• by Karl Greenberg , March 10, 2009

Speaking at the Association of National Advertisers' Conference on Law and Business Monday, Deborah Platt Majoras, VP and general counsel for Procter & Gamble, set the tone for a presentation that would follow when she noted that the market has seen an increase in the filing of class-action suits that have nothing to do with suffering or illness.

"There are more no-injury class actions ... more money-damage class actions," she said. Although she was speaking of the likelihood that the Federal Trade Commission (FTC) will take an aggressive approach to enforcement, the point is just as relevant to the issue of truth in advertising, and the fine line between false facts and puffery.

Richard Leighton, partner with Washington, D.C.-based firm Keller & Heckman, LLP, explained that, in essence, puffery means "never having to say you're sorry" for untruths, or exaggerated claims. The firm represents McDonald's, which has had first-hand experience on the issue of whether to gird for legal battle versus a competitor who may leave court with a decision in its favor--with McDonald's walking out, having been roughed up for a fee.

Cate McGinn, managing counsel of global nutrition at McDonald's, said the Oak Brook, Ill.-based company must choose constantly. "Our first step, when we see these kinds of ads, is to determine whether to pay attention to it," she said. "When you look at whether it's puffery, is it worth it to call attention to? Is the cost worth it, or do we ignore it and stick to marketing?"

Leighton said the issue is critical because comparative claims on price and value have increased as marketers have become more brazen in calling out competitors in ads. Also increasing, says Leighton, are legal challenges and consequently, the puffery defense.

McDonald's was challenged by Subway in an ad that demonstrated, graphically, that a Big Mac has more fat than a Subway sandwich. While McDonald's declined to pursue, a consumer group took up the case. The National Legal and Policy Center asked the FTC to order Subway to stop its ads, which compared eating a foot-long Subway Club to eating a McDonald's Big Mac. The group said the ads claim "less fat," and they didn't disclose that the sub has "more sodium, carbohydrates, calories and sugar than the Big Mac." Subway discontinued the ad and told the FTC future ads would "include more prominent disclosures."

Leighton says puffery can be obviously false or obviously not demonstrable, but it's a claim that no reasonable audience would believe. "If it is not material to a consumer, it will be puffery, you can defend it as puffery. What is material: a claim that likely motivates an intended audience to purchase the product, not purchase a competing item, or recommend the item to a patient or to a customer."

Among the examples was a print ad for White Castle hamburgers that he said centered on a claim that would qualify as puffery. In the ad, a giant foam "number one" hand at a sporting event holds a burger, and the headline reads "Number One Party Pleaser!"

Leighton also displayed an ad by regional pasta company Mueller's in which the company claimed it was "America's favorite pasta," which might be difficult for a brand that did not sell east of the Mississippi. Amazingly, the court ruled in Mueller's favor--that the message was puff--in a case brought by a competitor. Leighton said the judge hauled out a 1940's-era dictionary and found under the definition of "favorite" an amorphous definition.

He said that because of the potential for just such outcomes after a long, costly legal route to gagging a competitor's false claims, the better approach is through parallel relationships between c-suite executives and marketers and their peers at the competing company.

His advice: "The most effective way to get rid of an objectionable ad is if you have built up, over the years, a good business relationship with a peer at the competitive company," he said. "Chief executive to chief executive, marketing manager to marketing manager. If you know [your opposite] when something comes up, you can handle it informally because at each stage of formality, it becomes more difficult."