|By Greg Schulz||
|November 21, 2012 07:01 AM EST||
IBM vs. Oracle, NAD intervenes, again
By Greg Schulz
With HP announcing that they were sold a bogus deal with Autonomy (read here, here and here among others) and the multi billion write off (loss), or speculation of who will be named the new CEO of Intel in 2013, don't worry if you missed the latest in the ongoing IBM vs. Oracle campaign. The other day the NAD (National Advertising Directive) part of the Better Business Bureau (BBB) issued yet another statement about IBM and Oracle (read here and posted below).
In case you had not heard, earlier this year, Oracle launched an advertising promotion touting how much faster their solutions are vs. IBM. Perhaps you even saw the advertising billboards along highways or in airports making the Oracle claims.
Big Blue (e.g. IBM) being the giant that they are was not going take the Oracle challenge sitting down and stepped up and complained to the better business bureau (BBB). As a result, the NAD issued a decision for Oracle to stop the ads (read more here). Oracle at 37.1B (May 2012 annual earnings) is about a third the size of IBM at 106.9B (2011 earnings), thus neither is exactly a small business.
For Immediate Release
NAD Determines Oracle Acted Properly in Discontinuing Performance Claim Couched in ‘Contest’ Language
New York, NY – Nov. 20, 2012 – The National Advertising Division has determined that Oracle Corporation took necessary action in discontinuing advertising that stated its Exadata server is “5x Faster Than IBM … Or you win $10,000,000.”
The claim, which appeared in print advertising in the Wall Street Journal and other major newspapers, was challenged before NAD by International Business Machines Corporation.
NAD is an investigative unit of the advertising industry system of self-regulation and is administered by the Council of Better Business Bureaus.
As an initial matter, NAD considered whether or not Oracle’s advertisement conveyed a comparative performance claim – or whether the advertisement simply described a contest.
In an NAD proceeding, the advertiser is obligated to support all reasonable interpretations of its advertising claims, not just the message it intended to convey. In the absence of reliable consumer perception evidence, NAD uses its judgment to determine what implied messages, if any, are conveyed by an advertisement.
Here, NAD found that, even accounting for a sophisticated target audience, a consumer would be reasonable to take away the message that all Oracle Exadata systems run five times as fast as all IBM’s Power computer products. NAD noted in its decision that the fact that the claim was made in the context of a contest announcement did not excuse the advertiser from its obligation to provide substantiation.
The advertiser did not provide any speed performance tests, examples of comparative system speed superiority or any other data to substantiate the message that its Exadata computer systems run data warehouses five times as fast as IBM Power computer systems.
Accordingly, NAD determined that the advertiser’s decision to permanently discontinue this advertisement was necessary and appropriate. Further, to the extent that Oracle reserves the right to publish similar advertisements in the future, NAD cautioned that such performance claims require evidentiary support whether or not the claims are couched in a contest announcement.
Oracle, in its advertiser’s statement, said it disagreed with NAD’s findings, but would take “NAD's concerns into account should it disseminate similar advertising in the future.”
NAD's inquiry was conducted under NAD/CARU/NARB Procedures for the Voluntary Self-Regulation of National Advertising. Details of the initial inquiry, NAD's decision, and the advertiser's response will be included in the next NAD/CARU Case Report.
About Advertising Industry Self-Regulation: The Advertising Self-Regulatory Council establishes the policies and procedures for advertising industry self-regulation, including the National Advertising Division (NAD), Children’s Advertising Review Unit (CARU), National Advertising Review Board (NARB), Electronic Retailing Self-Regulation Program (ERSP) and Online Interest-Based Advertising Accountability Program (Accountability Program.) The self-regulatory system is administered by the Council of Better Business Bureaus.
Self-regulation is good for consumers. The self-regulatory system monitors the marketplace, holds advertisers responsible for their claims and practices and tracks emerging issues and trends. Self-regulation is good for advertisers. Rigorous review serves to encourage consumer trust; the self-regulatory system offers an expert, cost-efficient, meaningful alternative to litigation and provides a framework for the development of a self-regulatory to emerging issues.
To learn more about supporting advertising industry self-regulation, please visit us at: www.asrcreviews.org.
Linda Bean Director, Communications, Advertising Self-Regulatory CouncilTel: 212.705.0129
112 Madison Ave.
New York, NY
Not surprisingly, IBM sent the following email to highlight their latest news:
Wow, I never knew however I should not be surprised that there is a Society of Competitive Intelligence Professionals.
Now Oracle is what they are, aggressive and have a history of doing creative or innovative (e.g. stepping out-of-bounds) in sales and marketing campaigns, benchmarking and other activities. On the other hand has IBM been victimized at the hands of Oracle and thus having to resort to using the BBB and NAD as part of its new sales and marketing tool to counter Oracle?
Does anybody think that the above will cause Oracle to retreat, repent, and tone down how they compete on the field of sales and marketing of servers, storage, database and related IT, ICT, big and little data, clouds?
Anyone else have a visual of a group of IBMers sitting around a table at an exclusive country club enjoying a fine cigar along with glass of cognac toasting each other on their recent success in having the BBB and NAD issue another ruling against Oracle. Meanwhile perhaps at some left coast yacht club, the Oracle crew are high fiving, congratulating each other on their commission checks while spraying champagne all over the place like they just won the Americas cup race?
How about it Oracle, IBM says Im not going to hear anything from you, is that true?
Ok, nuff said (for now).
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