NAD Streamlines Process for Deciding Ad Disputes

Moves Aim to Keep Competitive Challenges Out of Court

By Published on .

The National Advertising Division of the Council of Better Business Bureaus is streamlining how it handles advertising disputes, a move expected to cut the average time for a decision on such disputes from 110 to 70 or 80 days.

Organizations represented on board of Advertising Self-Regulatory Council
Organizations represented on board of Advertising Self-Regulatory Council

The changes cover the NAD and related advertising self-regulatory bodies -- the Children's Advertising Review Unit and National Advertising Review Board. They're the result of input received in a working group since April from 59 attorneys that practice before the NAD, aiming at preventing advertisers from taking their claims to court rather than to the self-regulatory body, which is backed by industry associations that include that Association of National Advertisers, 4A's and American Advertising Federation.

The changes, which take effect Nov. 1, include setting an upfront briefing schedule to expedite filings, limiting briefs to 20 pages of double-spaced 12-point type (plus exhibits), and tightening the time frame for the NAD to issue decisions.

Another effort to improve fairness of the proceedings shifts the role of the NAD to being an adviser rather than a participant during appeals to the NARB, and allowing advertisers to make somewhat longer public responses to NAD decisions.

The moves come a year after each of the three biggest global packaged-goods marketers -- Nestle, Procter & Gamble Co. and Unilever -- sued smaller competitors in court over false-advertising claims rather than taking their challenges to the NAD. It was the first time any of the three had taken such cases to court rather than the NAD since 2009, though they'd gone before the NAD 17 times collectively on other issues in that period.

It's not clear these changes would have prevented those lawsuits, but the idea was to make the industry self-regulatory option a more appealing option, said C. Lee Peeler, CEO of the Advertising Self-Regulatory Council.

"There's a distinct tradeoff in self-regulation between speed and fairness and completeness, which we think we have done pretty well," he said. "The faster the process goes, the more people will participate. But it's got to be fast and fair."

The NAD's ultimate goal is to decide on challenges within 60 days, and these changes should get close, Mr. Peeler said.

He said the NAD also has "recently been brought up to full staffing, and we'll be looking to ways to increase the resources available for self-regulation."

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