Background
Summary of Council decision:
Four issues were investigated, of which three were Upheld and one was Not upheld.
Ad description
A banner ad and claims on the websites www.uk.madbid.com and http://megabargains24.com/UK/02/?KW=DSPADB&CAMP=A03 for a penny auction website on which users could bid for products by buying credit for each bid:
a. The banner ad stated "Shopping expert reports how UK customers get up to 80% discount using 'crazy' online loophole".
b. Claims on the ads included "Up to 80% off Online Shopping - Loophole Exposed!".
c. Claims on the website www.megabargains24.com, which explained how to use penny action sites, included "Usually, on these sites, you need to buy credits to bid on auctions against other online users online, and if you win, you'll enjoy a huge discount on the product price. Madbid was offering a limited bonus at that time: 100% extra free credits, on your first credit purchase. This was ideal for me, so I bought the credits to fully test the website". Under the title "Testing MadBid", text stated "I paid only £57.90 for an HD TV that's worth more like £779 … I ended up paying £140 for a MacBook Pro that cost £1,500". Text below stated "Detailed instructions on how to use MadBid … click on our exclusive link to get 100% extra free credits on your first purchase!". Under the title "In conclusion", text stated "I've always thought that saving up to 95% compared to retail prices was impossible, but now,I [sic] know there's a way". Text in a black banner, at the top of the page, stated "The page that you are currently reading is an ad feature demonstrating a new gamified way to shop online. All of the content on this page is copyrighted".
A separate page was entitled "How to save 95% on an iPad 4 or iPhone 5?". Text below stated, "MadBid are so confident they can prove users that it works that they were offering a limited-time promotion for new customers. They'll give you free credits - double whatever you buy on your first purchase! … After a simple registration, I received my free credits from MadBid … For only £28.22 in total I got an iPad worth £499. To make sure it was no fluke, I decided to try and win something else. Much more to my surprise, I won again! This time the savings were more startling. In the end I paid only £72.99 for a MacBook pro worth £2,000. Very impressive!".
Issue
1. Two complainants challenged whether the references to a "loophole" were misleading and could be substantiated.
2. Two complainants challenged whether the references to an "80% discount" in ads (a) and (b) were misleading and could be substantiated.
3. One complainant also challenged whether the prices and saving claims shown in ad (c) were misleading because the ad did not make it sufficiently clear Madbid.com was a paid auction site with a cost added to each bid.
4. A third complainant challenged whether ad (c) was obviously identifiable as a marketing communication.
Response
1. Marcândi Ltd t/a MadBid pointed out that a dictionary definition of a "loophole" was "an ambiguity or inadequacy in the law or a set of rules". They said that, in the context of the ad, the word "loophole" referred to a different method of shopping. They explained that MadBid offered three alternative means of buying products: placing a winning bid; using placed bids as a discount to buy the auctioned product; or using placed bids as a discount to buy other products.
2. MadBid pointed out that they had referred to a discount of "up to" 80%. They explained that it was possible to get discounts of up to 80% using the alternative shopping methods offered by their website. They provided a document that listed products sold in the UK at a discount of 80% or more, which detailed the comparative RRP price and a document that listed the aforementioned products and RRP prices with a link to a website on which each product was being sold. They also provided one, two or three screenshots for each product, showing the price at which it was being sold on various websites, and an additional document that listed the cheapest price represented by the screenshots in comparison with the price at which the MadBid products were sold. Finally, they provided two graphs which showed the breakdown of how many products were sold at a discount of 80% or more.
3. MadBid said that the black banner at the top of the page, which stated "The page that you are currently reading is an ad feature demonstrating a new gamified way to shop online" and text within the ad, which stated "Usually, on these sites, you need to buy credits to bid on auctions", made it sufficiently clear that MadBid was a paid auction site.
4. MadBid said that the black banner at the top of the page, which stated "The page that you are currently reading is an ad feature demonstrating a new gamified way to shop online", made it sufficiently clear that MadBid was an ad. They said that the vast majority of campaigns use this type of text at the top to make it clear that it is advertorial content.
Assessment
1. Upheld
The ASA acknowledged that MadBid had used the word "loophole" to refer to the alternative methods of shopping offered by their website. However, we considered consumers were likely to interpret the reference to a "loophole" to mean that the ad offered a means of directly obtaining a discount, rather than providing alternative methods of purchasing items. Because of that, we concluded the ad was 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.
and
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).
2. Upheld
We noted that MadBid referred to discounts of "up to" 80%. We also noted that MadBid provided evidence to show savings of 80% and more could be made on products. We noted that the links to websites and the screenshots only showed prices at which products were currently being sold and did not represent the price of products at the time that MadBid sold the products or when the ads were published. We considered, therefore, that the advertiser did not have sufficient evidence at the time that the ad was published to substantiate the claim. Because we considered the advertiser did not substantiate the claim, we concluded that the ads 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.
and
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).
3. Upheld
We acknowledged that it was clear from both the name of the advertiser and the text in the top banner, which stated "a new gamified way to shop online", that MadBid.com was an auction site. We also noted the text "Usually, on these sites, you need to buy credits to bid on auctions against other online users online". However, we noted that there was no other reference to the attached cost on the website. We considered therefore that the ad did not make it sufficiently clear that there was a cost associated with each bid and that consumers would not immediately understand the nature of the service. We considered the cost associated with each bid was material information, which should have been prominently disclosed. Because the website did not make it sufficiently clear there was a cost attached to making each bid, we concluded the prices and savings 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.
and
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).
4. Not Upheld
We acknowledged that ad (c) included a black banner at the top of the page, which stated "The page that you are currently reading is an ad feature." We considered the text was in a prominent position and consumers were likely to see the banner before reading the rest of the ad. Because of that, we concluded the ad was recognisable as a marketing communication.
On this point we investigated the ad under CAP Code (Edition 12) rules 2.1 2.1 Marketing communications must be obviously identifiable as such. and 2.4 2.4 Marketers and publishers must make clear that advertorials are marketing communications; for example, by heading them "advertisement feature". (Recognition of marketing communications), but did not find it in breach.
Action
The ads must not appear in its current form. We told MadBid not to use saving claims without adequate evidence to substantiate them, and to ensure material information was made sufficiently clear.
