5 Ad Trends to be Wary of in 2019

January 9th, 2019

One of the ways TINA.org stays on top of deceptive marketing trends is by monitoring the activities of regulators who share our mission, such as the Federal Trade Commission, the Food and Drug Administration, and, increasingly, the Securities and Exchange Commission. We also keep tabs on decisions by the National Advertising Division, a self-regulatory body that largely serves as a mediator between companies that challenge each other’s advertising claims. And then there are the hundreds of false advertising class-action lawsuits we track every year. Based on what we saw in 2018, here are some of the areas in which consumers need to be wary of bad actors and advertisers need to clean up their act, one way or the other, in 2019:

Cryptocurrency

If you are still looking for a New Year’s resolution, here’s one: Don’t take cryptocurrency investment advice from DJ Khaled. There are at least two reasons why you shouldn’t do this, both of which are detailed in a 2018 SEC action against the hip-hop producer (who was also the subject of a TINA.org investigation last year): No. 1, in the above Instagram post, DJ Khaled neglected to mention that he was paid tens of thousands of dollars to promote the initial coin offering (ICO) as a “Game changer.” No. 2, the SEC alleges that the ICO was fraudulent. Specifically, the SEC claims that Centra Tech raised more than $32 million from thousands of investors through the use of false and deceptive marketing claims. The SEC appears willing to lead the fight against cryptocurrency security scams and we predict that there will be much more to come in the New Year. If you’re wondering, DJ Khaled was forced to pay back the $50,000 he received from Centra Tech, as well as a $100,000 penalty.

Homeopathic products

 

Marketers of homeopathic products would be wise to hold off regifting any label maker they might have received over the holidays as the office supply may come in useful for 2019. For the first time since the FTC announced in 2016 that it would hold homeopathic drugs to the same scientific standard as other products making similar health claims, the agency took action in 2018. As a result, the maker of a homeopathic spray agreed to add a disclaimer to its label (and other marketing materials) stating: “(1) There is no scientific evidence that [Nerve Pain Away] works and (2) the product’s claims are based only on theories of homeopathy from the 1700s that are not accepted by most modern medical experts.” While the general scientific community roundly rejects homeopathic medicine as pseudoscience, the market for homeopathic products continues to grow. But the appeal of these products may be tested in 2019 if consumers start to see disclaimers like the one above on the labels of their favorite homeopathic remedies.

CBD

 

When the FDA announced in June of last year that it had approved the “first drug containing cannabidiol” or CBD for epilepsy, it may have unwittingly sent a message to marketers of CBD products that they were free to market their products using unproven health claims, which is simply not the case. Many CBD proponents, including distributors for an MLM company called HempWorx that TINA.org investigated last year, not only improperly claim that CBD treats, cures, and mitigates a plethora of diseases but also that selling cannabis is perfectly legal in the U.S. Yet the Drug Enforcement Agency still classifies all cannabis extracts as Schedule 1 controlled substances, the same category as heroin, despite its legalization in several states. TINA.org has another CBD MLM on its list for 2019. As we are wont to say, check back for updates.

Sponsored content (again)

 Sponsored content aka native advertising aka 100 other monikers has been on this list before, in 2016. The reason it’s back is because — surprise — the distinction between sponsored content and editorial content hasn’t gotten any clearer. That line that ostensibly used to separate the two has all but disappeared. But that doesn’t change the fact that consumers should know when what they’re reading is advertising. Not only did a 2018 NAD decision fail to hold BuzzFeed accountable in this regard, it set a dangerous precedent for other publishers in 2019 and beyond to manipulate editorial content for the purposes of avoiding scrutiny of advertising claims. NAD ruled in part that sponsored content isn’t sponsored content if the original intent of the subject matter is to educate readers, even if the end product generates advertising revenue for the publisher. Here’s why we disagreed.

MLM health and income claims 

 

While we take issue with NAD for its BuzzFeed ruling, we are hopeful that a new program for the multilevel marketing industry staffed by a three-member panel of its umbrella organization, the Advertising Self-Regulatory Council, will provide much-needed surveillance of health and income claims in the MLM industry, particularly on social media. But if the self-regulatory scheme becomes just a way for larger MLMs to bully smaller MLMs, that would be a missed opportunity. Adding to our skepticism is the fact that the program will be funded by the Direct Selling Association, the MLM industry trade group whose member companies repeatedly skirt FTC and FDA law (not to mention the DSA’s own Code of Ethics) through the widespread promotion of inappropriate health and income claims. TINA.org scooped the story at NAD’s annual conference last September. The program launched Jan. 4.

Find more of our coverage on advertising trends here.

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Multi-Level Marketing – a way of distributing products or services in which the distributors earn income from their own retail sales and from retail sales made by their direct and indirect recruits.

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