The Importance and Role of Advertising and Product Claims Today
Advertising and product claims are an essential tool for companies across industries to differentiate from competition, justify price points, and build a compelling brand. As direct sales and marketing via digital and social channels have enabled smaller more nimble competitors to gain footholds in established categories, and in some cases become formidable competitors in their own right, now more than ever, an agile claims engine is a critical capability for companies planning to maintain or grow market share.
At the same time, advertising claims are coming under increased scrutiny from consumer advocacy groups, competitors, NGO’s and government regulators. Consumers are demanding transparency and forcing product accountability - and companies as well as regulators are bowing to the will of the consumer. In this environment of more intense competition, and heightened regulatory scrutiny, advertising claims challenges are becoming more and more common. If companies can’t respond to these challenges quickly and confidently, they may be faced with protracted lawsuits, costly recalls, and perhaps irreparable damage to brands.
Companies across industries, from consumer goods, to beauty and personal care, to food and beverage must move quickly to respond to various sources of pressure in the claims ecosystem. These pressures can come in the form of changing consumer tastes or opinions, new claims by competitors, or changes in the regulatory environment. At the same time they must do so in a manner that enables them to respond quickly to challenges.
The world of advertising claims is constantly evolving, and so it’s interesting to look closely at some of the trends shaping its evolution.
This Advertising Claims Management Trends Report focuses on four verticals: consumer goods, cosmetics, food & beverage, and home & personal care. Panelists were senior professionals with roles in marketing, legal, regulatory, and R&D, all of whom were actively involved in the process of creating, substantiating, or managing advertising claims.
Claims development activity across the companies surveyed is increasing. This is no surprise, as competition has heated up across categories over the past several years driven in part by new, more agile entrants enabled by social media and ecommerce. In fact 67% of respondents reported increased claims development activity compared to five years ago. This was particularly true in the home & personal care industries (82%).
Claims management is very time consuming across functions, with most respondents spending between 11 and 20 hours per week working on claims related activities. Half to three quarters of this time is spent in inperson meetings. As one might expect, a majority of respondents reported that the need to work from home brought about by Covid-19 has made the cross functional work required for claims management more challenging.
The survey also found that the average number of people actively engaged in claims management does not tend to scale with company size, so those engaged in managing claims become severely stretched in larger companies.
This year we probed around the process of claims management in the context of packaging creative. We found that companies typically review at least 3 rounds of packaging creative during the process of bringing new packaging to market, and that a majority of respondents report errors in claims or other copy up to 50% of the time. Somewhat ironically, errors in claims on packaging can often result in challenges by competitors or regulators, and respondents rated marketing and packaging costs as the highest expense related to a challenge.
Given the critical importance of claims, the increasing activity to develop new claims with limited resources, and the potential for costly claims challenges, it’s not surprising that 87% of respondents are looking for a better solution for advertising claims management.