US ads go after the competition

 
Ronald McDonald eats Taco Bell Clearly, this is not the Ronald McDonald children are accustomed to seeing hawking hamburgers

American advert makers are unafraid to name brands' competitors directly. The BBC looks at the established but unspoken rules governing the trade.

Ronald McDonald is a huge fan of Taco Bell.

But this Ronald McDonald does not wear giant red shoes or a classic red hairstyle. Instead, he's a 30-something businessman in a polo shirt. He's a justice of the peace. He's a personal trainer. And he's also a funeral director.

To launch Taco Bell's new breakfast menu, a menu poised to compete directly with the morning offerings at fast food giant McDonald's, the chain hired about two dozen men named Ronald McDonald to eat waffle tacos and sing their praises.

Those travelling to the US might be alarmed to see advertisements like these. Naming another brand might come across as an overly aggressive way to market a product.

Start Quote

Comparative advertising encourages product improvement and innovation, and can lead to lower prices in the marketplace”

End Quote US Federal Trade Commission

But it's a tradition in the American ad business and has been an accepted practice in the US since 1946, when Congress enacted a law that enabled brands to compare their products starkly with their competitors'.

Known as the Lanham Act, the landmark copyright bill cracked down on false advertising while remaining noticeably silent on comparing brands and naming competitors.

Over the years, the government went from tacitly endorsing to directly encouraging these methods. After noticing a dearth of comparative adverts, the Federal Trade Commission (FTC) issued a statement in 1979 that essentially endorsed the practice, so long as the adverts were "truthful and non-deceptive".

"Comparative advertising encourages product improvement and innovation, and can lead to lower prices in the marketplace," the statement read.

Ross Petty, a professor of marketing law at Babson College, says the FTC endorsed comparative advertising because it preferred brands to compete with one other than with an unnamed competitor.

"They prefer the specific to the vague," he says.

By the 1990s, the message had taken hold: According to a Northwestern University study, at the time about 80% of all US television adverts and 30-40% of all adverts contained comparative claims.

These commercials ranged from direct comparisons and quality tests to parody adverts that cleverly avoided naming a rival brand directly. Ford's parody of a Cadillac advert praising consumerism is a current example,

The risk to the strategy: brands might boost their rival's name recognition.

Pepsi Challenge The Pepsi Challenge had celebrities and average people do blind taste tests of both Coke and Pepsi

"There's a really fine line between it being useful and powerful and risking looking bad and giving [competitors] name recognition," says Michael K Redman, CEO and co-founder of Half a Bubble Out, a marketing and advertising agency.

That's one reason why competitive advertising usually aims up. Second-place brand Pepsi will target industry leader Coca-Cola, as it did in the famous Pepsi challenge ads. Bing will target Google and Taco Bell will go after McDonald's, but not the other way around.

Another risk, says Redman, is that the more popular brands can come across looking like bullies.

And companies of any size risk legal trouble for adverts considered mean or unfair.

Dove was asked to discontinue its campaign comparing competitors to barbed wire and claiming rival Dial soap strips away the skin's top layer.

A panel of the National Advertising Review Board found that Dove's adverts, which implied that Dial soaps were harsh and actually damaged the skin, was an unfair claim. The board also found that the test paper used in the commercial did not accurately simulate real skin.

In Europe, comparative advertising is also legal although much more tightly regulated, says Petty of Babson College. Under the European Union's rules on consumer and marketing law, companies are barred from comparing apples to oranges, he said, such as in an advert contrasting a luxury car to another company's base model.

While on paper the US requires products to be comparable, Petty said European regulators are more consistent in enforcing the rule.

Redman describes the European advertising scene as more conservative in some areas but less so in others, although companies are increasingly likely to name their competitors.

"You can talk about sex, but you can't talk about someone doing poorly," he says.

 

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