Summary of Council decision:
Two issues were investigated, both of which were Upheld.
A web page on www.megabargains.com for an online auction site Madbid.com included text that stated "How to Save 95% on an iPad 4 or iPhone?" The ad featured an image of a woman with accompanying text that stated "Claire investigates new trends in internet shopping". Text in the ad under the heading 'Madbid passes the test!' stated "I started with a bid on the item I'd wanted for so long ... a brand, spanking new iPad. After a relatively short auction, and much to my surprise ... I won! For only £28.22 in total I got an iPad worth £499!" Text under the heading 'Detailed instructions for MadBid' stated "Step 1: Create an account on MadBid and get your free credits. Click our exclusive link to get a discount and the same offer as I did! This offer expires: Thursday, 28 August 2014..."
The complainant challenged whether:
1. the stated offer expiry date was misleading, because they understood that this date changed every day; and
2. the savings claims in the ad were misleading and could be substantiated.
1. Marcandi Ltd t/a MadBid explained that new users would receive extra free credits, typically between 100 and 150%, when they entered the offer code during the purchase of credits for use in the bidding process.
2. MadBid said that the savings claim "How to save 95% on an iPad 4 or iPhone 5?" should have been amended to read "How to save up to 95% on an iPad 4 or iPhone 5?". They provided two spreadsheets of sales data that detailed the Recommended Retail Price (RRP) of the products, the prices of the products, inclusive of shipping costs, at which their customers had paid and the percentage of savings that they had been able to achieve in the six months prior to when the complainant had seen the ad. The spreadsheets identified 10% of customers who had been able to achieve the higher percentages of savings in the bidding process.
MadBid stated that it was commonly known that the RRP for Apple products remained the same until a newer model was released. They provided a number of screenshots of web pages showing the prices of the products sold on the official online Apple store and of technology news blog pages that were published prior to the official release of the products which detailed the prices at which they would be sold.
The ASA noted MadBid's comments that the offer referred to in the ad was for free credits that would be provided to new users when they purchase credits for the bidding process.
We noted that text in the ad stated "Create an account on Madbid and get your free credits. Click our exclusive link to get a discount and the same offer as I did!" We considered that the ad did not make clear whether the offer related to free credits or discounts on particular products. We also noted that the offer expiry date refreshed daily to state the date of the following day from when the user saw the ad, while the offer code remained unchanged.
We considered that the offer expiry date and the nature of the offer, within the context of the ad, were material information that consumers required in order to make an informed decision in regards to the service offered by the advertiser. We considered that the ad created an impression that the offer would expire within a short period of time from when consumers saw the ad and that this was likely to influence consumers' decision to register an account on the advertiser's website in order to take advantage of the offer referred to in the ad before the purported expiry date. In the absence of evidence to demonstrate that the offer genuinely expired on the date stated in the ad, we concluded that the stated offer expiry date was misleading.
On this point, the ad breached CAP Code (Edition 12) rules
Marketing communications must not materially mislead or be likely to do so.
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means. (Misleading Advertising) and 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation).
We noted the heading of the ad prominently stated "How to save 95% on an iPad 4 or iPhone 5?". We considered that consumers, upon viewing the claim within the context of the ad, would expect that they would achieve savings of 95%. We noted that the ad also stated "then if you win - you enjoy a MASSIVE discount on the price of the item", which we considered to further reinforce consumers' expectation that they would be able to achieve a significant saving when bidding on the advertiser's website.
We noted the sales data provided by Madbid showed that only 2% of customers had been able to achieve 95% in savings on the iPhone 5 model which they had bid on and won, and that no customers had been able to achieve 95% savings on the iPad 4 model. We also noted that varying amounts of savings from 98% to 3% were achieved during this period, but noted that some customers won the products at prices that were greater than the products' RRP without any savings, which we considered to be inconsistent with consumers' expectation of guaranteed savings as implied in the claim.
Further, we noted that a number of screenshots provided by Madbid showed the price of one product from Amazon and the prices of a single range of products as sold on the official Apple online store, but noted that these did not adequately detail the date and time at which the screenshots were taken. We also noted that other screenshots were of blog entries from technology news sites that were dated prior to the release of another product, which detailed the prices at which these products would be sold. We did not consider that this evidence was sufficiently representative of the prices at which the products referred to in the ad were generally sold across the market at the time when MadBid sold the products.
For the above reasons, we considered that the claim "How to save 95% on an iPad 4 or iPhone 5" had not been substantiated and concluded that the claims were misleading.
On this point, the ad breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading Advertising), 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation), 3.11 3.11 Marketing communications must not mislead consumers by exaggerating the capability or performance of a product. (Exaggeration), 3.17 3.17 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication. (Prices) and 3.40 3.40 Price comparisons must not mislead by falsely claiming a price advantage. Comparisons with a recommended retail prices (RRPs) are likely to mislead if the RRP differs significantly from the price at which the product or service is generally sold. (Other Comparisons).
The ad must not appear again in its current form. We told MadBid to ensure that future ads did not give the impression that the offer would expire on the date stated in the ads and that they did not make saving claims, unless they held robust evidence to substantiate the claims.