Overview:
Snoop Dogg, Patrick Mahomes, and baby lions, oh my! NAD and NARB released a new decision saying that T-Mobile must modify certain comparative claims. How might consumer surveys have prevented this from getting “played out” in the NAD and NARB?
T-Mobile and the “Other Big Guys”
T-Mobile estimates that it has 40% of the United States market for mobile phone service. The major mobile phone service providers in the United States are AT&T, T-Mobile, and Verizon, who together take 94% of the market. Charter Communications owns and operates Spectrum Mobile, which shares markets with many of the “big guys,” but has substantially less market share than them.
T-Mobile created an advertising campaign called the “Top Three Plays of the Day” that featured rapper Snoop Dog, YouTube comic influencer Kai Cenat, and NFL player Patrick Mahomes. In this commercial, which also includes chasing an ice cream truck, dancing, and holding a baby lion, T-Mobile advertises that “families can save 20% vs. the other big guys” by switching to T-Mobile wireless service. Charter Communications, owner of Spectrum Mobile Phone service, called a foul on the play.
NAD and NARB Decide Who Is Big
Charter brought a challenge before the National Advertising Division of the Better Business Bureau, asserting that it should be considered “big guys” in mobile phone service nationally, and that T-Mobile’s savings claims were not accurate as to Spectrum. T-Mobile argued that it wasn’t referring to Spectrum, in part because Spectrum has only 3.6% of the U.S. market and is available in only certain regions. It also argued that Spectrum offered service costs were lower than T-Mobile only because of a promotion.
The NAD determined that Spectrum customers may reasonably interpret the T-Mobile ad to include Spectrum as a “big guy,” if they live in one of the markets where Spectrum is offered. It recommended that T-Mobile modify its claims to specify which competitors are being compared. Further, the NAD found that any savings that Spectrum customers might enjoy from switching to T-Mobile would not be achieved in the first year, because of a promotional offer that expires after a year.
T-Mobile made another play, appealing to the National Advertising Review Board (NARB). On the issue of who are the “big guys,” NARB disagreed with the NAD. NARB concluded that the “big guys” are Verizon, AT&T, and T-Mobile, based on their 94% market share, and that consumers would not consider Spectrum Mobile in that category. It also approved the claim that consumers can, but not necessarily will, save 20% by switching from Spectrum to T-Mobile. They noted that a “savings calculator” on T-Mobile’s website helps consumers calculate actual savings.
Advertising Claim Substantiation Helps Advertisers Calculate Choices
It’s expensive to run major advertising campaigns that include celebrities, influencers, and professional sports players. Ensuring that your comparative and express advertising claims are substantiated is a form of insurance that you will be protected in the face of any regulatory challenge or legal action. Even a Fast Track SWIFT challenge at the NAD can slow down projected earnings. Contact MMR Strategy Group today if you are looking for reliable claim substantiation research that withstands the biggest plays by competitors.