What Happens If A Brand Breaks Advertising’s Golden Rule?

Effective marketing is about showcasing a brand in the best possible light that will convince customers to explore and potentially buy into it, and a branding agency will explore which potential strategies fit best from the conventional to the outlandish.

In marketing, there is one golden rule, however, which is that no matter what is said about a product, it cannot be misrepresentative or false.

This seems obvious to the point of being a truism but there is a surprisingly fine line between artistic exaggeration and outright lies, and no credible marketing department will take part in the latter.

The former, known legally as puffery, is more common and largely expected because the claims made are so exaggerated that no reasonable person would believe them to be factually true. 

For example, the energy drink Red Bull does not literally “give you wings” but it provides a striking image of how it is supposed to make a customer feel.

Companies that have indulged in the latter, however, often end up in serious trouble, not just with the Advertising Standards Agency but can lead to reputational damage and even legal claims.

To return to Red Bull, claiming it “gives you wings” is perfectly acceptable, but claims that it can help reaction times and concentration were actionable and cost Red Bull millions.

However, there are far worse cases than this, ones that cost huge amounts of money and have an even greater reputation cost.

Oatly

The oat milk brand Oatly is a particularly tragic example of false advertising, given that their unique marketing strategy following their rebrand had been hailed for its innovation, playfulness and striking personality.

However, a 2021 advertising campaign got them into trouble for not providing evidence to claims it made and making somewhat misleading comparisons.

This led to adverts being banned, but what made this worse is that a short seller by the name of Spruce Point Capital accused the company of greenwashing themselves, a huge allegation for a company promoting itself on its green credentials.

Whilst the company is still going, attempts to aggressively expand have been slowed down, with a planned factory in the UK ultimately shelved.

Activia

A particularly expensive example of breaking the golden rule, the yoghurt brand Activia was initially marketed as a health food, with stains of bacteria that could help to improve digestion and the immune system.

The claims Activia made were argued by parent company Danone to be “clinically proven”, something later found not to be the case by the United States Federal Trade Commission (FTC), as well as by the European Food Safety Agency and by a court in Quebec, Canada.

By 2010, Activia had dropped its claims of being a health food or functional food, instead prioritising taste as its main selling point and focusing more on the more nebulous, less legally definable area of “wellness”.

Volkswagen

The German car giant VW is in some respects too big to fail, but that does not hide the long-term damage of their “defeat devices” and the tens of billions paid out in damages and settlements alone, or the prison sentence given to Oliver Schmidt.

In the United States, in particular, where VW was a major part of the diesel market, the results were utterly decimating, ultimately causing the company to pull out of the market entirely.