- Todd Wasserman

The increasingly litigious battle between Coca-Cola and PepsiCo over their energy drinks took another turn today as the ad industry’s governing body referred a dispute between the two to the FTC.

The National Advertising Division of the Council of Better Business Bureaus (NAD) looked into ad claims made by Coca-Cola’s Powerade Zero, which the company compared in ads to PepsiCo’s Gatorade. NAD recommended that Coke’s ad, which compared its zero-calorie product to the full-calorie Gatorade, be modified to reflect the fact that a drink with no calories does not provide an energy boost. Coke declined and the NAD referred the matter to the FTC.

Pepsi first called on NAD in 2006 when Coke’s product, then a 10-calorie drink called Powerade Option, took on the full-calorie Gatorade in advertising and marketing materials.

NAD recommended at the time that any Powerade Option advertising should clearly indicate that the product had fewer carbohydrates and thus lacked the energy-replacement aspect of Gatorade’s beverage. In a press release from NAD, the organization noted that it was “particularly concerned” about a Powerade Option ad that ran that year showing an Amish wagon race. The number 10 was superimposed over the winning wagon while the loser got 50. The numbers were meant to stand for “carbohydrate energy,” i.e. calories.

Upon reviewing the ad, NAD concluded that it was designed to make consumers think that the 10-calorie drink provided more energy than the 50-calorie drink even though the ad’s numbers referred to bales of hay in the wagons. Coke told NAD that the ad only ran a few times and had been discontinued. Subsequent ads included the voiceover  that explained “calories provide energy, but how much energy do you need?” which satisfied NAD.

In late 2008, though, Coke discontinued Powerade Option and introduced Powerade Zero. New ads for that product push the same idea as the Amish wagon spot, NAD contends. In particular, NAD cited an ad called “Search + Rescue,” that shows two climbers hanging on ropes attached to a mountain goat. When one drinks the higher-calorie Gatorade, his rope snaps while the other remains safe. Ammirati, New York, handles Powerade’s advertising.

“The company wasn’t disclosing the material differences and one is there’s a carbohydrate content to Gatorade that Powerade doesn’t have,” said Linda Bean, a NAD rep. “That needs to be disclosed that you’re comparing products.”

In response, a Powerade rep said: "We have a high regard for the NAD and respect it's decision. We value the NAD's role as a self-regulatory organization, however, we disagree with its finding in this case."

Meanwhile, a Gatorade rep added, "As a participant in the NAD process which we highly value, our approach is to follow the NAD guidelines for these kinds of situations and withhold any comment.  The NAD action speaks for itself."

NAD’s decision comes after Gatorade filed a lawsuit against Powerade charging that the brand’s ION4 sports drink made false claims in ads when it stated Powerade is an “upgrade” over Gatorade. Owner PepsiCo charges that there’s no scientific proof for Powerade’s claims.