Truth in Advertising Has Never Been More Challenging… or More Important

October 29, 2019
Author: Tom Rosholt
Truth in Advertising Has Never Been More Challenging... or More Important

There was a time when brands had near-complete control over what was said about their offerings, as they were the ones doing most of the talking. Even the casual observer knows this is no longer the case. The proliferation of technology, data and digital communication has put an ever-increasing amount of control in the hands of consumers. Nowadays, an assertion made by a brand regarding the benefits of an offering, i.e., an advertising claim, can readily be verified through objective measurement or subjective experience, and the results easily shared with a global audience.

This democratization of information has been great for individuals (ask anyone who has recently purchased a motor vehicle), but has it benefited brands as well? The answer is a hearty but qualified yes. In order to reap the benefits of this paradigm shift, it is incumbent on brands to be honest. It is well-established that deception is toxic to any relationship, including that of brands and consumers. Honest brand management and communication helps build trust and works toward the holy grail of brands, authenticity. Conversely, a deception is likely to be uncovered, leading to backlash that often negates any short-term gains. The news has been rife with high-profile examples of this in recent years, leaving many offenders with an expensive and years-long effort to rebuild trust in the brand.

If the truth is both powerful and necessary when building trusted and authentic brands, why are false or misleading advertising claims still out there? The answer: the truth isn’t always easy. Let’s look at some of the forces at work that cause even highly reputable brands to occasionally make claims that are ultimately judged to be false or misleading.

Advertising speech in the US is regulated. The FTC lays it out plainly: “federal law says that [ads] must be truthful, not misleading, and, when appropriate, backed by scientific evidence.” Most advertisers spend a fair amount of time and money to collect this type of information to support their claims. When the science is done in good faith but a claim still falls short of the truth standard, it is usually because there is a disconnect between the science and the manner in which the advertiser expresses the claim. For example, if a given product is shown to be preferred over a competitive product but the people asked to compare the products were not representative of the population as a whole, the advertiser is being less than truthful if they make an unqualified preference claim.

There are several reasons that false or misleading claims are made. Here are some examples:

  • Navigating the regulatory landscape requires that advertisers have access to the appropriate legal and research experts, and many advertisers, particularly smaller ones, simply don’t have the required access.
  • The body of evidence intended to support a claim might be incomplete coupled with time pressures that do not allow for sufficiently robust science.
  • Some advertisers place short-term gain ahead of more noble pursuits like satisfying consumers and telling the truth and hope that consumers won’t know, care or remember.

Given the ever-increasing scrutiny by regulators and competitors and the infinite memory of the internet, it is natural to wonder why an advertiser would take on the risk associated with making an advertising claim that is not fully supported. Many industry categories are saturated with highly optimized offerings, creating an economy of virtually unlimited choice. This creates two opposing forces—the differences between offerings is shrinking while the need to stand out is growing. Further hampering an offering’s ability to stand out in a world of unlimited options is that consumers will always have limited bandwidth. Getting a consumer to tolerate a brand’s interruption and devote some attention to it often feels like an impossible task, requiring companies to create advertisements that hit the tiny sweet spot of personal relevance, contextual relevance, and enjoyment.

The good news for brands is that despite the challenges created by the complex consumer, marketplace and regulatory landscapes, brands that communicate the truths of functionality and experience tend to build healthier, more profitable and more enduring brands (check out Unerman and Baskin’s “Tell the Truth” for more on this). Truth in advertising is the only brand communication strategy that meets the ultimate desires of both consumers and brands, allowing consumers to make informed choices and brands to build and nurture authentic and valuable consumer relationships.

Tom Rosholt, Principal, Claims Research / Vice President, Analytics
Tom Rosholt
Principal, Claims Research / Vice President, Analytics

Tom Rosholt is a vice president and principal of advertising claims research practice in the Marketing and Data Sciences division at Escalent. Tom helps brands enhance their value by telling the truth in their advertising. He is nationally recognized as an expert in ad claim substantiation, statistical analysis, and the advertising self-regulatory process. Before joining Escalent, Tom spent 12 years as the senior statistician in the consumer research department of a major consumer goods company, eight years teaching college mathematics and statistics, and five years in tax policy research with a state agency. He holds an MA in mathematics from the University of Minnesota and a BA in mathematics/computer science from Luther College. Tom is particularly proud of his ability to explain technical topics to non-technical audiences.