Shining a light on NAD: How self-regulation maintains truthfulness in personal care and supplement advertising

Since 1971, BBB National Programs’ National Advertising Division (NAD) and its appellate review arm, the National Advertising Review Board (NARB), have been working to build consumer trust in advertising and support fair competition in the marketplace by monitoring national advertising for truthfulness and accuracy.

The U.S. advertising industry created this robust system of self-regulation to review claims across all media and industries, holding national advertising to truthfulness standards set primarily by the Federal Trade Commission (FTC).

Cases come to NAD through challenges brought by businesses, trade associations, advocates, consumers, or its own initiative, and those case decisions represent the single largest body of decisions interpreting advertising law in the U.S.

In 2023, personal care products, dietary supplements, food and beverages, and cosmetics or beauty product cases made up almost 40% of NAD’s total case load.

Enforcement trends

Over the last few years, there is an increased focus on truth in advertising, especially health-related claims, because of updated guidance and activity coming from FTC, including the release of updated and expanded Health Products Compliance Guidance in 2022 and publishing notices of penalty offenses in 2023, warning companies involved in the marketing of OTC drugs, dietary supplements, beauty, and personal care products of the penalties should they not be able to back up their product claims.

The law requires advertisers to have substantiation for all advertising claims, both express and implied, before making claims for any product. This requirement extends to the use of reviews, endorsements and testimonials in marketing, as reflected in FTC’s 2023 revised Guide for Endorsements and Testimonials.

The self-regulatory process

Challenges brought to NAD can be filed in several tracks. When the challenge involves a single issue, the challenge can be brought through the Fast-Track SWIFT filing track. Most cases are filed in the Standard track, which generally involve multiple claims. If the challenge involves complex evidence to substantiate the claim, the challenge can be brought through the Complex filing track.

Most NAD cases are brought by businesses who file challenges against a competitor’s advertising. Most of those challenges evaluate monadic claims in which the challenger takes issue with, for example, a competitor’s claims about the efficacy, composition or price of a product or service. A significant number of cases also require NAD to evaluate the truthfulness of comparative superiority or disparaging claims.

Another aspect of NAD’s review includes assessing express vs. implied claims. A brand may intend to convey one message in its advertising, but other messages, depending on context, can be implied through the advertising as well, and both express and implied claims must be substantiated.

Through the voluntary industry self-regulation process, unlike litigation, when a claim is challenged as misleading or unsupported, the advertiser has the burden to support its advertising claims. The advertiser’s supporting evidence must be reliable and a good fit for the challenged claims.

Generally, advertisers must possess a “reasonable basis” for claims disseminated in advertising.

At the conclusion of the case, based on its analysis and review of the evidence, NAD will make recommendations to the advertiser, requesting that the advertiser modify or discontinue any claims that cannot be substantiated. If a company does not comply with those recommendations or participate in the industry self-regulatory process, NAD will refer that company to the appropriate federal agency, often FTC. 

“Clinically proven” or “scientifically tested”

The appropriate level of substantiation for any claim depends upon the type of claim, the type of product, the consequences of the false claim, the type and amount of support that experts believe should support the claim, and the cost associated with supporting the claim. Health-related claims require a higher level of substantiation and generally require competent and reliable scientific evidence, as defined by the FTC, which includes, “tests, analyses, research or studies that (1) have been conducted and evaluated in an objective manner by experts in the relevant disease, condition, or function to which the representation relates; and (2) are generally accepted in the profession to yield accurate and reliable results.”

Additionally, when advertisers rely on studies to support health-related claims, they must ensure the study is not only competent and reliable but also the study results relate to the specific benefits being claimed. Claims like “clinically proven” or “scientifically tested” should be supported by the level of support described in the claim.

In a decision that was appealed to NARB regarding SlimFast food plans, NARB found a qualified claim that the SlimFast Plan is clinically proven was supported when the claim was used in proper context, but that product-related “Clinically Proven: Lose Weight and Keep it Off” claims appearing on product packaging were not supported because individual products had not been clinically evaluated in the same way that the SlimFlast plan had been.

“Doctor recommended”

“Doctor recommended” claims carry a great deal of weight with consumers and, therefore, must be supported by well-conducted physician surveys in which doctors base their conclusions on their actual experience.

In a challenge regarding a “#1 Dermatologist Recommended Skincare Brand” claim for Neutrogena, NAD and NARB determined the survey relied upon by Johnson & Johnson to support the claim did not provide adequate support for the lofty claim. NAD and NARB found the survey to have design issues, including questions addressing the use in the survey of umbrella categories and the degree of overlap in the categories without proper instruction for dermatologists to avoid double counting.

Claims like “Pediatricians prefer” can also convey a message to reasonable consumers that doctors generally recommend the product. In the Genexa decision, pediatrician preference claims such as “doctors have spoken” and “pediatricians prefer” were found to be unsubstantiated because the only evidence submitted was pediatricians prefer certain ingredients, not the product itself.

Aligning the study to the claim

As demonstrated in the Genexa decision, when an advertiser relies on clinical studies, it is important the studies match the claim. Claims that do not match the research results — no matter how sound the research — are also likely to be misleading.

In the MacuHealth challenge, NAD recommended certain claims for its dietary supplement products be modified or discontinued because, among other reasons, the studies submitted to substantiate the claims were not conducted on the products currently marketed to consumers. NAD noted significant differences between the formulas marketed to consumers and those tested.

If a study was not conducted on the current formulation of the product, or if the advertiser relies on studies of ingredients in the product but not the product itself, the study may not be a good fit for advertising claims about the product.

This was the issue in a Pamprin Botanicals dietary supplement challenge. NAD recommended Focus Consumer Healthcare discontinue advertising claims calling out the health-related benefits of individual ingredients found in the Pamprin Botanicals dietary supplement product.

A study on an ingredient that has the same dosage, formulation and route of administration as an ingredient in a product could provide support for a qualified claim if the advertiser can also show that other ingredients in the product will not impact the efficacy of the studied ingredient.

In addition, it is important that the study population is representative of the population to which the claim is targeted. For example, if the target population for the product is older women, the study should not test the effect of the product on young men.

Quick tips

Both consumers and brands benefit from truthful advertising and understanding the rules will help achieve that goal.