Comparative Advertising: Competitor Analysis
What is comparative advertising? Comparative advertising is where companies like to pit their product features next to other well known competitors in an effort to differentiate their product. You have probably seen this in a table format with product features listed along the right with check marks showing which product holds which features. This is usually occurs when either the company sees particular features they hold to be a competitive advantage, or simply because their name is not as strong as the other leading competitors.
So this brings up a few questions to consider.
- Should I do comparative advertising? What are the pros and cons?
- Are there any legal ramifications for using competitor names and what are the legal considerations for the claims you make about your competitor’s product?
Let’s briefly tackle them here.
Why do Comparative Advertising?
Comparative Advertising allows you differentiate your product. If you have a competitor with a very strong brand name, one of the first questions in the minds of your consumers is..
- Why should I buy this brand that I am not familiar with over the name I know and can trust?
- How can I trust this site?
You have to be able to gain the consumers trust and/or offer a product that is much better than your competitors so the consumer is enticed to take the perceived risk transacting with your company.
It is similar to purchasing an electronic device. If I am searching for an mp3 player I know I could get an ipod and be certain of it’s quality and certain of apple’s reputation. If I search mp3s players and land on a page by company XYZ, the first thing that needs to catch my eye and make me even consider the product is the design. Apple’s highly polished and simple design is hard to beat. Once the product catches my eyes I’ll scan the features. Luckily for me I know the features of an ipod so internally I am comparing the two products. For your product, you may need to spell out the differences if it isn’t very clear. Why should I buy this product? Spell it out. Everything and anything you think the consumer is looking for where you know you are better, let it be known.
In this case of the mp3 player, since everyone knows an ipod, there isn’t much risk in stating comparisons to the ipod. However you should carefully think about whether or not you want to mention competitors that consumers may not be aware of. Remember that comparison shoppers, like yours truly, are out there doing research when buying a product. If you start comparing your mp3 player to 5 other competitors that I’ve never heard of, you’ve now alerted me of these 5 other mp3 options. I’ll probably go research those too and who knows how many of those competitors are doing their own comparative advertising claiming how their product is better. Also keep in mind that you may think particular competitors are well known simply because you live in the industry. This may not be the case for the average consumer. You are not the consumer!
What are the legal considerations for Comparative Advertising?
The Federal Trade Commission promotes lawful comparative advertising because it is considered a great way of increasing competition and informing consumers of their product. So first of all it is legal. That was easy. Now the risk.
One question to ask though is whether it is worth the risk of being sued by your competitor. You can be as truthful and careful as you’d like but no one can stop someone from suing you especially when they have the money to back it up. I would first do an investigation in the competitors you want to mention.
- Are they doing comparative advertising? If they are, they are probably less likely to sue you for doing the same. Take some screenshots as a precautionary measure.
- What is their litigation history? Do they have a history of suing other companies especially over minute issues. Do they have an army of lawyers and unlimited budget to muscle their desires on smaller companies?
After your initial investigation, please do your research or consult your legal team in regards to all the advertising and trademark laws you should consider. Some keypoints are well highlighted from this excerpt from seomoz. See below.
- All of your claims about your competitor’s product must be true.
- Comparative advertising must never be deceptive. Do not mislead consumers.
- If you make specific claims about your competitor’s product, be sure and have a third party substantiate those claims in a reasonable and thorough manner prior to running the ad. Don’t wait until you are sued to do the research that proves your claims. Document and substantiate your claims.
- Include a disclaimer indicating that you are not affiliated with your competitor in any way. I realize this is not intuitive. Why would people think you’re affiliated with your competitor when you are criticizing their product? The answer is that some courts have ruled that consumers who take a cursory look at the advertisement may recognize your competitor’s branding and then, without reading more, assume that you’re affiliated. I realize that having a disclaimer doesn’t really solve this quick association problem, but judges seem to think that it does, so follow their rules.
- Don’t manipulate your competitor’s trademark or logo in any way and always use the ® symbol if it is a registered trademark. “Don’t manipulate” means do not alter the shape or color of the logo or create a parody of your competitor’s trademark. Even if your product is bigger, faster, and stronger, you are still violating advertising laws if you alter your competitor’s logo in any way. Respect the brand while you accurately point out the ways it is deficient to your product.
Ok hope this helps in your decision making.
If you have any comments or question please submit below!
Director of Online Marketing