Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Following this decision, advertisers in the sector have six months or until 15 May 2018 to ensure that their business-to-business advertising makes clear the overall monthly cost of a broadband package and makes clear all up-front costs that are paid by most customers.
A Facebook ad and an online banner ad for the broadband provider Plusnet plc promoted their broadband product for businesses:
a. The Facebook ad, seen on 28 March, featured the text "£4.50 a month for Unlimited Business Broadband. Order today!" Underneath, there was an image of a man alongside more prominent text which stated "Unlimited Business Broadband from £4.50 a month", in which the price "£4.50" appeared in a larger text size. Smaller text below stated "When you take a 24 month contract - £10.50 a month line rental".
b. The banner ad, seen on 28 March, stated "Unlimited Broadband from £4.50 a month" with the price "£4.50" appearing in a slightly larger text size. Smaller text underneath stated "24 month contract - £10.50 a month line rental". At the top of the ad, text stated "Business Broadband".
1. One complainant, who noted that the £10.50 monthly line rental fee was not included in the claim "£4.50 a month", challenged whether ad (a) was misleading.
2. A second complainant challenged whether ad (b) was misleading for the same reason.
Plusnet plc explained that they had used interest-based targeting on Facebook to target ad (a) at small business owners and used online behavioural advertising to target ad (b) at those who had recently visited their business product pages on their website.
Plusnet said that unlike their business-to-consumer advertising where they consolidated the monthly fee and line rental into one monthly price, their business-to-business advertising separated the two prices as they did not believe businesses, including small businesses, would be misled by the separate pricing. They pointed out that the ASA’s previous research into broadband pricing and the guidance resulting from the research did not include business-to-business advertising. They said it was common practice across the industry for the monthly fee and line rental to be separated out in business-to-business advertising.
Plusnet said business customers operated in a professional capacity and were looking for products that met their business needs at the right price with the relevant speed and data allowances; therefore, they had a higher level of competence and knowledge than a typical consumer.
Plusnet said they accepted that the line rental fee was small and difficult to read in the ads in question. Upon receipt of the complaint, they amended their advertising to ensure the line rental price was more prominent in a larger font, and was positioned close to the monthly price.
Plusnet said that there was a £4.99 router delivery fee if customers chose to take a Plusnet router as part of signing up to the service, but the router was not compulsory and therefore they did not believe it needed to be included in the main ads.
1. & 2. The ASA noted that both ads promoted Plusnet’s business broadband and that the products had been targeted at business customers. We therefore considered the ads from the perspective of business customers.
We understood that line rental was a compulsory charge that all business customers would have to pay, meaning that the minimum total monthly cost of the product including the £10.50 monthly line rental fee was £15.00 a month. We also understood that there was an up-front cost of £4.99 for a router delivery fee for all customers who chose to take a Plusnet router when signing up to the service, which was likely to be the majority of customers.
Ad (a) featured the headline claim “Unlimited Business Broadband from £4.50 a month” with the price claim “£4.50” in a notably larger font than the rest of the headline. Underneath, in a significantly smaller font than the whole of the headline, text stated “24 month contract - £10.50 a month line rental”. The ad did not reference the router delivery fee. We considered that the line rental fee was so small that it was likely to have been overlooked by those viewing the ad, and they were therefore likely to understand from the ad that the broadband package was available for £4.50 a month with no up-front costs.
In ad (b) the claim “24 month contract - £10.50 a month line rental” was positioned directly underneath the headline “Unlimited Broadband from £4.50 a month”, but was in a significantly smaller font size than the headline claim, with the price claim £4.50 appearing in a larger, more prominent font than the rest of the headline. The ad also did not reference the router delivery fee. As such, we considered that the overriding message of the ad was that the package cost £4.50 a month with no up-front costs.
We acknowledged Plusnet’s offer to position the line rental fee closer to the headline claims and in a larger font. However, we considered that the prominence afforded to the headline £4.50 price claim in both ads was such that those suggested amendments were likely to be insufficient to counter the overriding impression of the ads to be that the monthly cost of the package was £4.50 a month.
We noted Plusnet’s view that business customers would be more competent and knowledgeable than typical consumers and therefore would not be misled by the ads. However, we considered that individuals acting in the course of business were likely to respond to the content in a materially similar way to the average consumer, who is taken to be reasonably well-informed, observant and circumspect.
Because business customers were likely to interpret the ads to mean that the product was available for £4.50 a month with no up-front costs when in actuality the minimum price was £15.00 a month including line rental for all customers with an additional £4.99 to pay in the first month for most customers, we concluded that the ads were misleading.
The ads breached CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising), 3.17 3.17 Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication. and 3.18 3.18 Quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers. However, VAT-exclusive prices may be given if all those to whom the price claim is clearly addressed pay no VAT or can recover VAT. Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable. (Prices).
The ads must not appear again in their current form. We told Plusnet plc that when targeting businesses they must ensure they make clear the overall monthly cost of their broadband packages, for instance by merging the monthly cost and line rental into one all-inclusive price. We also told them to make clear all up-front costs that would be paid by most customers, for instance by presenting them together with the total monthly cost.