Background
Summary of Council decision:
Two issues were investigated, one of which was Not upheld and one Upheld in relation to one ad only.
One issue was informally resolved after the advertiser agreed to withdraw their advertising.
Ad description
One radio ad and one press ad for Smart Energy:
a. A radio ad heard on 7 July 2018, “Get the kettle on. Put the TV on. Turns the lights on, turn the lights off. Put the dinner on. Turn the heating up, turn the heating down. Crikey, we use so much energy everyday it is exhausting. And expensive. But with a smart meter you get an expected average saving of 354 kilowatt hours. That might not mean much but if we all got one, we could save the same amount of energy as it takes to power Manchester, Liverpool and Newcastle for a year. Save your energy for powering cities. Contact your energy supplier about getting your free Smart Meter. Based on BEIS expected average annual savings 2%. Participating suppliers and eligible customers only. Savings possible by measuring energy usage and reducing wastage”.
b. A press ad seen on 27 June 2018 included an image of an illuminated city skyline at night. Text in the ad stated “If we all get a smart meter we could save enough energy to power every home in Aberdeen, Cardiff and Manchester for this many days 365. With a smart meter you could save an average of 354kWh of energy a year. Because when you can actually see how much energy you’re using, you can make a few small changes and use less of it. Save your energy for powering cities. … Available 2020 in England, Scotland and Wales. Representative of a typical in-home display. Based on BEIS expected average annual savings of 2% 354kWh with a smart meter compared to a traditional meter and a home using 17,690kWh/year”.
Issue
Fourteen complainants challenged whether the following claims were misleading and could substantiated:
1. in both ads, that with a smart meter consumers could save an average of 354 kilowatt hours per year; and
2. that those savings could “power Manchester, Liverpool and Newcastle for a year” in ad (a), and “power every home in Aberdeen, Cardiff and Manchester” for a year in ad (b).
Response
1. Smart Metering Communications Body Ltd t/a Smart Energy GB provided two reports from the Department for Business, Energy and Industrial Strategy (BEIS) that were the basis for calculating the quoted energy saving.
Smart Energy GB said that the first report was the latest of its type to be published by BEIS, from August 2016, which provided analysis on customer behaviour after switching from an old-fashioned meter to a smart meter. They quoted findings from the report which stated that BEIS conservatively assumed gross annual reductions in demand would be 2.8% for electricity and 2% for gas credit customers. Smart Energy GB said that they decided to assume the lower savings rate of a 2% fall across both electricity and gas energy usage once consumers switched to a smart meter. Smart Energy GB supplemented this with evidence submitted by British Gas to the House of Commons Science and Technology Select Committee which stated that two years after installation of a smart meter, British Gas had observed a greater reduction in average annual consumption of around 3%, relative to a customer on a standard meter. They said that even though real-world information from British Gas suggested a higher rate of saving, they decided to use a more conservative saving of 2%.
The second report, published in July 2017, gave an indication of average electricity and gas consumption per household in the UK which they said reflected the latest data available at the time the ads were broadcast or published.
Smart Energy GB explained that they calculated 2% of average household electricity and gas consumption to arrive at a figure of 354kWh for the expected average annual saving. They stated that figure was the result of rounding up by 0.2kWh to the nearest whole kWh. They believed that rounding was statistically insignificant and that the difference would not affect the headline claim in a way that would materially mislead consumers.
Smart Energy GB believed that the spoken qualification at the end of the ad – “Savings possible by customers measuring energy use and cutting waste” – made it sufficiently clear that energy savings made after installation of a smart meter were the result of customer action, rather than via the smart meter itself.
Radiocentre endorsed the advertiser’s response in relation to ad (a).
2. Smart Energy GB provided data from the 2011 census as the basis of the number of households in Aberdeen, Cardiff, Manchester (as referenced in ad (a)); and in Manchester, Liverpool and Newcastle (as referenced in ad (b)). The number of households in Great Britain was also sourced from 2017 survey data from the Office of National Statistics. Smart Energy GB explained that by extrapolating the level of expected energy saving for one household to the number of households in Great Britain, they estimated the level of energy saving that could be achieved in Great Britain overall if every home installed a smart meter. By dividing that figure by the average level of energy consumption of a UK household, they in turn estimated the number of households this level of saving could power. The number of households was equivalent to that in Aberdeen, Cardiff and Manchester combined, and similarly the number of households in Manchester, Liverpool and Newcastle. They found that to be the case when allowing for a margin of error.
