue Short Cuts poultry products, sodium diacetate and sodium lactate have "secondary" antimicrobial effects. The panel believes that reasonable consumers would not expect to have these ingredients in a product labeled as having no preservatives, even if these ingredients could be used at higher concentration levels to achieve greater antimicrobial effect.

The panel considered use of the word "fresh" in the context in which it appears on Perdue's labels, with the additional description that the product is "fully cooked."

NAD precedent indicates that reasonable consumers are likely to interpret "fresh" as meaning that a food is unprocessed and has not been frozen or subjected to other forms of preservation. In this proceeding, no consumer perception evidence was submitted with regard to how consumers reasonably interpret "fresh fully cooked." The panel believes that reasonable consumers would likely interpret this phrase as meaning that the product was fresh at the time it was cooked and was not subjected to processing other than whatever was involved in cooking. The panel agrees with NAD in this case that reasonable consumers would likely interpret "fresh fully cooked" as meaning that the product does not contain preservatives, and also that the product was not subject to processing such as the high pressure processing used as part of Perdue's efforts to decrease the growth of pathogens.

Decision

The panel recommended that Perdue discontinue use of the terms "no preservatives" and "fresh" on meat and poultry products that contain sodium diacetate and/or sodium lactate in concentrations sufficient to have any antimicrobial effects. The panel also recommended that Perdue discontinue use of the term "fresh" on meat and poultry products that have been subjected to high pressure processing.

Panel #141, NARB Board Members:

  • John Kamp (Chair), Executive Director, Coalition for Healthcare Communications
  • Jack Haber, Vice President, E-Business, Colgate-Palmolive Company
  • Robin Hafitz, Chair, Open Mind Strategy
  • Michael Scherb, Director, Corporate Advertising and Branding, PSE&G
  • Mark Wolf, Manager, Market Research, Guardian Life Insurance Company of America
Events
The NAD Annual Conference, scheduled for September 24 and 25 at New York City’s W New York Hotel, 541 Lexington Ave., is being held in conjunction with Advertising Week 2007. Panelists will explore issues that include consumer testimonials, the science behind claim substantiation, class-action litigation and the potential pitfalls and benefits of consumer-driven advertising. The conference also will provide attendees with practical information to enhance their ability to navigate the advertising industry’s self-regulatory forum.

Scheduled speakers include Jon Leibowitz, Commissioner, Federal Trade Commission, who will address the FTC’s approach to advertising enforcement, and Scott Cotherman, CEO of Omnicom’s Corbett Accel Healthcare Group, who will discuss advertising and ethics in today’s “fast-forward” marketing environment.

Among the scheduled sessions: “Consumer Perception: The Fine Art of the Consumer Survey” and “The Child Audience: Food, Phones & the Net.”

Up to 13 Credits for Continuing Legal Education This course has been submitted for approval in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 12 professional practice credits.

Accreditation will be sought in those jurisdictions requested by registrants which have continuing education requirements.

Conference Rates Early Bird Rates CBBB Members $1,260 / CBBB Non-Members $1,550

After August 17th CBBB Members $1,360 / Non-Members $1,650

Conference Location The W New York Hotel 541 Lexington Avenue, New York, NY

To Register for this Conference Visit: www.NARCpartners.org

Please direct conference questions to: Bruce Hopewell at bhopewell@narc.bbb.org or 212-705-0114



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