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On August 1, 2017, the Advertising Self-Regulatory Council (ASRC) and Council of Better Business Bureaus (CBBB) announced that Laura Brett has been appointed as director of the National Advertising Division (NAD). Ms. Brett has served as Acting Director of NAD since Andrea Levine, former Director of NAD, retired after 20 years as NAD Director. She joined NAD as a Staff Attorney in 2012 and was later an Assistant Director. Prior to joining NAD, Ms. Brett was a litigator at Willkie Farr & Gallagher and a solo practitioner. She was also a member of the Rye City Council and Deputy Mayor of Rye, NY.

At NAD, Ms. Brett has authored decisions in numerous cases challenging the adequacy of disclosures in native advertising formats, sponsored content, and other online and social media advertising issue. Before the FTC adopted its long-awaited native advertising guidance, Ms. Brett used the NAD’s self-monitoring authority to fill a regulatory gap and bring several challenges of native advertising. In her decisions, she pushed for improved disclosures and provided detailed guidance for companies engaged in novel forms of online advertising. She has not shied away from using NAD’ s authority to challenge the advertising practices of well-known tastemakers with large social media followings, challenging the Kardashians and Kate Hudson this year.

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This year, digital media spending is expected to outstrip spending on traditional media, such as television and print. Advertisers, lured by the promise of precise targeting, better ability to measure return on investment, and changing consumer media consumption patterns, have poured money into digital at an almost exponential rate. And, while there are studies (largely by digital media agencies) documenting the effectiveness of such advertising, there remain major questions regarding the effectiveness and efficiency of such spending.

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Photo Credit: Jason Trim (Flickr)

Vizio Reaches $2.2 Million Settlement With FTC, New Jersey, For Failing to Obtain Viewer Consent to Track and Sell Viewing Habits to Third Parties

Traditionally, advertisers purchase ad inventory during television programs based on basic demographic information regarding viewer attributes. Thus, while ads may reach viewers of a particular gender and age range, those ads may not necessarily reach the consumers that are most interested in their products or services.  Thus, advertisers are increasingly interested in more finely targeting their advertising and sending a specific television commercial to a specific household based on the viewing activities in that household.  In order to pinpoint their targets, marketers rely on data extending beyond demographic information that includes information on consumer viewing and internet habits.  While targeting commercials to specific households can be highly beneficial to marketers (allowing them to send their ads to the consumers most interested in seeing them) and consumers (showing them the ads they most want to see), marketers must remember that the basic requirements of advertising law still apply.  Thus, in collecting data, marketers must ensure that they clearly disclose their data collection practices up front, obtain consent from consumers before collecting and sharing highly specific information regarding their viewing practices, and make it easy for consumers to opt out.

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Photo credit: Bernard Spragg (Flickr)
Photo credit: Bernard Spragg (Flickr)

On February 10, 2017, the Federal Bar Association will host a day-long Fashion Law Conference at Parsons School of Design (Starr Foundation Hall in the New School’s University Center) during New York Fashion Week!

Please join Crowell & Moring’s Frances Hadfield and Preetha Chakrabarti, as well…

The incoming administration promises big changes to federal consumer protection administration and enforcement. On January 5, 2017, Crowell & Moring’s Advertising & Product Risk Management Group hosted a webinar in which they discussed likely changes on the horizon to the Federal Trade Commission, Federal Communications Commission, and Consumer Financial Protection Bureau.

Please click here to

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At this year’s National Advertising Division (NAD) annual conference in New York City held on September 29-30, the hot news was old news—speakers from NAD, FTC and various stakeholders emphasized a back-to-basics focus.

For instance, Crowell & Moring’s Chris Cole moderated a panel on product demonstrations. The panel discussed recent NAD decisions, but these recent decisions revolved around the fundamental principles that product demonstrations must accurately reflect how the advertised product works, and must be adequately substantiated.

Even panels on “newer” advertising forms, like native advertising, came back to the concept that consumers should be provided enough information to know who is the author or promoter behind an “info-tisement,” so that they can weigh the information accordingly. Again, the themes of reasonable consumer expectations, accurate information, and adequate support reigned supreme.

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The choices facing American consumers are no longer just “paper or plastic” or “do you want fries with that?” Today, when strolling the aisles of a grocery store, customers have the option to buy local, organic, gluten-free, low-carb, or any other of a dozen choices. The local coffee shop offers a selection of responsibly-sourced coffees, shade grown coffees, and beans from Ethiopia, Yemen, or Guatemala. What savvy companies and marketers have realized is that American consumers like choice and they like to feel good about the products they buy.

And global trends— like safety concerns about foreign-made products, interest in supporting a flagging U.S. economy, or just plain patriotism—may encourage consumers to change their buying patterns—in favor of American goods. Smart manufacturers and marketers understand this and know that customers may be willing to pay a premium for American quality goods. And so, unsurprisingly, smart companies are doing what they can to make and market products as “Made in America.”

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A California state court recently issued a preliminary ruling proposing to assess a statutory penalty against online discount retailer Overstock.com in the amount of $6.8 million for engaging in allegedly false and misleading discount advertising.1 Overstock.com was alleged to have advertised discounted prices that were pegged to the company’s own uncorroborated estimate of undiscounted retail value, rather than on actual data. The case highlights the risk that both online and brick-and-mortar retailers face if they advertise “discounts” from “regular” prices that have never actually been offered in commerce, in violation of the Federal Trade Commission guidelines against deceptive advertising (“FTC Guides”). The case also signals a major new threat to retailers engaging in these kinds of marketing strategies, which are common in the industry.

The Overstock.com case began in 2010, when a group of California district attorneys filed a private action under California’s False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act. Their complaint alleged that Overstock.com “routinely and systematically made untrue and misleading comparative advertising claims” by comparing its retail prices to “advertised reference price(s)” (ARPs) that were not the prevailing market prices for its products. The district attorneys claimed that Overstock.com instead used misleading internal formulas designed to “inflate the comparative prices and artificially increase the discounts it claimed to be offering consumers.” The complaint also alleged that because Overstock.com was no longer merely a reseller of distressed merchandise, but was now actively engaged in original design, production and sale of a wide variety of products, it could not possibly advertise a “discount” for such products that were never sold at an undiscounted price.

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