Better Business Bureau Advertising Review Programs
The National Advertising Review Board
Brief Summary of Procedures
1. History of the NARB
In an effort to sustain "truth and accuracy in national advertising" through self-regulation, a two-tier system was created by the advertising community in 1971. It consists of the National Advertising Division of the Council of the Better Business Bureaus, Inc., the NAD; and the National Advertising Review Board, the NARB. The NAD is the investigative body, while the NARB is the appeals body of the system.
Nominations for NARB Board Members are made by the NARB's supporting organizations: the Council of Better Business Bureaus, Inc.; the Association of National Advertisers; the American Association of Advertising Agencies; and the American Advertising Federation. These nominations are submitted to the National Advertising Review Council (NARC), the governing body of the NARB, for election at its Annual Meeting.
The 85 advertising professionals which make up NARB come from three different categories: Public/Academia; Advertiser; and Advertising Agency. The term for membership is two years, however, each member is eligible to be reappointed for one additional two-year term.
2. Process
NAD is the first-level which investigates the truthfulness and accuracy of a national ad and NARB is the second part of the self-regulatory process. When an advertiser or challenger disagrees with NAD's findings, NAD's decision can be appealed to the NARB for additional review. The advertiser (whose ad claims are in question) has an automatic right to a review by an NARB panel, however, the complainant (also referred to as the challenger) must have approval from NARB's chairman. The NARB Chairman will only grant a challenger's request for an appeal if he determines that there is a likelihood that a NARB panel would reach a decision different from NAD's decision.
3. Selection of Panel Members
When a controversy is not resolved at the NAD level, an appeal is accepted for NARB review. Each NARB panel consists of five members who review and adjudicate -- three representatives from advertisers, one agency and one public member. The Executive Director of the NARB will designate one of the five as panel chairperson.
Care is taken to screen out actual or apparent conflicts of interest an NARB Panel Member may have to assure the appointment of an impartial panel. For example, an NARB advertiser member will not be considered should his/her employing company manufacture or sell a product or service sold by the advertiser involved in the proceeding. An NARB advertising agency member is not considered qualified if his/her employing agency represents a client which sells a product or service competitive with that concerned in the proceedings, and if the member is or has been directly involved in that account.
Before a panel hearing, panel members receive the entire "case record," as well as written briefs of the positions taken by the NAD, the complainant, and the advertiser. Panel hearings are generally held in New York City and require the better part of a day. Present at these "round table" discussions are representatives of the NAD, the advertiser, complainant, and including, frequently, outside counsel, research and development and marketing people. It is not unusual to have 20-25 attending.
4. The Panel Hearing
All arguments during the panel hearing are limited to the issues under review as contained in the "case record"; no new evidence is to be considered. If significant new evidence is presented, the panel may remand the case to the NAD for further investigation.
Following the chairperson's remarks, the NAD usually leads off the presentations by reviewing its findings and giving the rationale of the decision. The advertiser may follow with arguments and analysis of its substantiation of the questioned claims. The challenger will then present the reasoning of its position. Any party that has requested an opportunity to appear and offer testimony shall be accommodated provided the evidence presented had been subject to prior NAD and advertiser review. All parties shall submit to questions by panel members.
After all "testimony" is heard, the parties are excused and the panel, along with the NARB Counsel and the NARB Executive Director, will meet in an executive session and discuss the panel's verdict. The panel will either uphold, modify or reverse the NAD decision. Although a majority of the panel will rule, panels often achieve an unanimous opinion of the advertising in question.
5. The Panel Report
The NARB's General Counsel, assisted by the Executive Director, will prepare the first draft of the panel's decision, including a rationale of the panel's opinion on the evidence presented. This and subsequent drafts are disseminated to all panel members for their review, additions, corrections and general input.
Upon approval of the draft by all panel members, the final panel report is sent to the advertiser, who has ten days to indicate his acceptance or rejection of the decision. The advertiser may also include a statement, should it wish, that becomes part of the panel's final report.
The panel's recommendations are non-binding, however, in the spirit of self-regulation, almost all advertisers accept the NARB Panel's findings and recommendation. In the extremely rare instance of an advertiser's unwillingness to to accept the panel's recommendations, NAD/NARB Procedures call for a referral of the matter to an appropriate law-enforcement agency.
All proceedings are kept confidential; only the panel report is made public.
The panel report is publicly released to the press and subscribers which include ad agencies, corporations, law firms, universities, government offices and other interested parties.
6. Consultive Panels
From time to time, NARB will be asked to consider the content of advertising messages in controversy for reasons other than truth and accuracy, or the NARC or the NARB may conclude that a question as to social issues relative to advertising should be studied. Such Consultive Panels result in published studies such as: "How the Elderly Are Portrayed In Advertising" and "How Women Are Portrayed in Advertising."
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