NATIONAL ADVERTISING REVIEW BOARD

Transcription

1 NATIONAL ADVERTISING REVIEW BOARD 70 West 36th Street, New York, NY NARB PANEL # 150 April 16, 2009 NARC PARTNERS Appeal of the NAD Final Decision Regarding Advertising for BP Lubricants' Castrol GTX Brand Motor Oil Panel Members Dr. Jan LeBlanc Wicks (chair) Professor & Graduate Coordinator University of Arkansas Beau Fraser Managing Director The Gate Worldwide Amy Fuller Group Executive MasterCard Worldwide Bill Stabile Senior Director, Brand & Marketing Communications Siemens Corporation Representing the National Advertising Review Board Alan Cohen, General Counsel Bruce Hopewell, Director Representing the National Advertising Review Council Lee Peeler, President Representing National Advertising Division Andrea Levine, Director David Mallen, Assistant Director Kathleen Dunnigan, Attorney Representing Pennzoil-Quaker State Company Nancy Felsten, Esq., Davis Wright Tremaine LLP Christopher Robinson, Esq. Davis Wright Tremaine LLP Carolyn Sellers, Senior Legal Counsel, Shell Oil Company Selda Gunsel, Manager, Lubricants Technology Group - U.S. Shell Oil Company US Robert Sutherland, Principal Scientist, Consumer Lubricants Shell Oil Company US Representing Castrol Lewis Clayton, Partner, Paul, Weiss, Rifkind, Wharton and Garrison LLP Ronald Gizzi, Senior Attorney, BP Lubricants USA, Inc. Gillian Sinnott, Associate, Paul, Weiss, Rifkind, Wharton and Garrison LLP Richard Tittel, Director, Technology Strategy and Product Claim Support, BP Lubricants USA, Inc. phone: fax: Administered for the National Advertising Review Council (NARC) by the Council of Better Business Bureaus (CBBB).

2 REPORT OF NARB PANEL 150 April 16, 2009 Appeal of NAD Final Decision Regarding Advertising for Castrol GTX Motor Oil Background Advertising claims by BP America, Inc. ( BP America ) for its Castrol GTX motor oil were challenged by Pennzoil-Quaker State Company ( Pennzoil ), manufacturer of competing motor oils. The challenged advertisements included television, website and brochure advertising that made the following express claims for Castrol GTX motor oil: Superior Sludge Protection. 57% better than the leading 5W-30. Tests prove it. Superior Sludge Protection Among Leading Oils* [*In 5W-30 and 10W-30 grades]. Tests prove GTX 5W-30 provides superior sludge protection. 57% better than the leading 5W-30 competitive oil in the M271 sludge test. [O]ur new formulation in 5W-40 and 10W-30 grades is so powerful that it passed the industry s toughest sludge standard. Pennzoil also challenged the following claims that it argued were implied by the challenged advertisements: Consumers who use Pennzoil motor oil will suffer significant sludge build-up. Castrol GTX will provide longer engine life than will Pennzoil motor oil. Castrol GTX will prevent engine failure or catastrophic damage better than Pennzoil motor oil. NAD found that the information submitted by BP America did not provide a reasonable basis to support its unqualified claims that Castrol GTX provided superior sludge protection and was 57% better than the leading competitive oil. NAD recommended that BP America discontinue these claims in television advertising, although it permitted BP America to make these claims with appropriate qualifications on websites and in technical bulletins. BP America appealed the recommendation that it discontinue these claims in television advertising, and Pennzoil filed a crossappeal that asks this panel to recommend that the challenged claims not be made, even with qualification, on websites and in technical bulletins. NAD also found that BP America did not provide a reasonable basis to support its claim that Castrol GTX passed the industry s toughest sludge standard, and BP America appealed that recommendation. NAD further found that the challenged advertisements reasonably implied that Castrol, because of its superior sludge protection capacity, can provide longer engine life than its competitors. NAD concluded that its recommended modifications to the express claims would be sufficient to eliminate any unsupported implied claims. 1

3 Findings and Conclusions Superior Sludge Protection and 57% better claims In substantiation of its superior sludge protection and 57% better claims, BP America relied on the results of two tests conducted under a proprietary Mercedes-Benz protocol known as the M271. The M271 test was run two times on different dates once on Castrol GTX, and once on a competitive Pennzoil product. The procedures and protocols for the M271 test are proprietary to Mercedes-Benz and not publicly available. The M271 test is not part of the battery of tests required under either North American or European industry oil certification standards, although it is required by Mercedes-Benz as one of the tests required in order for oil to be certified by Mercedes-Benz for use in its engines. 1 The panel agrees with NAD that BP America had the burden to demonstrate that the testing offered in support of its claims (1) was based on sound methodology, (2) was properly conducted, and (3) produced meaningful, consumer-relevant results. The panel also agrees with NAD that BP America failed to meet this burden with respect to each of these factors. The information submitted by BP America did not demonstrate that the M271 test on which it relies is an appropriate basis for comparative sludge protection claims. The test procedures and protocols are not publicly available and thus NAD was not able to evaluate the test. In addition, there is no published reference data with respect to the M271 test, no correlation to other tests, no field correlation, no published repeatability or reproducibility statistics, and no way to evaluate the statistical significance of the test results. It is significant that the test results were reported in a document that clearly stated No claims can be made based on this document. BP America did not establish that the tests on which it relies on were properly conducted. The submitted test results show that the tests were conducted on different dates and on different test engines, and it is not clear from the information submitted whether the same fuel was used for both tests. In addition, the test of the Pennzoil product was aborted and there is at least a reasonable argument as to the possibility that the test was aborted due to a problem unrelated to what was being tested. The information submitted by BP America additionally did not establish that the tests were consumer relevant in North America, which is where the challenged advertising was directed, or relevant to North American vehicles such as the one depicted in the advertisement. The record included conflicting expert opinions as to consumer relevancy. An from Mercedes-Benz said 1 Industry certification of motor oils in North America is issued through the American Petroleum Institute under Engine Oil Licensing and Certification System standards set with input from several groups; these standards primarily rely on a Sequence VG test to measure sludge protection. Certification in Europe is issued by the Association of European Automobile Constructors, which uses both the Sequence VG test and a second test (M111) to measure sludge protection. In addition to these certifications, a number of automobile manufacturers have developed proprietary tests that are required in order for oil to be certified for use in those manufacturers vehicles. The M271 test is used by Mercedes-Benz as one of several tests required for oils to be certified by Mercedes-Benz. 2

