Marketing Matters: Review of May 2024

Welcome to this month's edition of our Marketing Matters newsletter, 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 the ASA's rulings in May
• What else the ASA got up to last month
• CMA news for the same period

ASA rulings – key takeaways for your A&M departments

In May, the ASA handed down 17 rulings out of which two were not upheld.

Misleading advertising

As is often the case, the majority of this month's 17 rulings were held to be misleading by the regulator. Below we take a look at a couple of these.

A fashion retailer got into trouble because of 15 tweets it posted during the Black Friday sales period last year, which offered discounts on certain products. The ASA's detailed ruling sets out several issues with the tweets; however, to highlight a few:

• there was a lack of obvious qualification to some of the statements being made – with statements such as "X% off everything" or "every single thing" – not being strictly correct. Where there had been attempts to qualify , this was done by an asterisk and smaller text which, as we discussed in last month's edition, is not necessarily sufficient to stay on the right side of the CAP Code; and
• the applicable promotion period was not always clear and there were issues around the pricing of discounts, with consumers not expecting to receive a discount one day, only to find that the next day there were even better discounts available for the same items.

Another ruling concerned a hotel chain which was criticised for its advert claiming "Rooms From Only £35 Per Night" at its Edinburgh branches, where the complainant could not locate any rooms in the city available at this price. The ASA's ruling determined that this claim implied a significant proportion of rooms would be available at this price. When this was investigated, only a small percentage of site nights had rooms on offer for £35 so the advert had to be removed.

Pricing claims

Issues relating to correct pricing increased this month with three rulings finding that prices were not being handled in accordance with advertising rules.

A storage company's website included the text: "Get 50% off your storage for up to 8 weeks" and included quotes for a 160 square foot storage unit. The website went on to qualify “The prices you see above are the prices you pay, No Hidden Fees”. The ASA deemed this claim to mean the price quoted would be the amount due for the entire duration of the use of the storage unit with no additional costs incurred. Notwithstanding their terms and conditions stating they may alter their fees at any time with written notice to the customer, there was nothing in the advert itself which disclosed the fees could increase at any time. The information on the website was therefore found to be insufficient to counter the impression given by the "No Hidden Fees" claim made in the advert.

Unsubstantiated claims

Only four rulings related to the issue of substantiation in May, a significant drop from eight claims the previous month. We give an example of one of these rulings below.

An interesting situation arose following ads being posted on the website, Instagram and X accounts of a bathroom retailer which had previously entered administration. The company's business and assets had been acquired by another company by way of a pre-pack purchase deal. The ads in question made various claims about the longevity of the company (e.g. that it had been founded in 2001) and its Trustpilot reviews.

The arguments centred around whether or not it was fair to lead consumers to believe that the company had continued business uninterrupted, notwithstanding the period of administration. The purchaser argued that the company had been bought as a going concern and therefore, it had continued uninterrupted. The ASA disagreed, finding that the fact that some of the pre-administration orders it had received had not been fulfilled and, as such, it could not be deemed to have continued trading. The ads were therefore found to be in breach of the CAP Code.

Other claims worth noting

A couple of Instagram reels and four TikTok posts on an influencer account contained ads for a fashion retailer. The social media content had the influencer comment on and wearing various clothing items from the brand; however, it was not clear from the posts that they were actually ads.

The influencer was (coincidentally) the founder of the brand and, as such, an employee of the company, meaning that there was a clear contractual relationship between the two. As such, there was an obligation to ensure that any advertisements were recognisable as marketing communications under advertising rules. Although there were hints that a commercial relationship existed, according to the ASA these were not made clear enough to consumers.

A supplier of wines and spirits fell foul of the rules around promotions when they referenced a competition to win a pizza oven on a neck label on one of their wines. The label contained a QR code which was said to take consumers to the webpage containing the full terms and conditions of the competition. Unfortunately, this was not enough.

As we have seen in previous editions of this newsletter, significant conditions and information are key when it comes to promotions. Here, the issue was the fact that consumers would need to register for the competition within 14 days of purchasing their bottle of wine (or, in fact, 14 days within the sale of the final promotional bottle – but participants had no way of knowing when that might be!) and this was not made clear on the label. The company argued there was insufficient space on the label to include this information, but the ASA didn't think this was a good enough excuse.

