What Is Comparative Advertising?

Comparative advertising is a marketing strategy in which a company's product or service is presented as superior when compared to a competitor's. A comparative advertising campaign may involve printing a side-by-side comparison of the features of a company's products next to those of its competitor. It may also feature a comparison based on value or cost. Typically, the competing product is shown in a disparaging light.

Key Takeaways

  • Comparative advertising is a marketing strategy in which a company's product or service is presented as superior, specifically calling out a competitor's (inferior) product
  • PepsiCo's Pepsi Challenge ad campaign that directly compares the taste of the beverage to its competitor Coca-Cola is a good example of comparative marketing

Understanding Comparative Advertising

Comparative advertising may compare products or services directly or indirectly and may take either a positive or negative tone, though negativity tends to be far more common. Comparisons may entail a single attribute or multiple attributes.

Comparative advertising is not used solely for the promotion of a product or service. It has become a common technique used in political advertisements, with one candidate listing how he or she would not have made the same specific decisions as the incumbent if elected. This type of advertising is popular with companies releasing new products, as the focus of the ad will be on how the new product is better than products already on the market.

Another highly-referenced comparative advertising campaign is between competitors Coca-Cola and Pepsi, in which advertisements will directly compare the tastes or benefits of one over the other. For example, the now-famous Pepsi Challenge is a recurring commercial that has been aired since 1975. In the Pepsi Challenge, PepsiCo runs taste tests on the street where consumers vote which taste they like better. Both companies are specifically mentioned and compared.

Rules Around Comparative Advertising

In the United States, companies may not engage in comparative advertising without being able to back up the claims that they make. They must be able to prove their assertions of better quality, greater popularity, better value, and the like with facts, and may not engage in false statements or imagery that disparage a competitor. Such rules were set by the Federal Trade Commission (FTC) in 1979 in its Statement of Policy Regarding Comparative Advertising, which states: "comparative advertising is defined as advertising that compares alternative brands on objectively measurable attributes or price, and identifies the alternative brand by name, illustration, or other distinctive information."

Other countries have adopted definitions and rules governing comparative advertising, though each country treats the topic somewhat differently. In the United Kingdom, any comparison that utilized a competitor's trademark was considered infringement. In Australia, there are no laws that specifically address comparative advertising, but there are standards based on legal precedent.

Comparative Advertising Methods

A common tactic for comparative advertising is the use of a fake product that represents a competitor. Ad viewers will associate the fake product with a competitor's product but since there is no precise comparison or trademark used, it satisfies FTC rules. Another tactic is the use of an ad parody that viewers will associate with a competitor but does not reference them or their product directly.

Sometimes, comparisons may not work as intended, as they can raise awareness among consumers of the product the advertiser's product is competing against. In effect, it acts as free advertising — especially if the difference between products is not significant enough in the eye of the consumer.