4 that the M271 test is more reliable than a previous test run on an engine no longer in production, more relevant for [Mercedes], and better correlated to current Mercedes-Benz engines. However, the M271 test has not been accepted by either North American or European industry certification organizations, and BP America did not establish that the M271 test produces meaningful, consumer-relevant results for the overwhelming majority of vehicles driven in North America. 2 NAD recommended that BP America be permitted to advertise Castrol s superiority under the M271 test in website and technical bulletins where it could qualify the claims by making it clear that the testing related only to performance in Mercedes-Benz vehicles under proprietary Mercedes-Benz testing. We support NAD s view that consumers are best served when they have access to truthful comparative information. However, Castrol GTX is not approved for use in Mercedes vehicles, and the panel believes that the qualification suggested by NAD would falsely imply that Castrol GTX was approved for Mercedes vehicles. In addition, the panel believes that deficiencies in the substantiation submitted by BP America with respect to the M271 test are sufficiently severe so that the test results should not be used to support any superiority claims. For the above reasons, the panel has determined that the M271 test results submitted in this case do not substantiate the superior performance claims made by Castrol GTX, even with qualification, and thus the panel recommends that they be discontinued in all media including websites and brochures. Industry s Toughest Sludge Standard The panel agrees with NAD s recommendation that BP America discontinue its claim that Castrol GTX passed the industry s toughest sludge standard. BP America argued that this claim was based on Castrol GTX passing the M111 sludge protection test. However, the record does not establish that the M111 is the industry s toughest sludge standard. In addition to the problem of relying on a European industry standard in advertising directed to North American consumers, BP America did not submit evidence to establish that the M111 was tougher than all other industry sludge standards. 3 2 BP America argues that, because Pennzoil advertises that one of its oils meets Mercedes-Benz specifications that rely in part on the M271 test, Pennzoil should not be permitted to question BP America s reliance on the M271 test. The panel agrees with NAD that Pennzoil s truthful advertisement that its oil meets Mercedes-Benz specifications has no relevance to the issue of whether the M271 test provides a reasonable basis for BP America s superiority claims. 3 BP America argued that it was not sufficiently put on notice that it needed to substantiate its claim that Castrol GTX passed the industry s toughest sludge standard. However, this was one of the challenged claims and NAD s opening letter to BP America clearly asked for such substantiation. While there was some confusion on the part of Pennzoil as to what test BP America was referring to as the industry s toughest, it was incumbent on BP America to respond by identifying the test it was relying on and providing substantiation to show that it was the industry s toughest. Instead, BP America initially responded by implying that the toughest industry standard was the M271 test, which it s expert characterized as an improvement over the M111 test used by European industry certification organizations. In its final submission, however, BP America reversed course and argued that the industry s toughest sludge standard was actually the M111 test used in Europe. In order for the NAD self-regulatory process to work efficiently, advertisers must initially respond to challenges by providing adequate substantiation for the challenged claims. An advertiser should not wait until its final submission to provide substantiation. In this case, BP America did not even identify the toughest standard referenced in its advertisements until its final submission. Because of this, NAD appropriately permitted Pennzoil to submit additional evidence with respect to the issues raised for the first time by BP America s final submission. 3

5 Implied claims While the panel shares NAD s concern about the validity of the consumer perception survey offered by BP America, it is recommending discontinuance of the express claims and does not need to resolve any questions relating to what is implied by those express claims. Decision The panel recommends that BP America discontinue its superior sludge protection and 57% better claims, or any other sludge superiority claims based on the submitted M271 tests. The panel also recommends that BP America discontinue its claims that Castrol GTX passed the industry s toughest sludge standard. Given the amount of time that has passed since the initiation of this challenge, as well as the significant deficiencies in the substantiation offered in support of the claims, the panel hopes that BP America will promptly discontinue the challenged advertising claims in all media. Advertiser Statement BP Lubricants appreciates the NARB Panel s work on this appeal. While we respectfully disagree with the Panel s conclusions, as a strong supporter of the self-regulatory process, BP Lubricants will withdraw the challenged advertising. We believe that the record before the NAD and the Panel established that sludge should be an important concern for consumers, and that car makers and many others in our industry believe that minimum standards for sludge protection don t go far enough. Accordingly, BP Lubricants has formulated its Castrol motor oil products to include advanced sludge protection. We are disappointed that the Panel felt that the substantiation we placed in the record in this matter was insufficient, and that we did not adequately anticipate the need to provide extensive substantiation concerning the characteristics and relevance of the Mercedes Benz M111 test, which is part of the European ACEA industry standard. We had believed that issue was not in contention. BP Lubricants will continue its efforts to provide consumers with high quality products that perform beyond minimum standards, and make renewed efforts to advertise those benefits clearly and carefully marshal substantiation of those claims. 4