Takeaways

The key takeaways from the ASA rulings this month are:

• Do not go overboard with your offers – If there really is 20% off EVERYTHING, that's great. But if the offer does not apply to even a single product, your A&M team will need to make that clear to consumers. Otherwise, their ad will be misleading.

• Price check – If you say there are no hidden fees, make sure that is the case, both in reality and in your terms and conditions. This will be particularly relevant if a service if being offered over a longer period of time, where fees may see an uplift along the way.

• Be clear on the #ad – If you are an influencer or if you employ influencers to promote your business, it's important to make sure that any posts that could be perceived as ads for your brand are identifiable as such. Using a clear and prominent identifier such as “#ad” is a good place to start.

Top ASA stories last month

Spotlight on podcasts

On 16 May, the ASA and CAP published new research and guidance on how to make sure that in-podcast advertising is identifiable as such when read out by presenters or otherwise featured within a podcast. Given the rise of the podcast, it is important for podcasters to understand that the non-broadcast advertising rules apply to them as well.

The research revealed that consumers preferred to have clear warnings at the beginning of an ad, using statements like "paid-for advertisement" or "sponsored" to ensure they could easily identify the content as an advert. Playing music at the beginning of an ad was another preferred method of identification.

The guidance will come into effect from 16 August 2024 and it will be important for businesses advertising on podcasts to ensure that their A&M professionals and associated podcasters are away of this guidance.

Alcohol alternatives – new guidance

The ASA and CAP's  new rules relating to non-alcoholic product advertising have now come into force. These specifically relate to the promotion of beverages with an ABV at or below 0.5% marketed as non-alcoholic alternatives.

An advert will be subject to the new rules: “…if it is likely to be understood by the audience as an ad specifically for an alternative to alcohol, whether in general or as a non-alcoholic version of a particular alcoholic drink…”. However, advertisers should be cautious when promoting alcoholic products alongside non-alcoholic alternatives and should specify a product is alcohol free if it depicts the product to be safe for consumers who are unwilling or unable to drink alcohol.

Mental Health matters in adverts

In honour of Mental Health Awareness Week (13 – 19 May), the ASA issued their guidance on addressing mental health in adverts. Key focus areas included heightened awareness to potential detrimental impact, harm or offence caused by adverts, responsibility owed to vulnerable consumers, and avoiding triggering or traumatic imagery which may invoke ideas of suicide, harm or irresponsible behaviour.

Marketers should be especially mindful of their audience, particularly where children's mental health could be negatively influenced by their adverts.

CMA activity in May

Grocery stores: accurate prices, please!

The CMA has been looking into whether in-store pricing at grocery retailers is clear, accurate and matched the price people were charged at the till. The failure to provide clear and accurate pricing information is a breach of consumer law. During some of its on-site inspections, the CMA found that some products had either inaccurate prices, or no prices at all.

The review was conducted at 139 grocery stores across England and Wales, with a focus on specific products, such as fresh fruit and vegetables and discounted goods. Most of the issues were found at independent food stores and symbol convenience stores (which are small, independent retailers that are run under a symbol brand name). 60% of the errors resulted in the payment of higher prices at the till.

A CMA spokesperson noted the importance of getting the price right, particularly now, at a time where people are looking to save money where they can.

CMA paws over soaring vet fees

As discussed in a previous edition of Marketing Matters, the CMA is looking into the veterinary market amid claims that pet owners are overpaying for veterinary services and treatments. A lack of pricing transparency has resulted in the cost of pet services climbing by around 50% since 2015 (at a rate higher than the overall rate of inflation) with growing concerns that consumers are not informed of the cost of treatment before agreeing to it.

The British Veterinary Association has agreed the regulation of the sector was "woefully out of date", whilst 56,000 respondents shared their thoughts on vet pricing lists last year in a CMA review. The CMA is now launching a formal investigation.

The competition body stressed that larger corporate groups are acquiring smaller vet practises but retaining their independent branding which gives the illusion of consumer choice. With close to 16 million UK households having at least one pet, the CMA are focussed on addressing pet owners' concerns.