Magazine article Marketing

ARE PRICE-LED ADS HARMFUL?: Regulators Are Getting Tough on Breaches of Price Comparison Rules

Magazine article Marketing

ARE PRICE-LED ADS HARMFUL?: Regulators Are Getting Tough on Breaches of Price Comparison Rules

Article excerpt

Can this prevent price-led ads doing damage to brand values, asks Robert Gray.

Marketers using price-led advertising could be facing a regulatory crackdown. The Committee of Advertising Practice (CAP) has issued guidelines to retailers that make use of com-parisons in non-broadcast ads. With several high-profile campaigns under scrutiny from regulators, what can be done to keep advertisers in line?

It is hard to think of any sphere of marketing activity more bruising or keenly scrutinised by competitors than price-led advertising. When an advertiser compares its prices with those of a rival, the gloves come off; but the big concern is that any price claims made by advertisers should be fair and not in any way misleading.

'We've noticed over the past few years that there are more price comparisons in ads, which produces the potential for confusion,' says Guy Parker, secretary of the CAP.

The CAP has produced a number of guidance notes on pricing in advertising in general and for specific sectors, the latest being 'A Help Note on Retailers' Price Comparisons'.

'This is not supposed to curtail price comparisons in advertising,' explains Parker. ' What we want to do is nip in the bud any advertising that might unintentionally mislead. Of course, there will still be irresponsible marketers who will deliberately mislead or confuse. This help note is for the responsible majority.'

Of the 13,000 to 14,000 complaints received by the Advertising Standards Authority (ASA) annually, only a few hundred relate to price comparison advertising.

Many of these are brought against advertisers by their competitors, rather than the public. In the most fiercely contested markets, it seems as though companies study the price-related ads of their competitors with magnifying glasses and are swift to fire off complaints to the ASA if they discover even the smallest suspected code infractions.

According to the ASA, during the past year it has had to formally investigate eight Homebase complaints about B&Q ads and five B&Q complaints about Homebase ads.

'It's always tempting if one advertiser feels they are hard done by to put in a whole load of complaints. I don't think there's any great mileage in doing that,' says B&Q marketing director David Roth.

It is fair to say that the majority of complainants are not being vexatious or making mischief, while most of those that have complaints against them upheld did not deliberately set out to break the rules. Hence the CAP's decision to draw attention to retail price comparison advertising best practice through its help note.

Among the key points covered by the note are that marketers should: hold documentary evidence to back up all comparative claims; ensure the basis of any claim is clear; state where and when comparative surveys were carried out; make comparisons only with retailers in the same locality - unless it makes no difference to compare prices with retailers in other localities; and not exaggerate the length of time for which their prices have been lower.

Moreover, marketers in particularly price-sensitive sectors should use media with a short 'shelf-life' and avoid media with long copy deadlines so as not to be caught out by changing circumstances.

Heated rivalries

In January, a complaint brought against electrical retailer Comet by rival Dixons was upheld by the ASA. Dixons had objected to national press ads by Comet headlined 'It's official - we're the cheapest electrical retailer'.

The ASA ruled that the ads exaggerated the findings of a survey carried out by KPMG, as it was based on only 20 products. The copy should either have been more specific about which products were cheaper, suggested the ASA, or a more extensive survey should have been used.

Earlier this month, Safeway saw two out of three points of a complaint brought against it by Tesco upheld with regard to price deals. …

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