False Advertising-Lanham Act Claims
False advertising (Lanham Act) claims are on the rise as economic factors squeeze advertising budgets, and advertising content itself becomes more aggressive. Companies are scrupulously monitoring their competitors’ ads for falsehoods or exaggerated claims, while consumers are quick to target misleading ads with class action lawsuits.
With the advent of online advertising, and the massive number of viewer impressions these ads can generate, the analysis of false advertising claims has become even more complex.
Proving causation
To prove causation, one would first have to establish that sales growth by the defendants can be attributed to advertising, and then determine how many purchasing decisions resulted from the false component of the advertising.
Survey and market research can be used to evaluate the relationship between consumer purchasing decisions and particular product claims.
Every factor contributing to demand must be identified and analyzed individually. Unless this analysis is rigorous and fact-based, and lost sales can be attributed entirely to false or deceptive advertisements, the methodological approach can be refuted in rebuttal.
Examination of complex demand models
Analysis Group examines the myriad factors that can drive sales, including product availability and placement, pricing variations, competitors’ products, and coupons and other promotions. Even in the absence of sales data, we can draw on our extensive econometric and statistical expertise to model demand for virtually any product. We are also experienced in the design and use of market research methodologies where data are not available. And we are particularly adept at analyzing massive databases of advertising and customer information, which are often typical of aspects of these cases.
Both plaintiff and defendant parties can benefit from the sophisticated demand modeling we can provide. In Colgate v. Procter & Gamble Company, for example, our team worked on behalf of the defendant to demonstrate that Colgate’s models for teeth-whitening products contained serious flaws, rendering its damages estimates unreliable. In another case, involving a cleaning product that emerged as the market leader within two years of its introduction, our team worked on behalf of the defendant to disentangle the effect of the claims-at-issue from other product and promotional features responsible for sales.
[top]
Network of distinguished experts
We often partner with marketing science experts to develop surveys that capture the impact of false or deceptive ads on consumer perceptions and behavior. We then compare the behavior of those exposed to the content in question to the behavior of an impartial control group.
Consumer perception surveys also can play an important role in establishing whether the advertisement or component appears to be false or misleading to a group of respondents. We can directly measure a consumer’s interpretation of the advertisement to compare it to the deceptive claims. We frequently review market research created in the normal course of business and evaluate whether advertising claims can be supported by the research.
We also can identify and team with experts in other areas, such as market elasticity, demand modeling, and consumer purchasing behavior. These experts can help to measure the effect of the claims at issue on sales for both the plaintiff and the defendant or to measure restitution in consumer class actions.
[top]