Oracle plans to appeal a decision by an advertising industry watchdog that advertisements it ran in the Wall Street Journal promoting its Exadata Database Machines were misleading.
The advertisements were challenged by IBM, the main competitor targeted by Oracle in the advertisements. Oracle has discontinued the advertisements, pending the appeal.
The kerfuffle is another sign that Oracle is increasingly competing head-to-head with IBM in hardware platforms, following Oracle's acquisition of Sun Microsystems in January, 2010.
The full-page ads included the statement: "Giant European Retailer Moves Databases From IBM Power To Exadata Runs 20 Times Faster." The ads also offered a link to the Oracle.com/EuroRetailer Web site.
IBM challenged the ads in a complaint filed July 5 with the Advertising Self-Regulatory Council (ASRC) of the National Advertising Division (NAD), a business organization that establishes policies and procedures for advertising industry self-regulation. The system is administered by the Council of Better Business Bureaus.
IBM argued that the "20x faster" claim was misleading and implied that Oracle Exadata systems are faster than all of IBM's Power servers, according to a statement issued this week by the ASRC. Oracle said the advertisement represented a case study, rather than a broad claim, and that the target audience would understand the advertisement was based on the experience of the "giant European retailer" referenced in the ad.
In a NAD review an advertiser is "obligated to support all reasonable interpretations of its advertising claims, not just the message it intended to convey," said the ASRC statement.
"In this case, NAD concluded that while the advertiser may have intended to convey the message that in one case study a particular Exadata system was up to 20 times faster when performing two particular functions than a particular IBM Power system, Oracle’s general references to 'Exadata' and 'IBM Power,' along with the bold unqualified headline 'Exadata 20x Faster Replaces IBM Again,' conveyed a much broader message," the ASRC said.
"NAD determined that at least one reasonable interpretation of the challenged advertisement is that all – or a vast majority – of Exadata systems consistently perform 20 times faster in all or many respects than all – or a vast majority – of IBM Power systems. NAD found that the message was not supported by the evidence in the record, which consisted of one particular comparison of one consumer's specific IBM Power system to a specific Exadata System.
"NAD further determined that the disclosure provided on the advertiser's website was not sufficient to limit the broad message conveyed by the '20x Faster' claim. More importantly, NAD noted that even if Oracle’s website disclosure was acceptable – and had appeared clearly and conspicuously in the challenged advertisement – it would still be insufficient because an advertiser cannot use a disclosure to cure an otherwise false claim," the ASRC said.
Oracle has stopped running the ads and the NAD said the decision "to permanently discontinue the claims at issue was necessary and proper."
Oracle, according to the ASRC, was "disappointed with the NAD's decision in this matter, which it believes is unduly broad and will severely limit the ability to run truthful comparative advertising, not only for Oracle but for others in the commercial hardware and software industry." Oracle is appealing the NAD decision to the National Advertising Review Board.
Oracle did not provide additional comment to CRN on the issue.