Substantiation

What it is

Substantiation is the evidence held on file that supports a specific claim, kept in a form someone outside the company could check. The FTC's requirement is that an advertiser have a reasonable basis for an objective claim before the claim is disseminated, rather than assemble one after it is challenged. What counts as a reasonable basis varies with the type of claim, the product, the consequences of a false claim, the benefits of a truthful claim, the cost of developing the proof, and the amount of evidence experts in the field consider reasonable. The tighter standard of competent and reliable scientific evidence — tests conducted and evaluated objectively by qualified people — is not confined to health claims: the FTC's health products guidance applies it to claims about the efficacy or safety of health-related products, and the Green Guides say a reasonable basis for an environmental marketing claim often requires it. It is the form a reasonable basis takes for particular kinds of claim, not a standard every claim must meet.

Why it matters

Substantiation is the difference between asserting something and being able to show it. The practical test is not regulatory but commercial: if a customer's procurement or security team asked for the basis of a claim, could you produce it the same day? Knowledge Company treats substantiation as a property of the claim rather than of the document it happens to sit in. Companies that cannot usually discover it during a deal, at the point where the delay is most expensive.