Advertiser Scraps TV Commercials, Rethinks Sweepstakes After NAD Inquiry

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November 4, 2015

NAD-inquiryLast month, The Scotts Company LLC (“Scotts”) discontinued certain television commercials and added new disclosures to its sweepstakes-solicited online reviews in response to a National Advertising Division (“NAD”) inquiry.

What prompted NAD’s investigation of Scotts’ marketing practices?

NAD Inquiry of Scotts’ Marketing Materials

NAD, an investigative unit of the Council of Better Business Bureaus (“BBB”), initiated an initial inquiry into advertising claims made by Scotts in connection with its Ortho Home Defense, Bug-B-Gon and Weed-B-Gon products. The NAD inquiry was spurred by challenges from competing insect and weed control company, United Industries Corporation (“United”).

United alleged that certain Scotts television commercials portrayed United’s Spectracide product in a false light with statements such as “Spectracide gives you year-long control of just roaches. The label says so.”

Additionally, United claimed that a Scotts sweepstakes promotion was misleading consumers by offering $25 Visa gift cards in exchange for product reviews without disclosing that an incentive was offered to post such reviews.

Scotts Overhauls Advertising Practices

In response to the NAD inquiry, Scotts permanently discontinued the subject television commercials and agreed not to “re-release the challenged commercials or online ads, or use the claims therein in the same form in future advertising.”

With respect to its sweepstakes promotion, Scotts added language to its online advertising materials stating that entrants were required to disclose that their reviews were being submitted in connection with entry into a sweepstakes promotion. To further address NAD’s concerns, Scotts directed its third-party customer review aggregator to apply a “Sweepstakes Entry” tag to each subject review.

NAD found that Scotts’ significant corrective actions in response to the subject inquiry (including scrapping its television commercials altogether) were “sufficient and proper.”

For Advertisers, Compliance Is Key

Marketers invest a great deal of time and revenue to promote their products and services. NAD inquiries, regulatory investigations and legal proceedings can prove fatal to a company’s advertising campaigns. Accordingly, as early as possible in the campaign planning process, advertising creative, sweepstakes contest rules and similar materials should be carefully vetted by an experienced marketing attorney to ensure that the advertising efforts comply with industry best practices and applicable state and federal regulations.

If you are interested in learning more about this topic or ensuring that you are compliant with current advertising regulations, or if you are facing a NAD inquiry, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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