ACCC eyes adland

Last month our consumer and competition watchdog, the ACCC, put the advertising industry on notice that it will be more aggressive in pursuing misleading ads.

In her speech at the Australian Association of National Advertisers Annual Congress (for a full copy, go here), ACCC commissioner Sarah Court flagged three big ticket items:

• fine print qualifications and disclaimers;
• credence claims; and
• the use of testimonials.

Here is a quick overview of the watch-outs:

Fine print disclaimers. Here the concern is where disclaimers in fine-print are used to qualify large headlines, particularly where the product or service being advertised is complex or detailed. The Optus ‘Think Bigger’ campaign in 2010 (see image) got into hot water for this very issue. Customers were told that when they signed up to a ‘Think Bigger’ plan, their data usage would consist of a specific peak and off-peak allowance. The Federal Court found that the short small-print disclaimer: ‘Speed limited once peak data exceeded’, did not give customers an accurate description of how the plan actually operated, that is, that once a customer exhausted their peak allowance, their service would be curbed to a humble 64kpbs, during peak and off-peak usage. The court fined Optus $5.26 million in the highest pecuniary penalty imposed so far under the Australian Consumer Law. Optus is now appealing the penalty.

Credence claims. Credence or credibility claims can offer a competitive advantage and are powerful in influencing consumer choices, but the ACCC has warned against making false or exaggerated claims in this regard, cracking down on the advertising strategy of late, particularly in relation to claims of origin or product description in relation to food. Last year the ACCC took action against a poultry company which claimed their chickens were “free to roam” in in-store displays and on delivery trucks. The ACCC successfully argued that this was misleading, given that the chickens were in fact reared indoors and restricted in their ability to roam.

Use of testimonials. Testimonials, like credence claims, are used to gain consumer trust, and as a result, must always be accurate and truthful. In 2008, Coca-Cola published an ad featuring Kerry Armstrong “busting” myths that the drink made people fat, rotted teeth and was packed with caffeine. After negotiations with the ACCC, the soft drink giant published corrective ads to qualify the sweeping claims made.

 How to avoid moving into the spotlight for all the wrong reasons:

• Make sure you consider the overall impression of the ad to consumers and watch out for headlines that require qualification by way of disclaimer.
• Ensure you maintain all records of information that can be used to substantiate any claims you make about a product/service in your ads.
• Where unsure, always seek legal advice, as the eyes of your consumers may not be the only ones watching…