Canada: Marketing & Advertising - Dan Smith - Thinkhouse September 2016

Last Updated: November 8 2016
Article by Michael Luckman and Dan Smith

Marketing and advertising is an ever more regulated area which is increasing compliance risk and exposure for businesses. Dan Smith takes us through some of the best approaches to marketing and how to protect against possible risks.

This ThinkHouse session is also available as a podcast.

Transcript

Michael Luckman: We are talking today to Dan Smith, head of our Advertising and Marketing team about misleading advertising, particularly in the context of digital media and sales practices.

Dan, misleading advertising is quite a broad church. What types of misleading advertising are you seeing out there?

Dan Smith: Well, don't mislead, that seems quite simple at heart and that is the basis of advertising law, but different sales practices emerge over time, digital media presents new opportunities and marketers are quite sophisticated.

So what we're seeing is those sort of traditional concepts of what is and what is not misleading. The consumer or trader being able to identify advertising as advertising. Those principles are being applied in new circumstances and we've seen quite a lot of regulatory activity around things like was/now pricing offers, price promotions, multi-buys.

In digital media we've seen a lot of activity around native advertising, around influence and marketing, the adoption of user generated content. All of these fake reviews, all of these have been regulatory hot topics over the past year or so. 

Michael: As a consumer, obviously I see quite a lot of was X now Y pricing, what issues are coming up there?

Dan: Well, the reasons the regulators are concerned about was/now pricing is that works on consumers, they respond to it and also it's very easy to mislead in the context of was/now pricing.

So you artificially inflate the was price in order to make the now price seem like a better deal and the Office of Fair Trading, the Advertising Standards Authority, have been over the past few years very active on that now the Competition and Markets Authority has taken up the baton.

There was a super complaint from Which? about supermarket price promotional practices and that has led to an agreement between the CMA and Asda over was/now pricing, and a key part of that agreement is that the now pricing should not extend for longer than the was pricing was in place. So I should have my pot of yoghurt on sale for £2 for a month and then market it at 50% off £1 for no more than one month.

Michael: And what about multi-buy and offer sequencing? How are they affected by those kinds of decisions?

Dan: So, the CMA also agreed with Asda certain principles around those issues around multi-buy offers, not misleading on multi-buy offers.

So again, very easy to mislead if on day one I have a yoghurt on sale for £1, day two I push the individual unit price up to £1.50 but market it on multi-buy as two for £1. Is the consumer really getting a deal there? And again, the CMA has reached an agreement with Asda over that kind of practice and it's reached an agreement with Asda over the sequencing of offers.

So, it's confusing for the consumer if a supermarket or another retailer moves straight from a was/now into a multi-buy. It's very hard for them to identify whether they are getting a good deal or not. And you know that's Asda, but the Chartered Trading Standards Institute is looking at pricing practices guidance anyway and this really is an issue across the retail sector and it's really a question of where the regulator is going to look next. It could be anywhere from the High Street right through to car dealerships.

Michael: Turning to digital marketing now. Sometimes it's quite difficult to tell the difference between what's editorial and what's advertising. Does that matter?

Dan: Yes, that's absolutely the nub of a lot of the issues in connection with digital marketing and is something that the Competitions and Markets Authority in the UK, the Advertising Standards Authority, the FTC in the States, other regulators worldwide are wrestling with.

The issue is coming up in the context of things like native advertising. So native advertising is where a publication sells advertising space which mirrors the form and function and the design of editorial content on that website. So I seamlessly go from an article to an advert and I don't really notice the difference. You know it's to inspire consumers to pay attention to advertising.

Now there's a regulatory issue with that, obviously, because a core underlying principle of the regulation is that advertising should be identifiable as advertising. We've seen this come to a head in adjudication before the Advertising Standards Authority, for example against the Daily Telegraph and Michelin when they said an article which was in association with Michelin was not identified clearly enough as Michelin advertising.

Michael: You mentioned in your introduction influencer marketing, what's that and why is it important?

Dan: Influencer marketing is hugely popular. You've got a new breed of internet celebrities out there with vast audiences, look at, you know, people like the Kardashians, and advertisers and agencies are anxious to tap into those audiences to dispute their own promotional messages.

But again, the regulators are concerned that a lot of the resulting content is not clear, whether it's an advertising message or whether it's the independent non-commercial thought of that particular celebrity. We've seen a stream of Advertising Standards Authority adjudications on this against Mondelez, against Alpro, and the FTC has taken action and the CMA has also been stamping down.

They've secured undertakings from an agency called Social Chain to ensure that that agency will cease using influencers to promote their clients' brands in a way which is not clearly identified as advertising.

Michael: You're obviously a truly amazing presenter, are fake reviews are real concern?

Dan: Yeah, again absolutely a regulatory hot topic.

So if I took this video, put it on YouTube and then recruited a team of people in Bangladesh or Venezuela to write a load of fake reviews about what an awe-inspiring speaker I am, then in regulatory terms that's a problem.

