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Definition: National Advertising Division (NAD)
The National Advertising Division (NAD) of the Council of Better Business Bureaus (CBBB) is the investigative arm of the National Advertising Review Council (NARC). The NARC is an independent self-regulatory body which was established in 1971 as a forum for regulating the advertisements. The NARC has established guidelines and standards of truth and accuracy for advertisers, and defines policy and procedures for the NAD. To ensure the reliability and fairness in the system, the review process functions under the administrative control of the CBBB.
The NAD is responsible for monitoring and evaluating truth and accuracy of advertisements. The NAD scrutinizes and assesses a wide range of advertising claims, including exaggerated claims, consumer surveys, pricing claims and disclosures. NAD
1. Independently monitors and reviews national advertisements directed toward consumers aged 12 and older.
2. Investigates consumer complaints about misleading advertising claims.
3. Provides a forum for competitors to resolve disputes regarding advertising claims.
The NAD will review advertisements involving product performance claims, supremacy claims over competitor’s products, scientific and technical claims. In case of Challenges raised against those claims, the advertiser’s response is sought for proofs to substantiate the advertised claims. NAD presents its “final case decision” within 15 days of filing of the last document from the parties. NAD may find the evidence provided by the advertiser fully substantiating the claim or wholly insufficient to support the claim. In the latter case NAD will recommend the advertisers to discontinue the claim.
If the advertiser fails to comply with the recommendations, NAD refers the case further to the concerned regulatory agency. If the advertiser or challenger disagrees with NAD recommendation, they may re-appeal the verdict to the NARB (National advertising review board) for additional review.
Benefits of NAD process
• Cheaper, faster and easier alternative to sue a competitor for deceptive advertising
• Provides equal opportunities for the advertisers to challenge or defend the claim
• Less or no involvement of the government
• Increased consumer confidence in advertisers
• Consumer complaints reduces gradually
Examples of NAD cases:
2009 Dell challenged Apple ‘Green’ MacBook Ads as Misleading
2011 Gillete fusion Proglide razors performance claim was challenged by Energizer personal care