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This year's National Advertising Division's (NAD) Annual Conference demonstrated that the self-regulatory process remains an active venue for companies interested in challenging competitor advertising claims. Attorneys from Venable's Advertising and Marketing Group represent both advertisers and challengers at all levels of the NAD process, and this year has been particularly busy with NAD challenges. Read on for this year's conference highlights and what to expect from NAD.
Industry Trends and Products in NAD Challenges
NAD continued to see a wide array of industries take advantage of the self-regulatory process, with the most prevalent being telecommunications, dietary supplements, cosmetics, household products, food & beverage, and infant products. Companies brought challenges against claims involving product efficacy, superiority, environmental claims, certifications, and more.
Substantiation Remains Key in Defending Advertising Claims
In reviewing advertising claims, NAD stressed its goal to balance expeditious resolution of cases while thoroughly reviewing all claims and substantiation. NAD highlighted its expertise and familiarity with all forms of advertising claims, noting its ability to scrutinize complex issues and supporting evidence. Relatedly, consumer reviews and testimonials used in advertising continue to be scrutinized by regulators and competitors, including how they are collected, moderated, displayed, and featured.
Focus on Social Media and Influencer Marketing to Young Audiences
Underscoring the prevalence of social media advertising targeted at younger audiences, as brand loyalty is often established during the teenage years, NAD spotlighted its own research on influencer marketing. Influencers, gamification, and other marketing channels are ubiquitous, as companies continue to find ways to connect with younger audiences. NAD warned that such advertising will be scrutinized, a sentiment echoed by Federal Trade Commissioner Mark Meador.
How Regulators Are Keeping Up with Artificial Intelligence
Companies speaking at NAD stated they are now routinely integrating artificial intelligence into their advertising, ranging from enhancing existing marketing materials to generating images, videos, and advertising copy. These advertisements raise a host of issues, including legal risks, accuracy, reliability, and ethical considerations.
NAD has already issued several decisions relating to AI and advertising involving some of the most well-known AI companies but acknowledged that being flexible remains imperative as AI grows at the pace of innovation, not regulation. Bureau of Consumer Protection Director Christopher Mufarrige remarked that while the FTC remains focused on guarding consumer rights, it wants to promote AI development and is wary of stifling innovation through excessive regulation.
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