stayADvised: What's New This Week, July 29

Articles

• NAD Recommends Wink Natural Discontinue #mentalhealthawareness Hashtag, Other Unsupported Ad Claims
• Nectar Discontinues “Reduced Price” Claims Following NAD Challenge
• CBD and Cannabis Advertising – Recent Trends and Takeaways
• Monthly Privacy Round-Up -- DWT’s Privacy Oracle

NAD Recommends Wink Natural Discontinue #mentalhealthawareness Hashtag, Other Unsupported Ad Claims

The National Advertising Division (NAD) recently recommended that dietary supplement manufacturer Wink Naturals modify certain of its marketing practices when promoting its Zen Drops, including ceasing use of the hashtag #mentalhealthawareness.

Zen Drops is a dietary supplement made with passion flower extract and other ingredients. Wink primarily markets and promotes the product by touting its anxiety-fighting benefits in adults as well as children on product packaging, its website, social media, and other third-party advertising.

Wink’s use of the hashtag #mentalhealthawareness was one of the more serious challenged claims addressed by NAD. The company used the hashtag beside an image of a woman holding a bottle of Zen Drops, which constituted, according to the NAD, an implied claim that the product provides mental health benefits. However, the NAD concluded that none of the studies provided by the advertiser supported the claim that Zen Drops relieves anxiety or any other type of mental illness. Therefore, NAD recommended that the company discontinue using the hashtag in conjunction with images or claims regarding Zen Drops, as well as other hashtags it had used, including “#anxietyhelp,” “#mentalillnessisreal,” and “#anxiousness.”

NAD found the same with regard to Wink’s claims that Zen Drops is non-habit forming, since none of the studies cited by Wink focused on this claim.

NAD also took issue with other Zen Drops marketing claims that characterized the product as providing anti-anxiety benefits for adults and children, such as the express claim that “passion flower extract is the powerful, natural ingredient in our Zen Drops formula that’s clinically proven to provide natural, drug-free relief from feelings of anxiousness,” and the implied claim that Zen Drops can treat anxiety disorders in adults and children as well as or better than prescription medications and as a safer alternative without any side effects.

NAD did not examine the merit of these claims since Wink voluntarily agreed to cease making them before the review process. Similarly, Wink discontinued claims made on social media and through testimonials about the product’s ability to treat ailments from postpartum depression to concentration problems in children.

NAD did approve Wink’s claim that Zen Drops is drug-free.

Key Takeaways

Advertisers should use caution when using hashtags to promote products. When used in conjunction with other wording or images, hashtags could convey an implied claim – even if not intended – for which the advertiser may be responsible to support. Another takeaway here: “NAD determined that the studies referenced by Wink were not a good fit to support its claims for several reasons, including that the dosage of Zen Drops was not studied in any of the three studies submitted by the advertiser, and that the formulation of Zen Drops did not match those of the underlying ingredient studies.” The studies advertisers use to support claims should be precise and establish a clear connection between the findings of the study and the claims. Otherwise, as here, NAD may find they are “not a good fit to support” the claim.

Nectar Discontinues “Reduced Price” Claims Following NAD Challenge

Nectar mattresses may or may not be as comfortable as nectar is sweet, but the company’s “limited offer” advertisements may leave a bitter taste with consumers, at least according to the National Advertising Division (NAD). In its ruling on a challenge brought by competitor Tuft & Needle, NAD found that Nectar’s discount offer for its mattresses and pillows was unsupported and recommended the company discontinue the ads.

Nectar Sleep LLC ran ads touting a “LIMITED OFFER: $125 Off + 2 Free Pillows,” but competitor Tufts & Needle called foul on the claims which it claimed were misleading. The problem was two-fold, alleged Tuft & Needle. First, the mattresses had always been sold for the same price as the “limited offer” price, which meant the offer was no offer at all. Second, the challenger claimed that Nectar never sold any pillows, free or otherwise, effectively making Nectar’s offer for them as “free” with purchase misleading.

Nectar offered to permanently discontinue the claims when approached by NAD but, in a twist as juicy as the nectar of a peach, the company soon began promoting other similar ads that NAD essentially said amounted to a new version of the same old offer.

“When given multiple opportunities and ample time to discontinue the claim, Nectar failed to follow through on its representation. NAD therefore had no choice but to reach the merits of the case,” said NAD in its press release announcing its conclusions.

In its review, NAD found Nectar’s support for its claims lacking. It found no evidence that Nectar had ever been offered its mattresses at a price different from the deal offer. Rather, there was ample evidence that the same product had been marketed at the “regular” price, which was the same as the “limited offer” price.

With regard to the pillow claim, NAD was not swayed by Nectar’s contention that it had offered them for sale in the past. In fact, NAD found that any time a consumer tried to take advantage of the free pillow offers, the pillows were always out of stock.

“NAD recognizes that aggressive price competition serves to benefit consumers, but such benefits are only realized when savings claims are accurate and enable consumers to assess the value of a bargain or sale.”

Nectar said it would comply with NAD’s recommendations and that it had already taken substantial steps to remove the offending ads.

Key Takeaways

This matter is a reminder that any discount or free offer must be substantiated by, among other things, proof that the discount is real and not fictitious. An advertised sale must be based off a price at which products were actually offered for sale for a substantial period of time. The FTC has issued guidelines and various states have laws addressing these practices that must be honored in the marketplace. As NAD noted, “it is incumbent on advertisers not only to clearly communicate the price of the sale item, but to ensure that the savings promised is real and not based on a dramatic markdown of a fictitious price.”

CBD and Cannabis Advertising – Recent Trends and Takeaways

The Food and Drug Administration’s recent enforcement action against cannabis and CBD producer Curaleaf highlights the need for awareness and understanding of the federal and state laws applicable to advertising these heavily regulated products. This advisory identifies regulatory and legal trends affecting CBD and cannabis-related advertising and offers takeaways for advertisers and marketers to help mitigate risk in a rapidly changing regulatory and legal landscape.

Monthly Privacy Round-Up -- DWT’s Privacy Oracle

In this month’s issue of the Privacy Oracle, the DWT Privacy and Data Security practice group reports on various topics of interest for companies in all industry categories. The lead article discusses how the FTC has used its general consumer protection authority to investigate and prosecute privacy matters in the absence of a specific privacy law. Also covered is an update on the soon-to-be-finalized NIST Privacy framework, recent regulatory and legislative developments impacting COPPA, and the challenges in de-identifying data in the age of Big Data. And don’t miss this month’s Practitioner’s Corner, which provides tips on how in-house lawyers can work effectively with business stakeholders in order to achieve desired goals.