NAD Reviews Advertising By Charter Following DirecTV Challenge; Notes that Humor Doesn’t Diminish Obligation to Support Claims

New York, NY – Dec. 12, 2017 – The National Advertising Division has recommended that Charter Communications Inc., discontinue broadcast advertising that conveyed an unsubstantiated message about the impact on customer service of the merger of AT&T and DirecTV.

NAD determined, however, that the advertiser could support claims that reference the challenger’s promotional pricing.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

The claims at issue in this case were included in a series of commercials, some of which aired on the Internet, and challenged by DirecTV.

NAD noted in its decision that the “television service industry is highly competitive and providers regularly advertise their various services and promotions aggressively, often with advertisements featuring sharp humor aimed at other companies. Accordingly, it is no surprise that NAD has reviewed many claims in this area that satirize and even mock competing television services.”

In this case, the challenged claims are served up in a humorous or outlandish fashion, featuring comedian Kevin Nealon as the captain of a “Satellite TV Headquarters” space station designed to look oddly out of date.

NAD has long recognized an advertiser’s right to make literally truthful and accurate advertising claims, sometimes at the expense of its competitors. NAD also has recognized “that humor can be an effective and creative way for advertisers to highlight the differences between their products and their competitors’. However, humor and hyperbole do not relieve an advertiser of its obligation to support messages that their advertisements might reasonably convey – especially when the advertising disparages a competitor’s product.”

Here, the challenged “Lever” advertisements depicted satellite television consumers as frustrated with the number and type of channels featured in their particular service package and included the unsupported claim that DirecTV customers “pay more for what [they] love to watch.” NAD recommended that the commercials be discontinued.

The “On Hold” commercial included the claims that a DirecTV customer’s “bill has doubled” because her prior bill had been “just a promotional price.”  NAD found the claim supported by the evidence in the record.

Following its review of the “Triple Play” commercial, NAD noted that there is a clear difference in the structure of parties’ promotional deals, and said that the advertiser is entitled to point out differences, promote its own deal or package and criticize its’ competitor’s offerings so long as the advertising does not convey an unsubstantiated or falsely denigrating message. NAD found that consumers would understand the claim that, “Satellite and telephone companies complicate deals with contracts” to mean that the challenger’s promotional “deal” involves a “contractual” obligation on the part of the customer but not the type of “deal” offered by the advertiser. NAD determined that the claim was supported.

Finally, NAD determined that the depiction of the challenger’s customer service in the “On Hold” commercial amounted to puffery and did not require substantiation. In contrast, NAD determined that the depicted conversation in the “Transfer” commercial conveys the substantive message that DirecTV’s merger with AT&T has had a deleterious effect on the company’s ability to provide customer service. Because such a claim was not supported, NAD recommended that the advertisement be discontinued.

Charter, in its advertiser’s statement, said the company accepts NAD’s recommendation.

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.