The Advertising Standards Authority (ASA) has published its 2012 Annual Report outlining its activities over the past year and its focus going forward.
At the heart of the report, the ASA sets out the ‘Big 5’ priorities on which it intends to focus over the coming year, all of which concern misleading advertising in one form or another. The focus on misleading advertising is not surprising given that approximately 70% of all the cases which the ASA dealt with in 2012 concerned misleading advertising.
The ‘Big 5’ concerns are:
1. Free trials
Many online businesses are picking up on the practice of luring customers into signing up to a (usually one month) free trial which, if the customer does not cancel, automatically becomes a monthly service.
ASA made it clear that they are alert to this practice, however, they did not say what action they are taking against it. Their recommendation is for consumers to read all small print carefully before handing over payment. Therefore, businesses should be weary when employing this type of sales technique and note that it is best practice to clearly bring your terms and conditions of sale to the buyer’s attention prior to them signing up to the free trial.
2. Daily deals
Daily deal websites are becoming more and more popular amongst the last-minute shopper. Websites and apps such as Groupon all offer last-minute deals to the impulsive shopper. However, ASA has reported that there are “widespread problems” such as:
• failing to conduct promotions fairly;
• not making clear significant terms and conditions;
• failing to provide evidence that offers were available; and
• making exaggerated savings claims.
ASA explains in its report that it has advised businesses on improving their internal processes and that it has received fewer complaints as a result. It would therefore be wise for businesses seeking to use daily deals as part of a marketing campaign to take note of the problems the ASA has highlighted above.
3. Misleading pricing
ASA has picked up on the selling of products using techniques such as ‘bait-pricing’, ‘drip-pricing’ and ‘partition pricing’ structures where subsequent charges are added to the original advertised price at later stages of the transaction.
An example they provide is the hotel that doesn’t include VAT in its room price. This is an obvious additional costs that is payable by all consumers.
Therefore, businesses are advised to be careful when using these methods as the ASA is making it clear that it will be monitoring them closely.
4. Misleading testimonials
ASA has requested that companies provide proof that the testimonials posted on their websites are genuine. Therefore, it is good practice to retain documentary evidence in relation to the source of any testimonials posted on your website.
Also considered misleading by ASA were the tweets of Wayne Rooney and Jack Wilshere:
The tweet from Wayne Rooney stated “My resolution – to start the year as a champion, and finish it as a champion…#makeitcount gonike.me/makeitcount”.
The tweet from Jack Wilshere stated “In 2012, I will come back for my club – and be ready for my country. #makeitcount.gonike.me/makeitcount”.
They held that these were misleading insofar as readers were misled into believing that the tweets were from the footballers and not sponsored tweets and that there was nothing obvious in the tweets to indicate that they were Nike marketing communications. ASA indicated that by using #ad in the post the tweets would not have breached the Committee of Advertising Practice (CAP) Code.
5. Misleading health claims
If you are marketing a health product the ASA has made it clear that you must have evidence to back up any health improvement claims that you suggest the product features.
Handle with care…
The use of some of these advertising techniques is clearly of interest to businesses and marketers looking to advertise in fresh and different ways. The key for businesses to be sure that any such advertising is fair and honest and does not mislead the customer. The ASA is clearly keeping a watchful eye on these 5 areas of concern and therefore it is prudent for businesses to err on the side of caution when implementing any such marketing tools.