Do you consider this freedom of speech?
If you're asking me if he would have been perfectly within his rights to allow the ad to run like that the answer is yes. Just as the group who complained about the ad were well within their rights to do so. They voiced a complaint and he agreed and retracted. I don't see a Freedom of Speech issue here.
Show me the phrase where the 1st demands that the speech be intelligent or non-offensive to be protected.