So the regulators have been looking to ensure that platform owners and advertisers and agencies don't engage in practices which across a body of reviews give a misleading impression to a consumer about how a product is being received in the marketplace. So the lesson here for brands it that you need to look into this. You need not to think that this is just the preserve of rogue traders.

Do you know what your search engine optimisation agency is up to? Are you in any way moderating out or supressing negative reviews on your pages? Are you incentivising any kind of reviews, particularly positive reviews? If you are, then you may have an issue.

Michael: I see a lot about ad placements. What's happening there? 

Dan: So obviously there's the much spoken-about issues on ad fraud and viewability of advertising content online. A lot of great steps are being taken in the industry to address those issues, but advertisers need to be ensuring that these kind of topics are picked up in their contracts with media agencies and with digital agencies that they are complying with the correct standards and that they are measuring their return on investment in a way which is accurate and reflects real people viewing their adverts.

Elsewhere, the Advertising Standards Authority has been looking at ad placements from a different angle, it's been looking at it from the perspective of child protection. So, for example, it issued a ruling against a bookmaker who was distributing an email featuring Iron Man to its over 18 mailing list.

You might think what's the problem with that, the mailing list is all over 18, but the Advertising Standards Authority seems to have taken the very harsh view that irrespective of how you place your advertising and who you are targeting with it, it's possible that a child might be looking over your shoulder and be attracted to inappropriate content. 

Michael: Social media enables consumers to engage directly with advertisers these days. Do advertisers need to be concerned about that?

Dan: Absolutely, I mean that's one of the key benefits of social media and that's something which has driven the success of social media as a marketing platform, the ability to engage with users. But there are risks that are associated with that.

So if a user posts something defamatory or infringing on your Facebook page for example, could you be liable for that, or are you merely hosting that problematic content? Well, I'd say it's arguable that you are not merely hosting it, you're inviting it, you're engaging with it, you're building it into the overall promotion of your brand through that Facebook page.

So there's got to be a risk of liability there and the advertising regulators, the Advertising Standards Authority, has adopted certain principles around the idea that advertisers adopt user generated content by engaging with it.

So if they like it, they re-Tweet it, if they reply to it then potentially they become responsible for the contents of that user's Tweets and whether or not it complies with code rules.

There was an adjudication a couple of years ago against Fireball Whisky, who asked a fairly nondescript question, a fairly non-controversial question on their Facebook page. "What are you up to this weekend?" And got replies like, "well I will be drinking a bottle of Fireball Whisky, being sick and then falling asleep in a hedge" and the Advertising Standards Authority looked at that and said: Fireball Whisky, you are responsible for that content, it's on your Facebook page.

Essentially it fell on the brand to moderate that type of content off the page. 

Michael: Social Media, of course, is pretty immediate too. There's this growth of what's called real time marketing, that must be a concern too, isn't it?

Dan: Well yes, I mean there's tremendous benefits to be had and there are a lot of great examples of real time marketing, so you might remember, for example, the content of brands like Snickers or Specsavers put out around the Luis Suarez biting incident at the last World Cup.

So there's a lot of great content but there is associated risk. It's easy to trip over and defame someone, Kevin Pietersen, the cricketer, sued a high street retailer over some real time marketing content they put out which inadvertently alleged that he was a cheat, that was defamatory.

In the US, the drugstore Duane Reade was sued by the actress Katie Heigl after it took an image of her coming out one of their stores and built it into a tweet, which looked like an endorsement. She sued them for $6,000,000.

Yes, so there clearly are risks and that's before you even get to the PR disasters that resulted from the wrong type of content being put out at the wrong time. And the lesson here is that marketing teams and legal need to work together to come out with a clearance procedure which is fit for purpose, which allows a marketing team to respond to events in a real time fashion and not a 24 or 48 hours later fashion, but nevertheless means that that marketing team is not, you know, operating entirely unrestricted without knowledge of the law. That you know the legal risk is controlled insofar as that's possible.

Michael: Thank you Dan, that's really interesting. We are all consumers and affected by these things and, may I say, you are a truly awesome presenter and everyone should come to you for their advertising needs. Thank you very much Dan.

Dan: Thank you.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
14 Sep 2017, Seminar, Birmingham, UK

Has Cloud replaced traditional outsourcing models? We will compare cloud to outsourcing, consider whether they have effectively become the same thing for many solutions and assess some of the advantages and disadvantages of each model.

18 Sep 2017, Seminar, London, UK

Our annual event as part of the London Design Festival is now in its fifth year. We would be delighted if you are able to join us again.

21 Sep 2017, Seminar, London, UK

Has Cloud replaced traditional outsourcing models? We will compare cloud to outsourcing, consider whether they have effectively become the same thing for many solutions and assess some of the advantages and disadvantages of each model.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.