Marketing Matters: Review of August 2024

Welcome to this month's edition of Marketing Matters, where we look at advertising and marketing (A&M) trends in the retail and consumer sector.

We will be looking at:

• Some of the key takeaways for A&M departments following August's ASA rulings.
• Other top ASA stories.
• CMA news for the same period.
  
  

ASA rulings – key takeaways for your A&M departments

In August, the ASA handed down 13 rulings out of which one was not upheld, and one was upheld in part. Of these 13 rulings, we've examined some which caught our eye, and we think you and your A&M departments should be aware of.

Misleading pricing

Eight of the ASA's rulings related to misleading claims. We've picked out two which involved misleading pricing.

A website for a property management company published an advert stating “7 WAYS YOU’LL SAVE WITH US. SAVE ON AVERAGE 56% ON ENERGY BILLS". It also claimed, "FREE SUPERFAST WIFI, FREE WORK FROM HOME AREAS."

On the first claim, the ASA considered that consumers would understand the claim to mean that they would save 56% on their energy costs against the average comparable energy bill by renting with the property management company which could not be substantiated.

On the use of the word "FREE", the ASA stressed that a product should not be advertised as 'free' if it is an element included in a package price or rental payments. This is because consumers are likely to perceive the 'free' element as an additional benefit (even though it is technically not free) which might influence their purchasing decision. Here, Wi-Fi and some work-from-home areas were included in the rental costs so were not free. Other higher quality 'WFH' options were also available but for a hiring cost. 

Meanwhile, a laser hair removal company claimed “UP TO 70% OFF LASER HAIR REMOVAL" in its Spring sale on Instagram and a similar offer with several products with a “was” price and a current price on its website. The ASA ruled that these were misleading as they understood that only a limited number of treatments were available with the discount of 70% off and the "was" prices were false as the treatments had never been sold at the higher price based off historical information. Consumers would expect a genuine discount from RRP but, instead, were met with a limited range of discounted treatments and ingenuine savings compared to usual selling prices.

Social responsibility

A sports fashion retailer had a ruling partially upheld against four of their Nike Air Max clothing adverts. The adverts depicted motorcycle and quad bike riders wearing the clothing and footwear, while performing various stunts in an urban environment. Only one of the adverts stated: “STUNTS PERFORMED BY PROFESSIONALS - DO NOT TRY AT HOME”. All riders were depicted wearing helmets and the ad photoshoots took place within a warehouse space and closed roads.

The ASA received 60 complaints, including from the British Motorcyclists Federation regarding illegal and irresponsible road usage and the promotion of athletic wear rather than protective equipment.

The latter complaints were not upheld as the Highway Code only prescribes that riders wear a helmet when operating a motorcycle and this is only a recommendation for quad bike users. Therefore, although the adverts did not portray any additional protective cover, this is not a legal requirement. However, the ASA did rule that the marketing communications promoted unsafe and irresponsible driving because the closed roads were indistinguishable from open public roads and the motorcycles did not display number plates. Meanwhile, the inclusion of the disclaimer that the stunts were performed by professionals was insufficient to guard against the potential for the actions being emulated from the other three adverts which were not acceptable for a public road. The ASA concluded that three of the ads should not feature again because they condoned unsafe driving practises.

Other claims worth noting

A British entrepreneur and 'Dragon' on the series 'Dragon's Den' has been involved in two misleading rulings this month. The well-known figure was featured in three adverts; one for a healthcare company which he had invested in and two for a nutritional supplements company of which he is a director.

Both companies defended their Ads to the ASA, claiming that when a celebrity appears in advertising then the average consumer would understand that a commercial relationship existed between the individual and the brand.

The ASA upheld that marketing communications should not purposefully mislead consumers by omitting important information which is needed to make informed decisions. The adverts purported to be independent testimonials made in the entrepreneurs' capacity as a public figure and consumer, comparable to how a consumer might review a product. However, the individual had a financial incentive for the companies to perform well so the exact nature of this relationship needed to be disclosed.

Takeaways

The key takeaways from the ASA rulings this month are:

• Stop accidents before they happen: Always ensure disclaimers are clear and consistent across all adverts, especially when depicting or promoting risky behaviour.

• Clarity in pricing is key: everyone hates it when something is advertised as 'free', but it turns out not to be, especially the ASA. We recommend avoiding use of the word 'free' for bundled services and transparency in your price packages.

• Honesty pays: If you are using a public figure to promote your product or service, clearly disclose any financial relationships to maintain consumer trust in your brand.
  

Top ASA stories last month

Speed Checks: ASA advice on fast broadband and telecoms claims

The ASA have released guidance on speed claims for broadband and telecommunications suppliers:

• Advertisers need to be cautious when claiming by numbers about their streaming speed as this must be demonstratable for at least 50% of the customer base between 8pm and 10pm and even then, this should be described as 'average' speed.

• If the speed is geographically contained or hasn't been measured nationally, this should also be specified so that customers in the South West do not expect the estimated speed figures for the North East.

• If there are any barriers to consumers achieving a certain speed or a significant proportion of consumers would receive maximum speeds lower than the headline speed, these circumstances and disclaimers should be clearly stated in easily understood terms.

• Claims of 'superfast' speed will also be monitored in line with Ofcom's ruling that 'superfast' means equal to or greater than 30 Mbps.

Therefore, broadband and telecommunications providers should bear this guidance in mind before making enticing speed claims in adverts to consumers. Read more.

Game over: hitting pause on misleading gameplay in videogame Ads

Videogame adverts using footage of gameplay which does not feature in the game are being targeted by the ASA for misleading gamers. Graphics must accurately reflect the gameplay, in-play options, speed of combat, etc with advertisers unable to avoid challenge with disclaimers that “Not all images represent actual gameplay”. This is because these warnings can be insufficient in light of players having to engage with a certain amount of content in order to unlock the gameplay featured in the ad. Further guidance is available in the ASA's strategy guide.

Filtering out unidentified Instagram ads

A new Instagram setting allows posts to be jointly published by both influencers and a brand account simultaneously. This creates seamless content which reaches even greater audiences for brands but does blur the line between editorial and advertising. As such, the ASA handed down a ruling against an active wear company and its creator as posts shared across both accounts were not obviously identifiable as an ad. The onus of signposting an advert with '#ad' is on the influencer and brand and this proper disclosure avoids consumers being misled by an influencer with a commercial interest in the brand's success. With consumers scrolling through a vast amount of content, clear labelling is key in allowing consumers to easily decipher advertising material. Find out more on the ASA's approach to joint publishing on Instagram.

CMA activity in August

Formula for fairness: CMA challenges sky-high baby formula prices

The CMA are seeking to tackle historically high prices for baby formula amid concerns that strict advertising rules are softening competition on price. The average product price has risen by 25% over a two-year period.

Baby formula suppliers are restricted from promoting price reductions with concerns around discounts discouraging breastfeeding. However, parents are missing out on hundreds of pounds of potential savings which would be available with the right information on cheaper formulas. 

A CMA investigation was launched earlier this year with the watchdog now drawing up recommendations for the government over regulatory reform. The baby formula market is dominated by a few large brands and commentators have expressed their concern, particularly amid the cost-of-living crisis, that this lack of price competition is creating a crisis of infant hunger especially for low-income families. Read the CMA's findings.