Wednesday, August 17, 2011

What Marketers Can Learn From the Great Wiener War

In a legal skirmish befitting the dog days of summer, Sara Lee Corp. and Kraft Foods are battling in a Chicago federal court over alleged false advertising claims each says the other made during their heated hot-dog brand battle in 2009.

The Great Weiner War is generating plenty of headlines -- and a bunful of puns -- reaffirming America's fascination with encased meat. But what lessons, if any, does this latest ad claim battle hold for marketers? And what precedents might be set by the trial, which is not expected to wrap up for a couple weeks? Ad Age sought answers from legal experts:

First some basics, like what's the beef?
Sara Lee filed suit against Kraft in early 2009, taking issue with Oscar Mayer brand ads promoting the hot dogs as "100% pure beef." Sara Lee says this is not true because the dogs contain "chemical and other non-beef contents." Oscar Mayer also ran ads promoting its dogs as being the best according to a national taste test. But Sara Lee says the test was flawed because the ad copy insinuated Oscar Mayer beat Sara Lee's entire Ball Park hot-dog line, when only a couple different competing hot-dog varieties were tested.

What does Kraft say?
The company says that "pure beef" is commonly accepted to mean the dogs don't contain other meats, such as turkey or poultry, and that the designation does not prohibit the use of other ingredients such as curing agents. So Kraft filed a counter suit, taking issue with Sara Lee proclaiming Ball Park dogs as "America's Best Beef Franks" based on an award from Chefs Best, an independent food-judging organization. Kraft says Sara Lee falsely claimed that the entire Ball Park line won the awards, when only three specific products did.

Are any of those ads still running?
The wiener war has pretty much subsided as both companies are running more positive messages touting all-natural dogs.

Then what's the point of going to court?
"There may be some plan or intention to re-institute the advertising at a future date," said David Balser, a lawyer with McKenna Long & Aldridge, who works on ad cases. Also "both sides might legitimately feel that the other competitor crossed the line and want to draw a line in the sand to let the other competitor know that they intend to require veracity in the advertisements." The companies also want monetary damages. And it should be noted that the food giants are still battling for wiener superiority, with Ball Park holding the top spot with almost 20% market share and $343.2 million in sales and Oscar Mayer second with nearly 17% share and $284.3 million in sales in the year ending April 17, according to SymphonyIRI, which does not measure Walmart.

Doesn't the ad industry self-regulate these kinds of claims?

Yes, the Better Business Bureau's National Advertising Division rules on roughly 200 disputes each year, and division director Andrea Levine said "if they had brought that case here, it would have been decided like two and a half years ago. Self-regulation is so much faster." But the NAD doesn't have power to levy punitive fines or issue injunctive relief; it can only recommend that claims in question be modified or discontinued. If companies don't comply, the NAD refers the case to a federal agency, such as the Federal Trade Commission.

Are more advertisers going after each other?

Experts say yes. And more marketers are opting for a noisy court battle over the relatively peaceful self-regulation process. "Back in the day, courts were very reluctant [to get involved] because there was a buyer's beware kind of attitude," said Randall Miller, a partner with Arnold & Porter LLP's McLean, Va., office, who represents plaintiffs and defendants in false-advertising lawsuits. But courts have grown more comfortable intervening, he added. "You typically would advise clients that it's really hard to get a temporary restraining order, courts don't like to do it," he said. "Nowadays I think you could advise clients, 'Hey we have a shot.'"

So how should marketers protect themselves?
The Kraft-Sara Lee fight spotlights another trend: More companies that face suits are filing countersuits. Advertisers need to "be monitoring their advertising competitors and knowing exactly what claims they are making and knowing what are the weak points and what are the things that are most attackable, because you might decide that they are breaking the rules enough that you want to sue them," Mr. Miller said. "But you certainly want to be in a position to respond if they sue you." He went so far as to suggest that big marketers dedicate full-time staff to monitor "every specimen of advertising" from competitors.

Is there anything unique about the Kraft-Sara Lee case?

Experts say the dispute resembles other cases, including many settled by the National Advertising Division. What is different is that the case has proceeded this far; most are resolved during the injunctive phase, said Linda Goldstein, a leading ad industry lawyer with Manatt, Phelps & Phillips. "Very, very few of these cases actually go to trial" she said. "But when they do, they will often address core issues that are significant for most advertisers."

So what possible precedents might be set?

The judge could provide more clarity on how taste tests can be used and operated. Sara Lee alleges Kraft's taste test was invalid because "contrary to accepted standards, these tests asked respondents to taste 'naked' boiled hot dogs that were presented on paper plates without condiments." Said Ms. Goldstein: "It's an interesting case in terms of what's been called 'testing under conditions of consumer relevance.' The issue here being most consumers would eat their hot dog with some condiment. Is it a fatal flaw to test a product without offering those condiments?"



zip codes by city said...

interesting battle between the giant food chain and the hot dogs are in between.

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