The Federal Trade Commission decision to order Novartis Consumer Health to run $8 million in corrective ads for Doan's Pills sets up a court test that could have lasting repercussions for marketers.
Novartis said it will appeal the decision, and lawyers and ad groups said the case will force the courts to determine how much evidence the FTC needs before it takes such action.
"The question is how much they are going to have to prove," said attorney Barry Cutler, a former director of the FTC consumer protection bureau. "Do they have to prove that advertising created a lingering misapprehension, or is there a presumption that years of advertising would have created the misapprehension? The issue is where the FTC burden will be placed."
Bill MacLeod, another former FTC director of consumer protection, said the stakes are high. A win would give the agency greater freedom to order corrective ads, but a loss could tie its hands.
"The court could raise the standard so high as to make it impossible to get corrective advertising," he said.
The Doan's decision is the first time in 25 years the FTC has unilaterally ordered corrective advertising, though marketers have occasionally been asked to voluntarily do so. The commission's unanimous vote upheld a hearing examiner's determination that Doan's ads from 1987 to 1996 falsely presented the brand as better for back pain than other remedies. The ads were created by the agency now known as Jordan McGrath Case & Partners/Euro RSCG, New York.
But FTC overturned the examiner's decision not to order corrective advertising; one commissioner, Orson Swindle, dissented from that vote.
Novartis was ordered to run ads noting that, "Although Doan's is an effective pain reliever, there is no evidence that is more effective than other pain relievers for back pain." Those words also must appear on packaging for one year. The $8 million figure matches the brand's annual ad spending.
Ad groups are worried about Commissioner Sheila Anthony's contention in the ruling that "corrective advertising is not a drastic remedy." They fear it could indicate the FTC will be more willing to apply the punishment in future cases.
'AN APPROPRIATE METHOD'
"Requiring the dissemination of a truthful message to counteract beliefs created or reinforced by a respondent's deceptive message is an appropriate method for restoring the status quo," Ms. Anthony wrote.
"If [Novartis] were to run that mea culpa, it could have a drastic corrosive effect on the credibility of a brand around 90 years," countered Hal Shoup, exec VP of the American Association of Advertising Agencies.
"This is government-ordered compelled speech in the absence of proof that a lingering false impression was created," Mr. Shoup said.
He predicted the courts will overturn the decision.
Copyright May 1999, Crain Communications Inc.