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Comparatively speaking: advertising do's and don'ts

Comparatively speaking: advertising do's and don'ts

Comparative advertising can be a powerful weapon in the computer business, but there are traps for the unwary.

The first thing to realise about comparative advertising is that it is often contentious because it draws direct comparisons between your products and those of your competitors.

The second thing to accept is that some of your competitors won't hesitate to turn to the courts if they think you've breached the law.

The Trade Practices Act, which prohibits misleading and deceptive conduct, regulates what can and can't be said or implied in comparative advertising. If your advertisement is found to be misleading, your competitors can claim damages and sometimes force you to "right the wrong" by undertaking corrective advertising. This can be embarrassing as well as expensive.

If you are going to use comparative advertising, you need to be sure that your competitors can't dispute the content of your ads or the basis upon which they have been prepared. Here are some basic rules of thumb:

Do not compare apples and oranges

The comparison must be between products that are fairly and properly comparable. Obviously, it is misleading to ignore the existence of your competitor's advanced models and compare one of your superior models with one of its basic product lines.

Use real-life examples

Comparisons involving product tests must measure real-life experience or an appropriate surrogate, thereby conveying a comparison which is directly relevant to real-life experience. It can be misleading to conduct a comparison which conveys facts or figures which are simply not significant or not found in any typical real-life circumstances. For example, it can be quite misleading to compare the "recommended retail prices" of products, if in fact those products are generally sold at discount prices and the RRPs are virtually ignored in practice.

Independent surveys

Comparisons based on independent testing can carry considerable weight - but the independent expert must be scientifically qualified; must have been properly instructed with appropriate data; must have been instructed to provide an independent opinion without "loaded" instructions; and his or her methodology must be scientifically defensible.

Competitors, or the Australian Competition and Consumer Commission (formerly the Trade Practices Commission), may demand access to the full report and to the results so they can examine the whole process by which the tests were initiated and conducted.

Product tests must be fair

You cannot show defects in your competitors' products by doing tests that are outlandish or are a poor substitute for real-life experience. The need for vigorous scientific testing sometimes means that proper tests are too expensive, but the courts will not be sympathetic if you cut corners because you're operating on a limited budget.

What does the research show?

The courts will take a reference to the results of any research as implying that the research was scientifically reliable and that the findings are significant in scientific terms.

Who is the target audience?

Advertisements in specialist journals which are aimed at sophisticated readers can generally make more assumptions and survive more attacks than those aimed at "lay" readers.

Remedies

The Federal Court has recently confirmed that a competitor can recover damages for lost sales and profits, or other losses (if he/she can prove them) suffered because of misleading advertising. Such a case would require evidence about the prevalence and impact of the offending advertisement on buyer behaviour. Similar evidence would be needed to convince the court to use its powers to order corrective advertising. Before ordering this most bitter of remedies, courts generally need to be persuaded that the misleading message was widely circulated.

When all is said and done, comparative advertising is judged by the same standards as any other advertising. However, because of the damage it can do to a competitor's market share, it is likely to be worked over and dissected much more thoroughly than any other advertisement you put together. If you're going to use comparative advertising, make sure it's honest, and tread carefully!


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