The National Advertising Division (NAD), part of BBB National Programs, held its 2024 Annual Conference in New York City on Sept. 16-17, 2024. It was the organization’s largest to date, drawing nearly 400 attendees. They included legal, marketing and regulatory staff at brands operating in beauty and home care, outside legal counsel experts and academia.

NAD—the advertising’s industry self-regulation organization—uses its annual two-day event to dig deeper into the complex nature of advertising and marketing, review the past 12 months of its case decisions and look at challenges that lie ahead for stakeholders across the sector. Attendees heard from experts who explored key issues and discussed nuances in advertising—from concepts like puffery and claims substantiation to influencer marketing and complex issues such as dark patterns and artificial intelligence (AI).

After opening remarks from BBB National Programs President and CEO Eric D. Reicin and NAD VP Laura Brett, Sean Marshall and Tuere Rodriguez, attorneys with NAD, presented the year in review. Comparing (August 2022-August 2023 to August 2023-2024), cosmetics represented 9% of complaints this year, up from 5% the year prior; household products cases represented 8% (compared to 6%); and dietary supplements jumped to  12% from just 3% the year before.

Among the cases NAD highlighted from its last 12 months were: Reckitt Benckiser’s Finish Powerball Ultimate Dishwasher Tablets; ASO LLC’s hydrocolloid bandages; Unilever’s Degree deodorant; Dr. Squatch’s “no harmful ingredients,” claim; and Dawn Platinum Dishwashing Liquid.

FTC Weighs In

Samuel Levine, director, Bureau of Consumer Protection, Federal Trade Commission (FTC), and Hon. Melissa Holyoak, Commissioner of FTC, made comments during the two-day NAD event.

For example, Levine said robocall complaints to FTC are half of what they were in 2021. He also discussed the Agency’s work in areas such as subscriptions, unfair practices targeting teens, junk fees and fake reviews.

“The tide is turning on state levels in junk fees, Levine said. “Companies should clean up their pricing information right now,” he asserted.

Pointing to the recent ruling on fake reviews, he added, “reviews should come from people who actually use the product or service.”

In a separate speech, Holyoak also presented her views on various aspects of FTC’s authority, touching on important areas such as AI, consumer data privacy and more.

During Q&A, one conference attendee asked Levine about the expected release date for FTC’s updated Green Guides, which are reportedly scheduled to come out this year. Some background: First issued in 1992 and since revised in 1996, 1998, and 2012. In late 2022, FTC opened public comment on potential update to the Guides for the use of environmental claims.

NAD devoted an afternoon session on Day 1 to the Green Guides topic. David R. Merrit, partner, Faegre Drinker Biddle & Reath LLC, served as moderator. Merrit was joined by Sarah Ku, assistant professor of sustainable business management, School of Environmental  Sustainability + Quinland School of Business at Loyola University, Chicago; Patrick Bottini, general counsel, corporate secretary for Link Snacks; Guy Parker, president, International Council for Advertising Self-Regulations (ICAS); and Eric L. Unis, senior attorney, NAD. The panelists discussed the issues around no set guidelines and issues with greenwashing v. greenhushing; i.e., intentionally keeping quiet about sustainability achievements. Speakers shared some general thoughts on how to handle green issues as there still are no set guideposts.

To that end, Ku of Loyola noted much has changed around sustainability, such as proliferation of sustainability officers at companies large and small.

“But it is also slow moving,” she added.

Bottini shared with the audience why he wears two hats at Link Snacks: as legal counsel and sustainability lead, a space not commonly occupied by a lawyer. He said the owners of his global company—who are very dedicated to the outdoors—saw sustainability as risk and a growing litigious atmosphere.

In a nutshell, the panel’s advice was:

• Be specific in advertising claims—tout what you’re doing instead of generally where you’re heading.

• Be realistic in your advertising—identify efforts and limitations.

• Watch for outcomes of the EU and US litigation for more guidance (likely on what to avoid).

• Watch for FTC’s updated Green Guides.

Making Claims

Laura Brett, VP, NAD, and Amy R Mudge, advertising, marketing and digital team lead, BakerHostetler, discussed experts, survey and practice advice for advertisers around consumer perception, product performance claims and “bridging” evidence.  The session included a look at a 2024 NAD decisions involving Biossance and Pamprin Botanicals.

