Comparative & Competitive Advertising

Comparative advertising, also referred to as comparison advertising or competitive advertising, is a common form of marketing that involves making comparisons between different brands or products. Comparative advertising may directly compare two or more brands or products, or it may take the form of an indirect comparison.

Indirect Comparative Advertising

Indirect comparative advertising makes a comparison between one brand or product and other brands or products without specifically naming them. For instance, a commercial alleging that one brand of fabric softener is the best value, is the least expensive, or performs the best, indirectly alleges that all other brands of fabric softener are more expensive or perform worse than the named brand.

Direct Comparative Advertising

In direct comparative advertisements, commercials will specify a competing brand or product by name and allege that brand or product being promoted is in some way superior. This most frequently occurs when an industry is dominated by two primary competitors. For example, commercials directly alleging that Pepsi is superior to Coke, or that Apple computers are better than computers running Microsoft system software, constitute direct comparative advertising. One famous direct-comparison campaign was when Avis admitted that it was No. 2 in car rental companies to Hertz at No. 1, but the Avis ads claimed, "We try harder."

Clarity in Comparative Advertising

In the United States, there are laws dictating the legality of direct comparative advertising. One such law is that if a company uses the trademark or logo of a competing company in an advertisement, consumers must be able to identify the source of the advertisement. If Pepsi used the logo of Coca-Cola in such a way that consumers might believe that the commercial was actually sponsored by Coca-Cola, that would constitute a breach of advertising law for which Coca-Cola could rightfully sue.

Truth in Comparative Advertising

The other primary rule of thumb when determining the legality of direct comparative advertising is that it must be truthful. If Coca-Cola claims that in blind taste tests 9 out of 10 participants chose its products over Pepsi products, it must be able to prove that those tests were actually held. Otherwise, Pepsi could sue Coca-Cola for false advertising. For the same reason, a company should never express an opinion as a fact in direct comparative advertising.