Are the Reviews In? Using Online Review Evidence for Advertising Claim Support
It is a fact of modern commerce that consumers consider online reviews when deciding how to spend their dollars on everything from music, to local restaurants, to electronics. But what happens when a business wants to use those reviews to formulate advertising claims?
In June, the National Advertising Division of the Council of Better Business Bureaus addressed the issue in a decision against Euro-Pro Operating, LLC. Euro-Pro used online consumer reviews to support its claim that its “Shark” brand vacuum cleaners were “America’s Most Recommended Vacuum Brand.” Euro-Pro made this claim in television ads, infomercials, online ads, and on product packaging. In most placements, the claim was accompanied by a disclosure that the claim was “based on percentage of consumer recommendations for upright vacuums on major national retailer websites through August 2013, U.S. Only.” According to Euro-Pro’s analysis, consumers recommended their Shark vacuum cleaner 94.2% of the time, besting the rate of the next closest brand, Dyson, which was recommended 89.9% of the time. Dyson brought a challenge before the NAD, giving the advertising industry self-regulatory body its first opportunity to address advertising claims based on aggregated online product review data. As the NAD noted, the claim itself was not unique, but Euro-Pro presented “a new and interesting type of data in support of its claim.”
Dyson successfully argued that Euro-Pro’s claim communicated that the Shark products are the most recommended vacuum cleaners among all vacuum cleaner owners nationwide, not just those who -bought their vacuums online. The NAD found that the online review evidence relied upon by Euro-Pro was not sufficient to support this broad claim. The NAD also found that the disclaimer, which discloses that the claim is based on online reviews, would be interpreted by consumers to be a statement of method, and not a limitation or qualification of the scope of the claim.
The NAD ruled against Euro-Pro because of two key concerns about the data used to support the claim. The first concern was that Euro-Pro had not used a demographically representative sample to make its claim. The NAD determined that the consumers posting the reviews were not sufficiently representative of upright vacuum cleaner consumers in the United States. Market data showed that 84% of vacuum cleaners are purchased in brick-and-mortar stores. The NAD found that those who purchase vacuums online are more likely to submit reviews. To illustrate this, the NAD pointed to the fact that only 2% of vacuum cleaner sales were made through Amazon, but Amazon reviews accounted for over 40% of the online reviews. Online purchasers also preferred high-end expensive models. The NAD was not persuaded that Euro-Pro’s methodology adequately represented the views of the general American consumer or that there should be a less rigorous review of how statistically representative the sample was because of the volume of reviews considered. The NAD wrote, “This decision simply restates a fundamental principal of advertising law, that the data set submitted in this proceeding, like any other population sample, must be shown to be representative of the consumers that it purports to represent.”
In addition to not being representative enough to support the claim, the NAD further found that the online review data was not reliable enough to support Euro-Pro’s claim. The NAD reasoned that the fact that individual consumers rely on online reviews did not mean that they could necessarily be used as the basis for a broad advertising claim regarding the opinions of the consumer population as a whole. Specifically, the NAD questioned whether a sufficient number of those who submitted reviews were bona fide purchasers of the Shark vacuum. The NAD also questioned whether there were duplicate reviews or the same individuals making multiple recommendations. In this discussion, the NAD described the practice of some companies who “syndicate” reviews, meaning that the company itself takes a positive consumer review of its product and posts that review on multiple sites. There was also variation in the wording of how different sites prompted the consumer for a recommendation or not, and it was also unknown in many cases exactly why the consumer was recommending the Shark.
Euro-Pro argued that consumers understand the limitations of online reviews and understand that when an advertising claim is based on those reviews, those limitations should be taken into account. The NAD stated, “However, it is exactly that healthy skepticism and analysis that consumers use when looking at online reviews that demonstrate why they are not reliable when aggregated as substantiation for the type of broad, general ‘most recommended’ claim at issue. The advertiser’s claim, ‘America’s Most Recommended Vacuum Brand’ conveys the message that consumers do not have to look at online reviews to determine which product is the most highly recommended—because the advertiser has already done it for them.”
The NAD capped its decision by declaring and reminding advertisers that, “While NAD is open to advertisers using new technology and information to support their claims, the standards of truthfulness, reliability and representativeness to which advertiser’s substantiation is held to remain the same.” The NAD made clear that it was leaving the door open to using online reviews as the basis for advertising claims, if the claims were based on more scientifically sound data, stating that,“As more commerce and consumer interactions occur online, more useful data about consumer usage and preferences can be culled from the web” and that its decision “does not foreclose the possibility that ‘found’ or “crowd-sourced’ data could be aggregated in a way that represents a relevant population and used as advertising claim support.”
Euro-Pro stated that it intended to appeal the decision to the National Advertising Review Board and that it would modify its claim in the meantime to read “most recommended vacuum online.”
The NAD, the FTC, and state attorneys general have had other cases involving online reviews. In a case last year, the NAD recommended that an advertiser advise reviewers of their disclosure obligations when it provides incentives for posting online reviews about the advertiser, and that the advertiser disclose any incentives it provides for posts about the advertiser when the advertiser promotes or otherwise redistributes the posts. The FTC and state attorneys general have focused recently on enforcement actions involving fake, or “astroturfed,” product reviews.
As the Euro-Pro case shows, online product reviews used to substantiate advertising claims will be subject to the same analysis as any other form of substantiation. Thus, not surprisingly, while more data is freely obtainable online and more consumer voices can be heard online, the basic legal principles remain the same.
For more information, please contact Eric Unis or John Hutchins.
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