NAD Initiating Review of Brand Claims of Social Justice Initiative Support
By: Meg Tierney
Summary: In February 2022, the National Advertising Division (NAD) of the Better Business Bureau published two decisions related to truth in advertising when making claims about a company’s social justice initiatives. As part of its ongoing monitoring program, the NAD initiated challenges of advertising claims made by Niantic, Inc. (Niantic)[1] and DoorDash, Inc. (DoorDash)[2] regarding allied monetary donations to a variety of social justice initiatives and organizations.
The NAD first challenged an express claim made by DoorDash, a food delivery giant that gained popularity during the Covid-19 pandemic as customers were reluctant to leave their homes. DoorDash claimed that it was donating $1 million to be split between the Black Lives Matter movement and DoorDash’s own Black@DoorDash Employee Resource Group. DoorDash presented evidence to the NAD to substantiate its claim, in the form of receipts, invoices, and acknowledgement letters from various organizations. The NAD found that DoorDash’s evidence was sufficient to substantiate the challenged claim.
The second challenge was brought against Niantic, the software developer behind the viral video game PokemonGO. Niantic made an express claim that at least $5 million in proceeds from ticket sales for a PokemonGO festival would be donated to fund “new projects from Black gaming and AR creators” and “organizations that are helping local communities rebuild.” Niantic similarly provided evidence and receipts confirming its donations to a variety of social justice organizations and, in fact, proved that they had donated well over the $5 million initially promised.
In both decisions the NAD pointed out that the challenged claims constitute advertising because they are meant to persuade customers to purchase the advertisers’ products. The NAD specifically noted that “consumers who care about a company’s commitment to social justice will find [the advertiser] to be appealing and may choose a product or service from that company over a competitor that has not committed to make donations to social justice organizations.”
As engagement with and loyalty to brands are tied to more than the specific products and services sold, a brand’s expression of its corporate values and sentiments on issues resonates with consumers. These cases serve as a reminder to be truthful in such statements and have sufficient substantiation for the claims made.
[1] National Advertising Division v. Niantic, Inc., Case No. 7037, NAD/CARU Case Reports (February 2022).
[2] National Advertising Division v. DoorDash, Inc., Case No. 7036, NAD/CARU Case Reports (February 2022).