Nissan North America, Inc. and the advertising agency that designed a television advertisement for the Nissan Frontier pickup truck have agreed to settle Federal Trade Commission (FTC) charges of deceptive advertising in a 30-second ad demonstrating how a Frontier can push a dune buggy up a steep hill, something the truck allegedly cannot do.

Here is how the FTC’s claims were described in a January 23rd report by FTC Senior Attorney Leslie Fair.

When an ad purports to show a “right before your eyes” demonstration of a product in action, the visual must be a truthful representation of what it can do.  If that’s not the case, both the advertiser and the ad agency can find themselves in law enforcement quicksand. …

The ad in question is an eye-popper.  A dune buggy struggled to conquer a sand dune worthy of Lawrence of Arabia.  A male onlooker – with apologies to “Big Lebowski” fans, let’s call him The Dude – stood in the foreground.  As the dune buggy spun its wheels, The Dude yelled to the driver, “Gun it, bro.”  Gun it bro did, but to no avail.  Then out of nowhere, a Nissan Frontier appeared.  Not only did the pickup scale the steep hill with ease, but it pushed the stuck buggy up the dune, too. …

According to the FTC, the ad had the look of a YouTube-type video captured by a smartphone. …

[H]ere’s what the FTC says really happened.  First, both the truck and the buggy were dragged up the dune with cables.  In addition, the dune was made to appear much steeper than it was through the use of camera tricks.  According to the FTC’s complaint, it was a false representation because … the Nissan Frontier pickup can’t perform the feat shown in the ad.

FTC law banning the use of deceptive demonstrations dates back to a 1961 decision upheld by the Supreme Court.  In that case, the commercial appeared to show a razor easily shaving sandpaper that had been softened with the advertiser’s shaving cream – except that the shaving cream wasn’t capable of softening sandpaper as shown. … This meant that the company’s purported “demonstration” of how the shaving cream would soften a rough beard was deceptive because it misleadingly depicted how the product would perform.  The FTC’s settlement with Nissan reflects that same legal principle.

Here’s another point for advertisers to ponder.  In the first three seconds of the Nissan ad, the phrase “Fictionalization.  Do not attempt.” appeared on the screen.  Clearly, the FTC didn’t think that was effective to undo the misimpression that people were watching a real Nissan pickup in action.  Of course, the effectiveness of disclosures is a fact-specific analysis, but it shouldn’t surprise experienced marketers that a fleeting superscript in white letters against a sand dune didn’t meet the FTC’s “clear and conspicuous” standard. …

Another noteworthy aspect of the case: The FTC also filed suit against Nissan’s ad agency….The complaint charges that the agency knew or should have known that the claims conveyed in the ad were false or misleading. …

The proposed settlement forbids Nissan from misrepresenting any feature of its pickups through a test, experiment, or demonstration. …

Does this case suggest there’s a legal problem with creativity in ads?  Of course not.  But when a visual conveys to consumers that it’s an actual demonstration of what the product can do, companies should be mindful of their obligation to substantiate their claims.

In sum, as reported by Ms. Fair, an FTC Official, if an ad depicts a demonstration, the demonstration must be accurate and adequately substantiated, not “tricked up.”  And the advertising agency also risks a legal claim if it “knew or should have known” that these legal standards were not met.