How To Balance Advertising Creativity with Compliance

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How To Balance Advertising Creativity with Compliance

Australia has a notoriously regulated advertising and marketing environment. Businesses that are found to have engaged in misleading or deceptive conduct in breach of the Australian Consumer Law can face hefty six-figure penalties and significant reputational harm. In some cases, there may even be criminal consequences for those found not to be compliant.

It’s difficult for businesses to maintain the balance between delivering catchy, engaging, and relevant campaigns while keeping compliant. You don’t want to bore your customers with legal jargon every time you deliver messaging to them, but you also want to stay on the right side of the law.

How do you make sure you have ticked the legal boxes? Follow Level Up Legal’s top five tips to achieve advertising and marketing compliance.

1. Don’t Rely on The Fine Print to Save You

If your headline or key copy is misleading or inaccurate, no amount of explaining in the fine print will help. Disclaimers are helpful to add further detail or information but shouldn’t be used to correct a misleading message.

Let’s say you are running a promotion at your shoe store selling two shoes for the price of one, for example. You offer to give away the cheaper pair of the two for free. The headline of your advert could say: “Every customer gets two shoes for the price of one”. Your disclaimer states: “Terms and conditions apply. We’re giving the cheaper pair of the two away for free.” No problems there. 

However, if there’s a catch to the promotion, such as it applies only to shoes that are over $100, the headline you have used is likely to be construed as misleading. The advert will be interpreted as stating that every customer will get two shoes for the price of one, even if you add a disclaimer defining the price points. 

If you need to qualify your ad, make sure the qualifying statements are unambiguous and prominent so that customers know what they’re getting without having to read the fine print.

2. Testimonials, Reviews & Compliance 

All reviews and testimonials relating to your business’s products or services must be genuine. But even an honest review or testimonial may be misleading, leaving your business liable. 

For example, let’s say a pleased customer posts on your social media page that she particularly loves your delicious, handcrafted chocolate containing no sugar. If your chocolate does, in fact, have sugar, leaving the inaccurate review uncorrected on the platform could land you in hot water. You should either delete the review or respond to it, correcting the statement.

You can also breach the Australian Consumer Law if you selectively remove or edit reviews, particularly negative reviews, and only post the positive ones.

Lastly, don’t use any marketing tactics to influence your customers to write only positive reviews. It’s OK to offer an incentive to customers to share their honest feedback but don’t offer them a free night at your hotel only if they agree to write a glowing review of their stay.

3. Best Practice of #Sponsored Advertising

Influencer marketing gives brands a powerful way to tap into the dedicated social following a particular influencer has. The right influencer’s endorsement of your goods and services acts as a kind of social proof to your brand’s potential customers. 

It’s a powerful marketing tool, but because it can easily appear organic or genuine, it is often not apparent to consumers that the influencer has accepted payment of some kind in exchange for their promotion of the products.

The Australian Association of National Advertisers (AANA) Code of Ethics requires brands to ensure that the influencers and online content creators they work with clearly disclose to their audience when the content they’ve posted is sponsored. Businesses are also required to be transparent in disclosing compensation given in exchange for reviews. Failure to do so is likely to be misleading and deceptive conduct and in breach of the Australian Consumer Law.

So, does this mean that you have to ensure that influencers use hashtags #Ad or #Sponsored on every piece of sponsored content? The short answer is no. While it is best practice to use these particular hashtags for commercial advertising, the ACCC, Australia’s consumer watchdog, and the AANA give marketers some flexibility to ensure marketing material is clearly commercial in nature. So long as it is clear to consumers that the content is sponsored. 

However, the AANA Practice Code states expressly that labels such as “#sp, Spon, gifted, Affiliate, Collab, thanks to…” or merely mentioning the brand name may not be sufficient to distinguish the post as advertising clearly.

Another thing to remember is that even if you disclose a sponsored post, the influencer still has to be truthful. So, if Kim Kardashian is a dedicated vegetarian that never has, and will never, be sampling your organic lamb chops, it’s best to find another Influencer to rave about how delicious they are. 

4. How to Run a Compliant Sale

We all love a good bargain, and sales and discounts can create a sense of urgency for customers. There is no problem with this, as long as you make sure that you aren’t creating a false sense of urgency, as this can be a breach of the Australian Consumer Law. 

An example of this would be using bait advertising, i.e., offering items for sale at low prices to attract consumers to a business when the goods or services you are advertising for sale are not available in reasonable quantities and for a reasonable period. If you want to create a promotion around limited stock, it’s essential to clarify that the sale is for restricted stock and a limited period, such as “For Today Only” deals.

Another no-no is using was/now pricing that isn’t entirely truthful. Let’s say you have an item of clothing with a recommended retail price of $100. You have never actually sold the garment at your store for that price as it’s a bit too expensive for your customers, and you have only ever sold the item for $85. When your seasonal sale starts, it would be misleading to advertise that item as having been reduced from $100, e.g., “was $100/now $50,” as your customers will mistakenly believe they save $50 rather than $35.

Finally, remember not to create a false sense of urgency – such as running “For Today Only” promotions for a more extended period.

5. When an Ad is Both True & Misleading

The fundamental principle of the Australian Consumer Law for marketers is that advertising should not be misleading or deceptive to consumers. But content creators need to understand that an advertisement may be literally true, but still be misleading and deceptive.

For example, let’s say you publish an advertisement stating that your organic blueberry shampoo costs $50 and your competitor Blush Beauty Supplies sells organic blueberry shampoo for $80. This statement may be correct, but if Blush Beauty’s product is 100ml and yours is 50ml, the advertisement is likely to be misleading. It could land you in trouble with customers and the consumer watchdog.

Another example would be to advertise your range of TVs as “starting from $100”. Suppose you have an obsolete TV that you sell for $100, but every other TV in your store is priced at $2 000 or higher. In that case, your advertisement will be both correct and likely to mislead consumers into thinking that you have a range of low-priced televisions available.

The word “may” or “could” can make an otherwise false statement correct but won’t always save you from being misleading. Saying that customers may or could save a lot of money by switching to your product may be technically accurate as it’s a possibility. Still, it will be misleading if the likelihood of that happening for most customers is low.

How Can We Help You?

Level Up Legal provides a unique and cost-effective advertising review product that assures marketing teams of consistency, fast turnaround times, and product knowledge while providing the legal team and business with fixed fee certainty and the security of having dedicated support from an experienced team of lawyers. 

We will work closely with your marketing team to help them produce creative, compelling and compliant marketing collateral. Contact Level Up Legal to discuss the next steps. 

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