New York, New York – The National Advertising Division of the Council of Better Business Bureaus has recommended that Coastal Contacts, Inc., discontinue an “up to 70 percent” savings claims and modify advertising that promoted “free” products.
Further, in a case of first impression, NAD – the advertising industry’s self-regulatory forum – reached a determination regarding the messages conveyed by general social-media endorsements, and more specifically, the endorsements signified by “likes” on Facebook.
The claims at issue were challenged before NAD by 1-800 Contacts, Inc. NAD reviewed express claims that included:
- “Like This Page! So you too can get your free pair of glasses!”
- “Save 70% and Get Fast, Free Shipping!”
- “Save over 70% on Contact Lenses.”
- “Save Over 70% Off Weekly Contacts.”
- “Contact Lens Coupon – Save on Brand-Name Lenses”
- “Save 70% & Get Fast, Free Shipping!”
- “Contact Lens – Save Over 70% Off Weekly Contacts
- “Get Free Shipping on Your Order”
In addition, NAD reviewed claims that referenced the manufacturer suggested retail price, or MSRP, as well as the advertiser’s references to the number of people on Facebook that have “liked” the Coastal Contacts’ Facebook page and the process through which the advertiser has obtained such consumer endorsements.
NAD noted in its decision that the advertiser’s offer of “free” merchandise came in the form of a Facebook-based “like-gated” promotion, a popular addition to many corporate social-media campaigns.
Although the advertiser modified the “Free Glasses” promotion, the original promotion was running at the outset of NAD’s inquiry and NAD reviewed both the original and revised promotion.
The original “Free Glasses” promotion stated: “Like This Page! … So you too can get your free pair of glasses!” Although additional terms and conditions applied to this offer, this information was not available to consumers until after they entered the promotion by “liking” the advertiser’s Facebook page. NAD recommended that Coastal Contacts, in future advertising, provide a clear and conspicuous explanation of the addition terms and conditions at the outset of any promotional offer of “free” merchandise.
With respect to the modified “Free Glasses” promotion, NAD determined that the limit on the total number of glasses available should appear in the main claim, and not as part of the disclosure. In addition, to avoid conveying the unsupported message that participating consumers would pay nothing for a pair of glasses, NAD recommended that the advertiser clearly disclose the approximate cost of shipping and handling immediately below or alongside the main claim. Finally, because the disclosure may not appear on the same screen as the main claim, NAD recommended that the advertiser enhance the “*conditions apply” notice as well as increase the font size of the disclosure.
NAD further determined that the display of the total number of “likes” on Coastal’s Facebook page conveys a general social endorsement. NAD determined that the display of Facebook “likes” on a company’s Facebook fan page can mean many things to consumers, including that consumers like the company, product or service, that the individual who “liked” the content entered a like-gated promotion contest or sweepstakes, or that the consumer wanted to share some content on the company’s page with their “friends.”
Because actual consumers “liked” the Coastal page, and those consumers who participated in the like-gated promotion received the benefit of the promotion, NAD determined that Coastal does in fact have the general social endorsement that the “likes” convey.
NAD noted for the record, however, that the outcome of the case would have been quite different if the evidence in the record demonstrated that consumers who participated in the like-gated promotion could not or did not receive the benefit of the offer, or that the advertiser used misleading or artificial means to inflate the number of Facebook “likes.”
With respect to the statements made in press releases to the investor community, NAD recommended that Coastal clarify that the number of Facebook “fans” or “likes” noted in the press releases is based on the total number of “fans” or “likes” the Company has received from all of its Facebook pages globally.
NAD noted its appreciation for the advertiser’s voluntary discontinuation of the challenged savings claims of “70%” and “over 70%,” an action NAD deemed both necessary and proper.
With respect to the modified “Up to 70%” savings claim, NAD determined that the advertiser’s evidence does not demonstrate that a substantial number of consumers can typically expect to achieve a 70% savings on contact lenses purchased through Coastal Contacts. Therefore, NAD recommended that the advertiser also discontinue its use of the “Up to 70%” savings claims.
Finally, NAD recommended that, in addition to discontinuing the use of an MSRP, the advertiser also discontinue the use of a suggested retail price (“SRP”) for its private label brand glasses.
The company, in its advertiser’s statement, said that while Coastal does not agree with all of the NAD’s recommendations, it will make appropriate adjustments to its advertising consistent with those recommendations.
NAD’s inquiry was conducted under NAD/CARU/NARB Procedures for the Voluntary Self-Regulation of National Advertising. Details of the initial inquiry, NAD’s decision, and the advertiser’s response will be included in the next NAD/CARU Case Report.
About Advertising Industry Self-Regulation:
The National Advertising Review Council (NARC) was formed in 1971. NARC establishes the policies and procedures for the National Advertising Division (NAD) of the Council of Better Business Bureaus, the CBBB’s Children’s Advertising Review Unit (CARU), the National Advertising Review Board (NARB) and the Electronic Retailing Self-Regulation Program (ERSP). The NARC Board of Directors is composed of representatives of the American Advertising Federation, Inc. (AAF), American Association of Advertising Agencies, Inc., (AAAA), the Association of National Advertisers, Inc. (ANA), Council of Better Business Bureaus, Inc. (CBBB), Direct Marketing Association (DMA), Electronic Retailing Association (ERA) and Interactive Advertising Bureau (IAB). Its purpose is to foster truth and accuracy in national advertising through voluntary self-regulation. NAD, CARU and ERSP are the investigative arms of the advertising industry’s voluntary self-regulation program. Their casework results from competitive challenges from other advertisers, and also from self-monitoring traditional and new media. NARB, the appeals body, is a peer group from which ad-hoc panels are selected to adjudicate NAD/CARU cases that are not resolved at the NAD/CARU level. This unique, self-regulatory system is funded entirely by the business community; CARU is financed by the children’s advertising industry, while NAD/NARC/NARB’s primary source of funding is derived from membership fees paid to the CBBB. ERSP’s funding is derived from membership in the Electronic Retailing association. For more information about advertising industry self-regulation, please visit www.narcpartners.org.