If you’re a dealership owner or manager, there’s a good chance you’re a little familiar with Advertising Compliance, but did you know there is a difference between Brand Compliance and Legal Compliance? At The Automotive Advertising Agency, we deal with compliance guidelines on a daily basis, and have put together this guide to help illuminate the differences between the two.
Brand Compliance is something that franchise dealerships should have at least a passing familiarity with, as it is a major component of receiving COOP funds. Put simply, Brand Compliance is a set of rules set by OEMs regarding how their brand should be represented. This can cover a wide range of topics such as store structure and signage, but mostly pertains to advertising guidelines. Some compliance requirements are pretty obvious, such as including the proper brand logos, but there are plenty that you would never think of without reading the rules. Those are what can really trip up dealerships. For example, Ford and Nissan both require that you source rebates, so instead of listing $2,000 of Cash Back, you would need to say $2,000 of Nissan Cash Back. This simple distinction can mean the difference in receiving all or none of your COOP funds, and is why getting it right is so important.
Most OEMs offer some level of pre-approval for advertising, so usually, it’s pretty easy to get Brand Compliance right. You just submit your ad, and if they approve it, it’s good to go! That being said, having an understanding of the guidelines and knowing what to look for yourself can save you a lot of back and forth with the OEM, and can help you get your ads up faster. When it takes up to three days just to hear back on the first submission, getting something right the first time can mean making or missing a deadline. Understanding guidelines from General Motors is especially important, as they offer a very minimal pre-approval process, only assessing GMC and Buick newspaper ads beforehand. If you get a GM ad wrong, there’s not much you can do other than pay up. That’s why it is so important to have your ads created, or at least assessed, by experts in brand compliance guidelines. Our team at The Auto Ad Agency has decades of combined experience navigating the murky waters of brand compliance, and can ensure you receive the highest possible reimbursement on your media spend.
A common misconception is that if you have an advertisement that is approved by the OEM, you are covered legally. This is not the case. OEM compliance and legal compliance generally have no relation to each other whatsoever. The main difference between the two is that OEM compliance is designed to protect the OEM’s brand, while legal compliance is designed to protect the consumer from predatory advertising, and the dealership from litigation. Creating advertisements that adhere to these rules can be especially tricky if you are not familiar with the regulations, as they can vary wildly by state. Whereas all Nissan stores must follow the same guidelines, two stores 20 miles apart across state lines may have drastically different legal requirements. That’s why it is imperative that you thoroughly understand the requirements of your area.
Now you may be thinking, “This isn’t strictly allowed under my state rules, but we run ads like this all the time. My competitor’s do it, what the big deal?” Every time you run an ad that comes in conflict with state advertising rules, you are taking a big risk of incurring fines and opening yourself up to litigation by litigious consumers. For example, I know of dealerships that have been fined $10,000 for a single ad placement they insisted on running. It can be especially ill-advised to run ads with code violations if there is any bad will between your store and rival dealerships. It’s certainly not unheard of for competing stores to keep a close eye on each other’s advertisements, looking for any error they can report to the state. For these reasons, it is vital to have an advertising partner that understands the ins and outs of legal compliance. A partner like The Auto Ad Agency! We work with dealerships across the country, and understand the different laws from state to state.
If you have any questions about Brand or Legal Compliance, please reach out to us at The Automotive Advertising Agency. We have decades of combined experience helping dealerships produce hard-hitting creative that adheres to all compliance rules, protecting your investment, and your business.