Radiocentre endorsed the advertiser’s response in relation to ad (a).
Assessment
1. Upheld in relation to ad (a) only
The ASA considered consumers would interpret the claims in each ad differently. The voice-over in ad (a) began by listing multiple sources of everyday energy use around the house. We considered this claim, followed by “Crikey, we use so much energy everyday it is exhausting. And expensive” would be interpreted by listeners as an implication that households typically used a large amount of energy. The ad subsequently claimed “With a smart meter you get an expected average saving of 354 kilowatt hours”, which we considered would be interpreted as an indication that following installation, the smart meter itself would be able to reduce a household’s energy usage by roughly that amount; particularly because the main body of the of ad didn’t otherwise make clear that it was the result of change in the everyday energy usage mentioned earlier. We acknowledged that the ad ended with a qualification that stated, “Savings possible by measuring energy usage and reducing wastage”. However, because this was separated from the main claim, we did not consider it provided sufficient clarification to override listeners’ overall interpretation of the ad.
In contrast, in ad (b) the claim “With a smart meter you could save an average of 354kWh of energy a year” was immediately followed by clarification which stated that “Because when you can actually see how much energy you’re using, you can make a few small changes and use less of it”. We also noted that the ad included the image of a real-time display showing “Today’s usage” and “Electricity now”, such that overall, readers would be likely to appreciate that observing their energy usage was one stage in the process. We therefore considered the claim in the context of ad (b) would be interpreted by consumers as an indication that energy savings following smart meter installation were the result of being able to see how much energy they were using and reducing their consumption accordingly.
Smart Energy GB drew upon BEIS analysis from August 2016 as the basis of the claims. While that report made conclusions about reductions in energy consumption upon installation of a smart meter, we understood the report did not introduce its own research, but drew upon existing studies. In terms of research undertaken in the UK, the report referenced analysis by Ofgem from 2011 and by the Department of Energy and Climate Change (DECC) from 2015.
We understood the Ofgem analysis was designed to test consumers’ responses to information about their energy use. The study’s method involved measuring the impact that various interventions, designed to influence consumers’ behaviour, had on their level of energy consumption. Those interventions were undertaken separately by four large energy providers, and while we understood the types of interventions were broadly similar across the providers, there was considerable variation in the methodology used by each energy provider. The study measured the impact of real-time displays, whereby consumers monitored their energy consumption as it was being used, in households with and without a smart meter. While we understood that generally speaking there was a drop in energy usage in households with a smart meter, the magnitude of the change was different between providers. Moreover, in several of the sub-studies it appeared that the effect of a real-time display in conjunction with a smart meter could not be isolated and was likely to have been affected by other influences. We considered the findings of the study in relation to whether smart-meter technology reduced energy usage were not conclusive.
The further study from DECC similarly sought to understand the effect that a smart meter with real-time display had on consumers’ energy consumption. It sought to compare the effect that smart meter installation had on the energy consumption of one group of households, relative to those without a smart meter. In contrast to the previous study, we noted that smart meter installation was the only variable being tested and therefore that the analysis could more reliably isolate the impact of a smart meter. We understood that the study accounted for external factors that might impact on energy consumption and we considered its methodology was robust. It concluded that the installation of a smart meter and real-time display would, on average, lead to a statistically significant reduction in annual electricity consumption of 2.3% and gas consumption of 1.5%. Given the findings of the report, we concluded this evidence was sufficient to substantiate a claim that, on average, installation of a smart meter led to a fall of around 2.0% in energy consumption.
