Monday, February 11, 2013

If you like the FTC's substantiation rule, you'll love NAD's?

I don’t often blog NAD decisions, but this is a rare false advertising claim about the “If you like X, you’ll love Y” ad form, and thus of great interest to me insofar as American law has allocated such claims to the domain of false advertising, not to trademark law.

Kraft Foods, Inc. (Gevalia Kaffe for Tassimo), NAD Case #5542 (01/03/13)
Starbucks and Kraft, which makes single-cup coffee pods for Tassimo brewers, ended an earlier agreement for Kraft to sell Starbucks pods.  Kraft then introduced Gevalia brand pods with ad claims in the form: “NEW!” If you like STARBUCKS® [Breakfast Blend/Caffe Verona/House Blend] try this!*”  The asterisk went to a small disclaimer of affiliation. 

Starbucks argued that this falsely implied that the varieties tasted the same or similar to the coordinate Starbucks blend.
Starbucks' case: it submitted an internet survey using an image of the Dark House Blend.  Respondents were asked to look at it carefully “as if you are shopping in a store,” then asked what brand of coffee was in the package; 74% identified Gevalia and went on to the remaining questions, which continued with open-ended questions about the main idea of the package.  They were then asked whether the package referred to any other brand and given six choices, including Starbucks, as well as write-in and “unsure” options.  Those who identified Starbucks (62% of the original 253) were asked “Do you recall whether or not the package said: ‘If you like Starbucks House Blend try this!’”  Those who said no or didn’t remember were filtered out, leaving 53%.  These were asked “which of these ideas, if any does that [statement] communicate to you?”  The options were (1) the taste is similar; (2) Gevalia is less expensive than Starbucks; (3) “Neither of the ideas is being communicated. It is only suggesting that people try Gevalia Dark House Blend”; and (4) don’t know/no opinion.

In response to this closed-ended question, almost all of the remaining participants, or 48% total, took away a taste similarity message, while only 4% received a cost message and 1% didn’t know or had no opinion.  Also, the results on the open-ended questions corroborated the closed-ended results: 83% of those who remembered the “if you like” claim volunteered a taste similarity answer in response to the open-ended questions.  Starbucks further argued that, because the ad said nothing about cost, the answer that Gevalia was less expensive operated as an “internal control” for noise: asking a reasonable question that isn’t answered in the ad can control for respondents’ mention of ideas that don’t really appear in the ad based on preexisting beliefs.  No alternate control ad was possible, because that would require removing the comparative element.

Starbucks and Kraft fought over coding, but Starbucks argued that responses about preference that didn’t specifically mention “taste” or “flavor” should be coded as favoring Starbucks because consumers select blends based on taste.  In addition, even only looking at specific references to taste flavor, 28% of respondents volunteered that type of response to the open-ended questions.

Starbucks’ next hurdle: was the claim of taste similarity false or unsubstantiated?  NAD requires advertisers to substantiate reasonable interpretations of their claims.  To disprove the claim, Starbucks conducted taste tests of the three pairs, with a total of 150 participants tasting each pair in five major cities.  Participants were asked to prepare the coffee “as you normally do when drinking coffee,” taking care to “prepare both coffees exactly the same way,” and shown their answer choices so they’d know their objective.  (This is going to distort results of taste tests—verbal overshadowing and all that.)  They were asked to eat some cracker and sip some water before each taste, and offered the opportunity to taste the coffees a second time.  Then they were asked to choose from the options “The coffees taste very different from each other,” “The coffees taste somewhat different from each other,” and “The coffees taste similar to each other.”  In each case, from 64-74% of participants chose “very different” or “somewhat different.” 

Kraft argued that the “if you like Starbucks, try Gevalia” claim communicated only that Gevalia was a new alternative worthy of being tried.  “Try this!” simply encouraged action, rather than making a factual claim.  While Starbucks claimed that consumers would only try another coffee because of similar taste, Kraft rejoined that consumers could just as easily act out of curiosity or the desire for a different taste within the same general range (e.g., dark roast).  Indeed, NAD and the courts have not found vague or ambiguous terms such as “like” or “try” to be falsifiable.

Kraft also had a number of objections to the survey.  As for the closed-ended questions, Kraft argued that the survey steered respondents by underlining the words “is less expensive to buy” and “is similar to,” cuing them to those two answers as the ones that were more likely to be “right.”  And because the “less expensive” message was so implausible as a takeaway from the ad, participants were actually steered to the “similar” response.  In an online survey, where participants’ attention can’t be controlled, this was especially problematic.  Here, moreover, the survey underlined “is similar to” but not “taste,” and so rushed participants might easily overlook “taste” and focus on general similarity, such as similarity in blend.  (The initial survey description sounded good, but the underlining does seem problematic to me for precisely these reasons.) 

Kraft had other objections, including that the final option (“Neither of the above ideas is being communicated. It is only suggesting that people try Gevalia Dark House Blend”) was two separate and unrelated answer choices combined into a single convoluted option, and didn’t fairly present Kraft’s intended message—try Gevalia—as a choice.  It also disputed the coding of some responses, such as responses simply using the words “comparable,” “similar,” “just as good,” etc., as taste similarity claims.  Moreover, taste similarity could just mean that they fit into the same general categories such as bold, dark roasts; the survey wasn’t able to distinguish between “trivial” similarity and “tastes just like” similarity.

Kraft also criticized the taste test, arguing that the surveyor represented, either expressly or by implication, that the coffees were different.  Kraft argued that many respondents see tests of this kind as tests of their ability to make distinctions.  (FWIW, this is my understanding of the research as well.)  There is a standard control for this, which Starbucks didn’t use: give a control group the exact same coffee twice and ask them the same questions.

NAD found in favor of Starbucks.  An advertiser is responsible for supporting all reasonable interpretations of its advertising claims, and NAD agreed that a reasonable implication of “if you like X blend, try Y!” for coffee is that Y tastes the same as or similar to X.  The online survey was generally reasonable, though NAD was troubled by the closed-ended question and questioned whether the “less expensive” choice was a suitable internal control. NAD also didn’t like the failure to fully rotate the options (so that only the first two rotated), and agreed with Kraft’s criticism that the third option, containing Kraft’s intended message, wasn’t well phrased.  Further, the underlining was problematic.  So NAD didn’t rely on the answers to that question.

However, NAD was more inclined toward Starbucks’ position on the open-ended questions.  By NAD’s count, 66 out of 253 respondents, or 26%, referred to either the taste or flavor of the two products being similar or the same. Combined with NAD’s independent evaluation of the claim, this was enough to determine that the language communicated more than a mere invitation to try Gevalia.  It would be reasonable for a consumer to take away a “similar taste” message given the hedonic appeal of “like.”  However, NAD cautioned that a mere mention of a competitor wouldn’t in and of itself convey a comparative taste message.

There was no record evidence about whether consumers preferred one coffee over the other.  NAD noted Kraft’s criticisms of the taste tests, but Kraft itself provided no evidence substantiating the claim.  Because the burden of substantiation is on the advertiser, NAD recommended that the claim be modified or discontinued.  Kraft, of course, respectfully disagreed with NAD’s conclusion, but for “various business reasons” is changing the claim anyway.


Anonymous said...

Good article. However, please identify NAD instead of forcing people to use the Wikipedia to figure out that it stands for the National Advertising Division of the B.B.B. (at least I think it does).

Patricia said...

I completely agree with the previous comment. As a lawyer reading this post for substantive information, it was really annoying not having NAD defined.