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“Up to Claims” Not Up to Par – Kogod Now
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Kogod Now / Fall 2014  / “Up to Claims” Not Up to Par
"Up to" claim signs

“Up to Claims” Not Up to Par

“Clearance: Up to 50 percent off!” “Lose up to 100 pounds!” “Cut energy costs by up to 30 percent!” So-called “up to” claims are ubiquitous in marketing. The industry assumes consumers understand the condition inherent in the claim: Buyers can save up to 30 percent, but that maximum savings is by no means the norm.

Recent research is questioning that assumption and arguing that consumers may find such claims more deceptive than advertisers realize.

“These are claims that are literally truthful but the questions are: Do they mislead consumers? Do consumers take a much broader overall interpretation than is warranted?” Kogod marketing professor Manoj Hastak said. “My recent research for the Federal Trade Commission tends to show that that may be the case. People tend to take these overly broad claims.”

CONSUMER MISUNDERSTANDING

Hastak researched “up to” claims for a report released by the Federal Trade Commission (FTC) in 2012.
He and co-researcher former FTC economist Dennis Murphy took an advertisement for a window company that promised to bring consumers energy savings.

One version of the ad carried an “up to” claim that said Bristol Windows are: “Proven to save up to 47% on your heating and cooling bills!” The second, cleansed version dropped the “up to” language and said “Proven to save 47% on your heating and cooling bills!” The third version had the “up to” claim along with a disclaimer printed directly below the claim to let consumers know “The average Bristol Windows owner saves about 25% on heating and cooling bills.”

Hastak expected more consumers to expect lower savings if they received the “up to” and disclaimer advertisements. He was wrong.

“What we found in this one study is it virtually makes no difference at all,” he said. “The ‘up to’ claim behaved exactly like a claim without the ‘up to’ qualifying language.”

Those who received the “up to” ad were almost just as likely to expect 47 percent savings as those who received the scrubbed ad. The consumers who received the disclaimer ad expected to save about 47 percent too.

Regardless of which ad the respondents received, between 42 and 45 percent of viewers expected at least half of Bristol Windows customers to save about 47 percent.

WHY DID THE DISCLAIMER FAIL?

Hastak had felt confident the disclaimer would help consumers understand they weren’t likely to save 47 percent. Participants had time to read the simple ad, but they still expected the maximum savings.

The research did not focus on why the disclaimer failed, but Hastak and Murphy did ask participants a few questions about whether they saw the disclosure and what it said.

Half of the participants remembered seeing a disclosure and about one-quarter remembered what it said. However, there appeared to be virtually no difference in ad interpretation between consumers who remembered the disclosure and those who did not.

The reason for the apparent lack of effect of the disclaimer is not clear, Hastak said.

Perhaps consumers see the disclaimers as required “legalese,” so to speak. Or perhaps they optimistically expect their results to be better than the norm.

With limited research on the subject, for now, there are just theories, Hastak said.

A NEW NORM

The marketing industry previously policed its own claims, saying that an “up to” claim was fair if 10 percent of consumers achieved the maximum benefit promised.

In light of Hastak and Murphy’s research, the FTC seems to be altering its recommendation.

Now half of all consumers should be able to receive the maximum benefit for a claim to be fair and not misleading, according to the American Bar Association.

“The FTC believes the report will help guide advertisers to avoid the use of misleading ‘up to’ claims,” the commission wrote in 2012. “It reinforces the FTC’s view that advertisers using these claims should be able to substantiate that consumers are likely to achieve the maximum results promised under normal circumstances.”

“I think it has created turmoil within the industry,” Hastak said. “There are sort of nuance issues as you dig deeper. Are all ‘up to’ claims the same?”

What about Internet companies that promise download speeds up to a certain rate? Those claims have been criticized as being inaccurate, Hastak said, but each consumer’s speed depends on other factors as well, such as location, usage and more.

“So the question for the industry becomes: How do we make any claims when the reality is that consumer experience will vary?” Hastak said. “Marketers are worried whether they can make ‘up to’ claims at all and what they need to do to protect themselves from potential FTC scrutiny.”

Additional research would help the FTC better understand the issue, Hastak said.

“There really hasn’t been more work done on this particular issue,” he said, “so it’s kind of [in] a holding pattern, in my opinion.” KN mark


“Are Tensile Claims in Advertising Deceptive? An Empirical Investigation of Energy Savings Claims,” was presented by Manoj Hastak and Dennis Murphy at the International Conference on Research in Advertising in 2013.

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