Companies make crucial decisions on how they choose to advertise their product. With bright colours, bold fonts and reputable brand ambassadors, companies can persuade a society that their product is the best of the best. In advertising however there is a big difference between pushing the truth and producing deceptive claims.
Globally advertising is maintained by particular laws and codes based on where it is located and where the advertisements reach. For example the Advertising standards Authority is an independent regulator of adverts across all media in the UK, similarly the Federal Trade commission is dedicated to protecting Americas consumers across media. Although across the world there are differences in these codes, much remains very similar in ensuring accurate, respectable and honest advertising.
Animated video about the work of the Advertising Standards Authority.
Within Australia however, the way in which companies choose to advertise is governed by both codes of ethics and law. The Advertising Standards Bureau Website administers relevant codes and initiatives regarding advertising in Australia to prevent polarising society with deceptive content. The codes cover a plethora of media types and topics to ensure companies are well equipped to avoid legal ramifications.
The Australian Association of National Advertisers (AANA) is a ‘national body’ that commits itself to ‘inspire and promote responsible, innovative and respected marketing’. The AANA does this through developing a Code of Ethics to ensure that ‘advertisements and other forms of marketing communications are legal, decent, honest and truthful.’.
The AANA Code of ethics Section 1.2 states
'Advertising or Marketing Communication shall not be misleading or deceptive or be likely to mislead or deceive.’
Companies in breach of these codes can be held accountable when a complaint is upheld. According to the Codes, Practice notes and Guidelines, a breach will cause the advertiser to remove or amend the offending advertisement and if the modification does not occur within 5 business days the case can be referred to the applicable government agency and will be posted on the Advertising Standards Bureau Website.
The Australian Competition and Consumer Commission plays a crucial role in Australia’s legal setting, as it strives to promote understanding of the law by actively enforcing the Competition and Consumer Act 2010 more commonly referred to as Australian Consumer Law (ACL).
Under Section 18 in the ACL states ‘A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.’
Guessing facts, omitting relevant information, making ambiguous or contradictory statements or making assurances that cannot be kept, are all ways in which companies can get tangled in the legal repercussions of misleading advertising and are within breach of Section 18.
According to the ACCC the most common types of false or misleading advertisements are:
Fine print and qualifications: the fine print of a product must be easily legible and must not contradict the overall message of the advertisement.
Comparative advertising: If a company chooses to advertise its product based on a comparison to another product based on price, quality, range or volume, it must be entirely truthful and accurate.
Bait Advertising: It is not misleading if the business is upfront in a highly visible, clear and specific manner about the particular product ‘on sale’ being in short supply or on sale for a limited time.
Environmental ‘green’ claims: They may include statements about environmental sustainability, recycling, energy and water efficiency or impact on animals and the natural environment, for example 'green', 'environmentally safe' or 'fully recycled'. Businesses making these claims must be able to substantiate them.
With all the information of what not to do, how to accurately make claims and the possible repercussions of creating advertisements that are misleading and deceptive, it’s quite possible to think that all companies would just stick to the truth.
Many companies though have been caught out for marketing products with claims like ‘guaranteed results’ or ‘scientifically proven’. Its seen to cost millions for companies that meddle between the line of honesty and dishonest.
In 2010 ‘Dannon’ was hit with a $45 million dollar settlement due to flaunting its Activia yoghurt products as ‘clinically’ and ‘scientifically’ proven to regulate digestion. The company even launched an advertisements starring Jamie Lee Curtis, who called the yogurt ‘tasty’. Since to 2006 activia was sold on consumers shelves at a 30% premium over other brands due to the claim of special bacterial ingredients.
Dannon's troubles first began two years ago after Trish Wiener, a Los Angeles caterer, filed a federal law suit, challenging the companies claims were false and deceived the public into buying yogurt that was more overpriced, but no enhanced benefits than the others on the shelf.
"Deceptive advertising has enabled Dannon to sell hundreds of millions of dollars’ worth of ordinary yogurt at inflated prices to responsible, health-conscious consumers," Wiener's attorney, Timothy Blood, says.
A judge in Cleveland then called that Dannon must pay consumers up to $45 million in damages under the terms of a class action settlement, reached in federal court and to remove and change the health claims for the brand.
Other major companies like Volts Wagon, Red Bull, Ribena, Kellogg, New Balance and Splenda have all been tangled in making unfair profits from misleading advertising.
After some leisurely research I found that deceiving the public isn’t even a new practice!
In 1932 an advertisement for Listerine mouthwash from Lambert Pharmaceutical Co. claimed that it is a preventive and remedy for colds and sore throats. In 1976 the federal trade commission ruled that the claims were misleading and that Listerine had no value at preventing or alleviating the symptoms of sore throats.
Lambert was ordered to stop making the claims, and to include in the next $10.2 million dollars' of Listerine ads specific mention that "contrary to prior advertising, Listerine will not help prevent colds or sore throats or lessen their severity.
This brings to question, why companies still choose to flaunt their products with misleading and false claims with the risk of damaging both reputation of the brand and the losing valuable profit to rectify the issues.
So if misleading advertisements isn’t a new concept, why are companies putting their business on the line and why polarise society at the same time? It’s really not cool.
Until next time,
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