NAD Gives Online Review Promotion a Negative Grade

Advertising Law

Consumer product reviews were the subject of a new decision from the National Advertising Division (NAD) when it challenged reviews that failed to disclose they were the result of advertiser-provided incentives.

Newell Brands, the maker of FoodSave vacuum sealers, contested online reviews for Pyle Audio’s NutriChef vacuum sealer product. According to Newell, Pyle improperly solicited product reviews by offering users free products in exchange for positive reviews and then neglected to disclose that the reviews were incentivized.

When consumers ordered NutriChef vacuum sealers, they also received a solicitation card promoting the review program. In exchange for leaving a review on Amazon, consumers were promised two free 8x10 inch rolls of vacuum sealing bags. The card depicted a graphic of five yellow stars and the words “Love this!” Nowhere on the cards did Pyle inform consumers of their obligation to disclose that they received free products in connection with their review.

Pyle’s review program yielded thousands of positive product reviews on Amazon, providing the company with an unfair advantage, Newell told the NAD, such as higher star ratings, higher placement in search results and the “Amazon Choice” badge.

After the advertiser failed to provide a substantive response to the NAD inquiry and the matter was referred to the Federal Trade Commission, and after the FTC encouraged the advertiser to return to the NAD, Pyle told the NAD that third-party sellers were responsible for the distribution of the solicitation cards promoting the review campaign.

Incentivized reviews may be considered endorsements that require the disclosure of any material connection not reasonably anticipated by the consumer, the NAD emphasized, and consumers may be misled by incentivized reviews when they “appear to be entirely spontaneous posts.” Systemic incentivization of reviews can earn significant additional visibility for a product, and consumers may see a “distorted image of a brand’s reputation and the aggregate level of consumer interest in and satisfaction with the product.”

In the absence of any disclosure of a material connection between Pyle and the consumer posting the review, “consumers reading the reviews are left with the mistaken impression that the reviews have been spontaneously posted on third party retail platforms,” the NAD said.

Therefore, the decision recommended that Pyle take reasonable measures to clearly and conspicuously disclose any material connections between the reviewers and Pyle and whether incentives are offered to product purchasers in exchange for posting reviews.

As for the already-posted reviews, the advertiser should take reasonable measures to remove the posts or make modifications that include the required clear and conspicuous disclosure that the reviewer received something of value from Pyle, the self-regulatory body said.

The NAD also expressed concern that the solicitations reasonably conveyed a message that consumers must post a positive review in order to receive a free product. If Pyle invites future consumers to leave a review in exchange for a reward, it should do so without language that suggests a positive review is necessary, the NAD recommended.

To read the NAD’s press release about the decision, click here.

Why it matters: The use of consumer reviews in advertising, while tempting to advertisers, can prove risky. The NAD decision reminds advertisers that incentivized reviews may be considered endorsements that require the disclosure of any material connection that would not be reasonably anticipated by the consumer.

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