“All data can be used, but is it useful?” asked Robin A. McCue, partner, Kirkland & Ellis LLP during a panel entitled “The Testing Said it, Can We Use it?” The session also featured Sylvia Freels, senior counsel, North America, Mead Johnson Nutrition/Reckitt; Cody Harrison, associate general counsel, Charter Communications; and Melissa Brown, an attorney with NAD. The session, which included discussion of hypothetical scenarios, also touched on the need to navigate the objectives of marketing, R&D and legal when it comes to claims.

“Marketing’s job is to make the strongest claim possible,” noted Freels.

The experts on the panel suggested pulling the different groups together early and throughout the process.

“Data is always helpful; think creatively and work as a team on how data can be presented in a way that is statistically significant and reliable,” McCue added.

Effective or Deceptive

In the “Crossing the Line: Effective of Deceptive Marketing” session, experts looked into so-called dark patterns—practices such as price drip; free trials that become auto enroll; phony endorsement; falsely noting that stock is low or using meaningless deadlines/timers; making it difficult to cancel a subscription

Annie M. Ugurlayan, assistant director, NAD, presented examples, including a Pier 1 candle where a membership fee was added (Case No. 7092).

During the session, hypothetical scenarios were presented, with panel providing their opinions—which helped highlight the fine line between effective and deceptive marketing.

According to Margaret Campbell, professor of marketing, Anderson Presidential Chair in Business Administration, Department Chair & Associate Dean of Faculty, UC Riverside School of Business, certain tactics work well with consumers, such as 5-star reviews.

“Five star reviews are very important for consumers….but they aren’t really paying as much attention to the number of 5 star reviews,” Campbell said.

The panel reviewed a hypothetical website where a brand proclaims “10,000 5-star reviews.” The question was put: but what if that brand has 20,000 2-star reviews as well?

To NAD, deception is the core issue.

“Don’t hide the ball—it undermines consumer trust,” asserted Ugurlayan.

Influencers

Another panel dished similar advice about influencer marketing: disclosures need to be unavoidable and clear and conspicuous.

The panel—which included Kathryn Farrara, general counsel, North America, Unilever US; Nancy J. Felsten, partner, David Wright Tremain LLP; and Jennifer Santos, an attorney with NAD—noted brands can’t rely on a platform’s disclosure tools alone; they need to ensure the disclosures appear everywhere.

“Platform tools and rules require this. The problem is, they are inconsistent and they change,” said Santos.

For example, the panel showed an Instagram post which had the required paid partnership language, but when cross-posted to Facebook, the paid partnership disclosure did not travel to Facebook, although both are owned by Meta. The TikTok creator platform disclosure tool did travel to Facebook. YouTube’s disclosure, while short (it only appeared for 10 seconds during a 20 minute video) followed when it was shared to another social platform.

The panel offered advice on consumer reviews, even when that review might be from a regular consumer who received a sample of a product.

“The best practice in sampling is to remind people to say they got a free sample,” said Ferrara of Unilever.

Jillian Cho, vice president, general counsel at Benefit Cosmetics, hosted a one-on-one discussion with Emese Gormley, a content creator and influencer.

Gormley, who is in her mid 40s , co-hosts the “Lipstick On The Rim” podcast with Molly Sims, winner of the best beauty and fashion podcast at the 2024 iHeartPodcast Awards.

Gormley, who worked in marketing for years earlier in her career, makes her money from affiliate linking.

She told the audience that her space “is the future of advertising.”

AI in Advertising

AI was topic at the NAD Annual Conference—after all, it is on the minds of executives across all industries.

And the minds of lawmakers too.

Speaking at a panel on “Responsible AI: exploring the legal and ethical considerations,” Rashida Richardson, assistant professional of law and political science at Northeastern University, described the growth of recent AI legislation efforts as “exponential.”

There have been nearly 500 bills introduced at the state level, she asserted. Utah’s Artificial Intelligence (AI) Policy Act, enacted in May was the first. Colorado’s Artificial Intelligence Act followed in June. At press time, California’s State Bill 1047 was sitting on Governor Gavin Newsom’s desk. Other bills would create bodies to study AI and AI-generated content.

While the issues are the same, the state approach to AI offers a stark difference from what is happened across the Atlantic.

The European Union (EU) enacted its “AI Act” this year, Parker of ICAS reminded the NAD conference goers.  (For more insight on AI in advertising, listen to this recent episode of NAD’s Ad Watchers podcast.)

NAD Annual Conference 2025

NAD will hold its 2025 Annual Conference in Washington, DC on Sept. 16-17.