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

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

Most Read Contributor in Canada, October 2018

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.


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

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

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions