• by Tanya Gazdik , May 26, 2009

Advertisers seem to be on a litigious streak, with the latest example a lawsuit by the maker of Ball Park hot dogs against Kraft Foods Inc.'s Oscar Mayer brand.

Sara Lee Corp. is accusing Kraft of false advertising because of an ad that claims Oscar Mayer Jumbo Beef Franks had beaten Ball Park hot dogs in a taste test, when in fact, it only beat out the leading Ball Park product. The lawsuit, which comes just as the outdoor grilling season gets started, also attacks Oscar Mayer's 100% beef claims.

"This is a weak attempt by Oscar Mayer to mislead millions of consumers with false and inaccurate claims. Simply put, we believe that these untrue statements are all a bunch of bologna," said Chuck Hemmingway, Ball Park's brand director, in a statement. Sara Lee wants the ads pulled.

Other recent examples of advertisers coming to blows:

• Charter filed a lawsuit against DirecTV claiming the satellite company has been using false advertising in a national campaign that started around the time Charter declared bankruptcy in late March.

• Procter & Gamble's Bounty claims Georgia-Pacific's Brawny LLC is infringing on its trademark with new paper towel designs which they say copies their pattern.

• Cadbury challenged Wrigley's ads for Eclipse gum, including one that says Eclipse kills bad breath germs, while "most other gums just mask bad breath."

• Whirlpool challenged an Electrolux claim that its cooking range "boils water in 90 seconds."

• General Mills' Progresso soups challenged Campbell's Select Harvest ad claims including "taste better and more natural than Progresso soups."

"Advertising claims become more aggressive as companies seek to prevent an erosion in market share, and in this economy, companies have no tolerance for claims viewed as denigrating," Andrea Levine, Director, National Advertising Division of the Council of Better Business Bureaus, told Marketing Daily. "Meanwhile, court resolutions are extraordinarily expensive at a time when companies are not willing to gamble on an uncertain outcome. As a result, NAD has become the preferred venue for the resolution of advertising dispute, including very serious disputes."

Three of the above disputes -- Cadbury, Whirlpool and General Mills -- are currently being handled by the NAD, an investigative unit of the advertising industry's system of self-regulation. Companies, consumers and Better Business Bureaus can file challenges against advertising that they believe is misleading or not truthful.

Because advertisers are required by law to possess substantiation for the advertising they publish, NAD's first step following a challenge is to request that substantiating evidence. In cases where one company has challenged the advertising of another company, NAD usually receives scientific evidence from both parties. NAD reviews that evidence to determine whether it is sufficient to support the advertising claim at issue.

Once the evidence has been thoroughly reviewed, NAD writes a decision setting out the nature of evidence, an analysis of the evidence and its recommendations. NAD works on a 90-day timetable.

NAD is generally faster and cheaper than litigation, and it is a voluntary process. However, advertisers who don't comply with an NAD decision, or who refuse to participate, may be referred to the appropriate federal agency (often, the Federal Trade Commission) for further review.

"Companies are approaching advertising disputes with a heightened sense of urgency; to expedite NAD decisions, for example, a number of challengers have waived certain evidentiary submissions," Levine said. We also are seeing advertisers highlight certain product characteristics -- MSG in soup, for example -- that hadn't previously been a source of contention."

In addition to litigation or threats of suits, there's also no shortage or regulation pressure being put on advertisers. One proposed restriction that has generated a lot of publicity is the "Families for ED Advertising Decency Act" legislation, which would ban the airing of all ads for medications to combat erectile dysfunction (ED) between the hours of 6 a.m. and 10 p.m.

"This proposal is misguided, counterproductive and if enacted, unconstitutional," wrote Dan Jaffe, EVP, government relations for the Association of National Advertisers, in a blog post on the subject. "The government simply cannot force companies to serve as a megaphone for their messages and then punish them for it by drastically restricting their speech. The U.S. Supreme Court has made crystal clear that even where the subject of ads could be claimed to be 'embarrassing' or 'offensive' to some segment of the audience that fact does not authorize government bans or restrictions."

Meanwhile, the Federal Drug Administration recently sent out a warning letter to General Mills saying that with the way they are advertising it, Cheerios might as well be a drug. That's because Cheerios boxes are labeled with claims that it can lower cholesterol.

"Based on claims made on your product's label we have determined that your Cheerios... is promoted for conditions that cause it to be a drug," the FDA wrote, "because the product is intended for use in the prevention, mitigation and treatment of disease."

The company is defending Cheerios' cholesterol-lowering abilities, saying a "scientific body of evidence" supports its heart-healthy claim. The "clinical study supporting" that claim is "very strong," the company said in a statement.

"Clearly, the legislative and regulatory world in Washington has heated up for advertisers," Jaffe told Marketing Daily. "There is a whole new range of activist committee and subcommittee chairman and new heads of the regulatory groups overseeing advertising. In addition, with the economy hurting, the legislators and regulators sense a mandate to make sure that business is carefully toeing the line in regard to the protections to consumers."