Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
Pay-per-bid auction websites generally follow a business model where consumers pay a non-refundable fee to place each small incremental bid on auctioned products. Several reoccurring issues have arisen in the marketing for these kinds of websites; the guidance below outlines the most common pitfalls and how to avoid them.
- Do not exaggerate savings claims
- Clearly state all terms and conditions
- Ensure testimonials relate to the relevant part of the business
- Ensure all ads are obviously identifiable as such
One subject that has repeatedly arisen in connection with online auction sites is exaggeratedly low prices and savings claims. Advertisers should be aware of the type of claim they are making and ensure they hold robust evidence to support it. For example, the claim “save 95% on an iPad” is likely to be seen as a claim that all consumers can obtain this discount (Marcândi Ltd, 10 December 2014). When using claims such as “save up to 80%” both the ASA and CAP are likely to expect that all items are obtainable at some level of discount, with around 10% of customers achieving the maximum claimed saving. Advertisers should remember that the use of RRPs as the basis of savings claims is likely to mislead if the RRP differs significantly from the price at which the product or service is generally sold. For further guidance please see Recommended retail prices (RRP) and Savings claims.
Any price claims should include the cost of bids. The ASA has previously ruled that price claims for various winning bids were misleading because they did not include the cost the winning customers had incurred in bidding for the products and therefore they did not represent the full price paid by the successful bidders (Marcândi Ltd, 10 August 2011).
Marketers should ensure that details of how the website works are made clear to users before they commit to signing up. For example, it should be clear that there is a cost attached to making each bid and the cost of credit packages that consumers have to buy to participate should be visible before registration. If there is a direct debit auto-top up or other significant conditions they should be prominently stated.
This also applies to significant conditions for promotions (for example money-off offers, price promotions and prize draws). All significant conditions should be outlined in the initial ad. Marketers should also ensure they are adhered to and avoid changing them during the course of the promotion. The ASA has previously upheld complaints against advertisers who continued offers beyond the stated expiry date (Marcândi Ltd, 10 December 2014; Sophora Media Ltd, 22 January 2014). For further guidance see Sales promotions: Terms and Conditions.
In addition to ensuring testimonials are genuine and that permission has been demonstrably sought to use them in marketing, advertisers should make sure they apply to the advertised service. It is unlikely to be acceptable to use testimonials for a branch of the company outside the UK to promote the UK business. Advertisers should also bear in mind that using non-representative examples could potentially be seen as misleading consumers about the potential savings that can be obtained. For further guidance see Testimonials and endorsements.
Presenting ads as newspaper articles or other editorial content is likely to be considered misleading in the absence of clear labelling (Sophora Media Ltd, 22 January 2014). For further guidance please see Recognising marketing communications: Overview.