(Updates with Super Bowl advertising buys starting in the third paragraph.)
Jan. 24 (Bloomberg) -- Ten days before broadcast of professional football’s Super Bowl provides automakers their biggest U.S. advertising day of the year, regulators warned that creativity must have its limits.
The Federal Trade Commission said yesterday that Nissan Motor Co.’s North American unit and its advertising agency used special-effects trickery to exaggerate the performance of the Frontier pickup truck, the agency’s first such case against an automaker in more than 20 years.
Automakers are spending as much as $6 million for 30-second commercials as the biggest sponsors of the National Football League’s championship game, and advertising executives said the FTC was sending a message.
“Auto ads have stretched the limit a little bit,” said Mike Bernacchi, a marketing management professor at the University of Detroit Mercy. “There’s a flare going up.”
The Nissan advertisement targeted by the FTC, titled “Hill Climb,” shows a Frontier speeding up the side of a steep sand mound to nudge a stuck dune buggy to the top.
The ad made the incline look significantly steeper than it was, the FTC said. Furthermore, the truck was presented as unaltered when it was pulled by hidden cables, the agency said.
The agency cited the Nissan unit for portraying the demonstration in a “realistic YouTube style, as if shot with a mobile phone video camera.”
“Special effects in ads can be entertaining, but advertisers can’t use them to misrepresent what a product can do,” said Jessica Rich, director of the FTC’s bureau of consumer protection. “This ad made the Nissan Frontier appear capable of doing something it can’t do.”
More recently, Nissan has run ads for its Rogue seeming to show the SUV jumping a ramp onto the roof of a moving train to escape a traffic jam.
The ad has multiple disclaimers noting it is “fantasy” and that “cars can’t jump on trains.” The Hill Climb ad flashed a disclaimer for a few seconds before the truck appears, stating: “Fictionalization. Do not attempt.”
Advertisers know disclaimers have to be more visible and blunt than the one Nissan used in the Frontier commercial, said said Lee Peeler, a former FTC deputy director who’s now president and chief executive officer of the Advertising Self- Regulatory Council, a New York-based industry watchdog.
“There’s always a line between great creativity and showing something the product can’t do,” Peeler said.
At least seven automakers have bought ads during the Fox TV Super Bowl telecast, according to researcher Kantar Media. Jaguar, the luxury brand owned by Tata Motors Ltd., Kia Motors Corp. and Toyota Motor Corp. are among those planning to run spots.
Automakers spent $105.4 million before, during and after last year’s Super Bowl, according to Kantar Media. Their ads during the game alone cost $92 million, a fivefold increase from $18 million in 2009.
The last FTC enforcement action involving vehicle features was in 1991, when the Swedish automaker Volvo and its agency agreed to pay $150,000 fines to settle deceptive-advertising claims. For a commercial featuring a monster truck rolling over a line of vehicles, Volvo reinforced the roof of one of its cars while structurally weakening the products of competitors.
The FTC last cited automakers for deceptive advertising in 1996, when five companies including the predecessor of General Motors Co. and Honda Motor Co. were accused of misleading claims about leasing. Mazda Motor Corp. was fined in 1999 for violating the terms of the order.
Peeler’s watchdog group has heard three cases involving deceptive automotive claims in recent years.
The most recent was in 2012, when Jaguar Land Rover Automotive Plc challenged a Chrysler Group LLC claim that the Jeep Grand Cherokee was the “most awarded SUV ever.” The industry group said there was a reasonable basis for the claim while asking for wording changes.
Land Rover successfully defended as truthful a 2007 ad that showed an SUV driving in high water. Daimler AG’s Mercedes Benz was asked to remove scenes from a 2006 ad depicting a fictionalized test overstating the crashworthiness of its GL Class vehicles.
Nissan and its agency, TBWA Worldwide Inc., weren’t fined. They agreed not to use misleading demonstrations of pickup-truck prowess in the future, according to the FTC. The orders don’t prohibit special effects, as long as they don’t mislead consumers about something a truck can’t do in real life.
Nissan’s American depository receipts were up 18 cents yesterday, or 1 percent, to $18.60.
“Nissan takes its commitment to fair and truthful advertising seriously,” David Reuter, Nissan spokesman, said in an e-mailed statement. “The company has been and remains committed to complying with the law.”
--With assistance from Andy Fixmer in Los Angeles and Mark Clothier in Southfield, Michigan. Editors: Bernard Kohn, Elizabeth Wasserman