Nest Labs ‘Disappointed’ in NAD Review Upholding Honeywell Ad Claims

In its review, NAD examined advertised claims by Nest about the number of programmable thermostats that are programmed by consumers (11 percent) and the number that are not programmed because they're so complicated (89 percent) and that thermostats from other manufacturers waste energy. In its recommendations, NAD said Nest’s substantiation for its 11 percent and 89 percent claims was based primarily on a study by the Lawrence Berkeley National Laboratory that concluded that 89 percent of Americans rarely or never program their thermostats to save energy. Following its review of the findings, NAD recommended that Nest discontinue advertising “its unsupported specifically quantified claims” that only 11 percent of other programmable thermostats are programmed to save energy, that 89 percent of other programmable thermostats are not programmed because “they're so complicated that most people don’t bother to program them” and that “other thermostats waste energy.”

Nest voluntarily discontinued ads claiming its learning thermostat “can automatically lower air-conditioning costs up to 30 percent,” as well as exclusivity claims about its System Match, Filter Reminders and iBuilt-in Level features. NAD called that decision “necessary and appropriate."

In advertising, Nest has claimed that its Nest Learning Thermostat works in 95 percent of homes with low-voltage systems. NAD concluded that Nest provided a reasonable basis for its claim but it recommended that the advertiser “clearly and conspicuously” disclose that its claim is based on the results of the data from online users of its Compatibility Checker.

Regarding claims of exclusivity, NAD recommended modifications to the language used in Nest’s advertising. Nest’s claims of exclusivity covered the thermostat’s ability to adjust heat pump systems to balance efficiency and comfort; adjust radiant heat systems to give a predictable schedule and even heat; turn heat on “early” to have temperature adjust to a pre-set level by a pre-set time; turn an air conditioner’s compressor off before a target temperature is reached; and notify a user that it’s time to change the furnace filter based on system runtime. Another claim of exclusivity covered a built-in level to facilitate installation.

NAD recommended that Nest modify language to indicate the features themselves aren’t exclusive to Nest, but the technology used to enable them is. It recommended, for example, that Nest modify the claim associated with its Early-On feature to “more accurately convey the message” that Early On, rather than being a feature exclusive to Nest, employs Nest Lab’s exclusive algorithm that takes into account current real-world weather conditions and “what Nest has learned and adapted about a particular user’s individual home through past performance,” to calculate the right time to turn on the heating or cooling system.

In its advertiser’s statement, Nest Labs said it was disappointed that NAD “disagreed with the company regarding consumer interpretation of some of the claim language, and that the voluminous amount of evidence submitted by Nest Labs supporting other claims” -- such as the addition of a common C wire isn’t required in 99 percent of Nest installations -- was considered inadequate substantiation for those claims. “While we strongly disagree, Nest Labs recognizes the mission of NAD and accordingly intends to modify its advertising taking into account NAD’s recommendations,” it said. A spokeswoman for Nest said that in accordance with NAD procedures, “We're unable to comment beyond the response included in their press release.”