In a cut-throat market, how do you grab the public's attention, promote your product, knock out your rivals, increase sales and still keep it legal, decent and honest? Good advertising can make or break a product, and with the commercial pressure on to win and keep market share, vendors and retailers are treading a fine line to keep within Advertising Standards Authority (ASA guidelines.
Compaq recently claimed that its systems ran 17 of the 20 largest stock exchanges in the world and enabled "more than 60 per cent of the world's interbank transactions". When questioned by the ASA, Compaq supplied evidence from the TSB Research Board that supported the first claim, but had no evidence of the second. The ASA upheld the five complaints received and the advert was pulled.
Following that case, the ASA rapped several mail-order resellers for advertising equipment that they did not have in stock and for quoting misleading prices.
The rules of ad-libbing
So how do you stay within the ASA's legal, decent and honest threshold? About 30 million adverts are published annually, but just 1,500 are investigated by the ASA, either because it receives a formal complaint or because it has its own concerns. The 1500 cases break down into four types: adverts which are illegal, adverts which cause offence, comparative advertising or 'knocking copy', and other competitor complaints.
The codes of advertising and promotion contain a long and exhaustive list of statutes and regulations affecting advertising and promotions. You must obey all of them to ensure that your adverts are lawful.
IT retailers are subject to the general laws of libel, negligence, contract and intellectual property (mainly copyright and trademarks). Libel and negligence mean that you cannot knowingly or recklessly include anything that is not true about an individual, your product, a competitor or your own company.
Contract law means that your adverts cannot break any agreements or licences you have, and under intellectual property law you must not infringe someone else's rights regarding the name, reputation or design of the business or its products. Intellectual property problems frequently arise in comparative advertising cases.
Hall of infamy
Advertisers also have to obey the normal rules on public decency, race, disability and religious discrimination. These are the complaints the ASA most often receives.
In 1998, 589 complaints made AG Barr's Irn Bru advert the most complained about advert of the year. It featured a cow with the slogan 'When I'm a burger, I want to be washed down with Irn Bru'. However, the ASA held that most of the public would not be "seriously offended" and that the complaints were not justified.
In the same year, 142 complaints against a Sunday Times advertisement were found to be justified. This featured a woman tied to a wooden cross dressed only in a leather bikini. The picture was an example of the work of the well-known photographer Terry O'Neill.
There was no intention to offend, the ASA said, but most people would not know that it was a photograph and could take offence on religious grounds. Even though the complaint was upheld, the ASA noted that if more space had been given to an explanation of the piece, there might have been no basis for offence.
The test that the ASA applies is: will the advert cause "serious or widespread offence". This is linked to the general laws on decency and discrimination. Under this heading, the question is not so much about the factual contents of the advert, but its aesthetic value.
So what does serious and widespread offence mean? In a recent Gossard campaign, a picture of a woman lying with her arms outstretched in long grass, wearing a translucent bra and briefs, was used under the slogan, 'Who said a woman can't get pleasure from something soft?' The ASA said this would not cause serious and widespread offence. Although some people had been offended, Gossard had the support of a study of young women who had no objections, and in the context of the advert, the slogan was deemed acceptable. Its latest ads follow a similar theme.
Comparative advertising has become a vital marketing tool for IT retailers. With a limited number of leading brand names and with most of the public unable to choose between different product specifications, price and product comparison are the main tools to win customers. The problem here is that you have to use someone else's trademark and explicitly, or by implication, knock their products.
Very broadly, it used to be the case that if someone else's trademark was used in your adverts, their rights were being infringed. This changed in 1995 when the Trademarks Act became law. Parliament's intention was quite clear - it would allow honest use of others' trademarks in comparative advertising. The difficulty, as always, is in the language used in the Act. It is not at all clear exactly what amounts to "honest practices in commercial matters".
In 1996, the courts confirmed that you could use someone else's trademark in your adverts and it would be for your competitor to show that your advertisement was not 'honest'.
More guidance was given in the 1997 dispute between telecoms giants Vodafone and Orange. Orange's main slogan was, 'On average, Orange users save £20 a month compared with equivalent Vodafone and Cellnet tariffs'. Cellnet took no action, but Vodafone sued for trademark infringement and malicious falsehood.
Under the trademark claim, the judge was realistic, commenting that the public is used to the ways of advertisers and expects a certain amount of hyperbole, particularly from advertisers while proclaiming the good points of one product and ignoring a rival's goods. In a test of honesty, he asked, would a "reasonable reader" say the advertisement is not honest upon receipt of all the facts (your competitor must prove this), and if you have been dishonest, have you taken unfair advantage or caused unfair harm to your competitor's trademark?
In other words, you must tell the truth on an objective basis. Orange's claim of £20 savings every month was supported by a study of similar, although not identical, tariffs between the two providers. Orange showed it had not been dishonest.
But that was only half the battle. Vodafone had argued the advert was not only false, but that its rival had lied with a malicious intent - the advert was calculated to cause damage to Vodafone, and Orange was reckless as to whether it was or wasn't true, or if it in fact knew it to be false. Considering this claim, the court asked whether a reasonable man would take the claim being made seriously. The more precise the claim, the more it is likely to be accepted. The more general the claim, the less so.
The court took a sensible, robust view. The public is sophisticated and recognises extravagant advertising when it sees it. Even so, you should only make specific product comparisons when you can properly verify your claims. The guidelines are clear: the comparisons must be on a fair like-for-like basis, they must not be significantly misleading on an objective basis, and they must be supported by detailed evidence and studies.
Don't score an own goal
Competitors also complain when you make claims that, although not drawing direct comparison with your rivals, give a misleading impression of your business and its products. While you will always want to show your business and its products in the best light, you must avoid leading your customers into making unfair comparisons with your competitors.
The Compaq advert is a case in point. Compaq failed to show that it enabled 60 per cent of the world's interbank transactions. The claim invited unfair comparison with competitors and could not be proven. The analogies with the Vodafone/Orange guidelines are clear.
So what consequences do you face by not complying with the ASA codes? Even before your advertisement is published, you are subject to control; magazine publishers will not publish anything that will harm the reputation of their titles. In reality, editors look for adverts that enhance the reputation of their publication wherever possible, and not those that merely provide a source of income.
The real pain starts once the ASA upholds a complaint against you. The ASA publishes decisions in its monthly reports. While this may be no more that an initial nip, if you fail to abide by ASA decisions, the pain builds up rapidly. Your reputation may suffer as the public becomes aware of the decision, the majority of media organisations deny future advertising space, and discounts are withheld. You may also find association membership withdrawn.
This system has proved effective. The purposes of advertising include increasing your goodwill and reputation. Ignoring ASA decisions can result in the exact opposite.
If you decide to continue to ignore a ruling of the ASA, there is a final sting in the tail of the sanctions. You can be referred to the director general of fair trading under the Control of Misleading Advertisement Regulations (1988).
The director general will ask you to promise to stick to the rules. If you don't, or if you fail to keep your promise, a court injunction may be granted against you, forcing you to stop. Fail to obey this, and you may be in contempt of court.
As an IT reseller considering a non-broadcast advertisement, you are entering a world of self-regulation. The rules are clear and are there to protect the public and competitors alike. As long as you produce material that is decent, honest and legal, the ASA will ignore you. If you are going to make factual claims or comparisons, make sure you have evidence to support them. If you don't, the ASA will give you an opportunity to correct the advertisement; but if you persist, the consequences can be serious.
From the point of view of using advertising to enhance the reputation and value of your business, the last thing you want to do is provoke the wrath of the ASA.
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