Smart Energy GB supplemented this evidence with a submission in September 2016 by British Gas to the House of Commons Science and Technology Select Committee, to support their claim that over the two-year period following installation of a smart meter by British Gas customers, energy consumption on average fell by 3.1 3.1 Advertisements must not materially mislead or be likely to do so. more, relative to those on a standard meter. This statement was based on a comparison of energy usage by their customers two years post-installation of a smart meter. The evidence showed that both smart meter and standard meter customers experienced a fall in energy on average over this period. However, the greater magnitude of decline for smart-meter customers was attributed to the installation of this device. It wasn’t clear from the evidence supplied how many British Gas customers were included in the sample, nor whether the comparison controlled for other factors besides smart meter installation that might have affected household energy consumption. Nevertheless, we acknowledged the evidence lent further weight to suggest that installation of a smart meter on average led to a fall in energy consumption of a similar magnitude to that stated in the ads.
We understood Smart Energy GB had applied a 2.0% fall to the level of average household consumption of electricity and gas in the UK in 2016, based on data from BEIS, to arrive at the 354 kWh figure featured in the claims. We understood that was the latest data of its type available at the time the ads were published. Although the claim was based on UK average household consumption of energy, and therefore encompassed a larger geographic area than was covered by the advertiser’s service (which included England, Scotland and Wales), we understood there was no geographical breakdown of this figure and we had no reason to believe that household energy consumption excluding Northern Ireland would be significantly different and so was unlikely to have impacted on the accuracy of the figure.
We considered the evidence substantiated that the installation of a smart meter on average led to a fall in household energy consumption because, when used in conjunction with a real-time display, consumers could track their energy consumption, making them more likely to change their behaviour to reduce how much energy they used. We considered that ad (a) went further than this, to suggest that the installation of a smart meter would in itself result in a reduction of household energy consumption. We therefore concluded that ad (a) was misleading.
Ad (b) made clear that any energy savings would be the result of behavioural changes, and because the evidence substantiated the claim that smart meter usage reduced household energy consumption we concluded that the ad was not misleading.
On this point ad (a) breached BCAP Code rules
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
3.2
3.2
Advertisements must not mislead consumers 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 consumers need in context to make informed decisions about whether or how to buy a product or service. Whether the omission or presentation of material information is likely to mislead consumers depends on the context, the medium and, if the medium of the advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means.
(Misleading advertising) and
3.9
3.9
Broadcasters must hold documentary evidence to prove claims that the audience is 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).
On this point we also investigated ad (b) under CAP Code (Edition 12) rules
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
3.3
3.3
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), but did not find it in breach.
2. Not upheld
The ASA considered consumers would interpret the claims “we could save the same amount of energy as it takes to power Manchester, Liverpool and Newcastle” and “If we all get a smart meter we could save enough energy to power every home in Aberdeen, Cardiff and Manchester” to be an indication of the amount of energy it would be possible to save if there was large scale uptake of smart meters by households. We considered the claims would be understood as projections conditional on future behaviour. While consumers would interpret them as estimates, they would also expect the claims to be based on a methodology that showed there was a reasonable probability of the projection occurring in that scenario.
We understood Smart Energy GB had applied a 2% saving in energy consumption per household following smart meter installation and extrapolated how much energy that would potentially save if applied to every household in Great Britain. Smart Energy GB had used the total number of households in Great Britain rather than the UK as the basis of the claims in order to reflect their area of responsibility. We noted that the number of households in each city was based on data from 2011, and that the total number of households in Great Britain was from 2017 data. However, we acknowledged that both sources represented the most recent comprehensive data of their type and that the Smart Energy GB had been consistent in this method. Although the number of households in each city was likely to have fluctuated since 2011, we considered the source of that data was from an authoritative source and we did not have reason to believe it had changed significantly since that date.
We considered the evidence was sufficient to substantiate the claims and concluded that they were not misleading.
We investigated ad (a) under BCAP Code rules
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
3.2
3.2
Advertisements must not mislead consumers 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 consumers need in context to make informed decisions about whether or how to buy a product or service. Whether the omission or presentation of material information is likely to mislead consumers depends on the context, the medium and, if the medium of the advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means.
(Misleading advertising), and
3.9
3.9
Broadcasters must hold documentary evidence to prove claims that the audience is 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), and ad (b) under CAP Code (Edition 12) rules
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
3.3
3.3
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), but did not find them in breach.
Action
Ad (a) must not appear again in its current form. We told Smart Metering Communications Body Ltd t/a Smart Energy GB that if making energy savings claims for smart meters they should make sufficiently clear that these depended on users monitoring their energy and making changes.
