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January 2004 — Vol. 81, No. 11

SMALL BUSINESS

Make your ads effective, not deceptive

Be sure you heed truth-in-advertising laws

By Chris Amorosino

Free-lance writer in Unionville

A business advertises a product for $214. When customers come in, 95% of them are told the $214 product requires add-ons to meet their specific needs. This advertiser is in trouble.

Bill Venezia, deputy director of the Trade Practices Division in the Connecticut Department of Consumer Protection (DCP), uses the $214 example to make a point. “A business can run an ad that’s technically and factually correct, but that ad can still be deceptive and misleading.”

If the vast majority of buyers must pay more than the advertised price, the ad’s misleading.

In Connecticut, the DCP monitors advertising and marketing practices. The department receives more than 10,000 consumer complaints a year, most of which are handled through an “assurance of voluntary compliance” agreement. Others require a consent order, which normally involves a monetary penalty. The most serious complaints are referred to the state attorney general, who can sue in court for up to $5,000 per violation. Run a deceptive ad 10 times and the penalty could be as much as $50,000.

National advertising for most products and services, however, falls under the watchful eye of the Federal Trade Commission (FTC). Other government agencies investigate advertising by airlines, banks, insurance companies, common carriers, and companies selling securities and commodities.

The FTC doesn’t only protect consumers; one of its top enforcement priorities is fighting fraudulent and deceptive practices aimed at small businesses.

What’s ‘unfair’ or ‘deceptive’?

Advertising, according to the FTC, must be truthful and nondeceptive, advertisers must back up any claims with evidence, and advertisements can’t be unfair.

A deceptive ad is defined by the FTC as one that contains a statement or omits information that is important to the buying decision and is likely to mislead reasonable consumers. Any health or safety claim — for example, “XYZ Sunscreen reduces the risk of skin cancer” — must be proven by reliable scientific evidence before the ad runs.

And if an ad is likely to cause substantial consumer injury that cannot reasonably be avoided and is not outweighed by the advertised product’s benefits, the FTC deems the ad “unfair."

Federal and state regulators closely watch ads that include product guarantees, refunds and exchange policies, comparison prices, and sales. Claims consumers cannot easily evaluate on their own — “XYZ Gasoline decreases engine wear” — also warrant extra scrutiny.

Some dos and don’ts

One way to avoid being deceptive is by not using absolute statements or words like “always” and “never,” says Mary Carsky, Ph.D., chair of the Management/Marketing Department at the University of Hartford’s Barney School of Business. “You can say you have high-quality products, but you can’t say you have the best,” she explains. “As soon as you say ‘the best,’ you’re open to questioning. How do you know it’s the best?”

Charlie Mason, CEO of the Mason & Madison advertising agency in Bethany, agrees. He calls absolute words “white words” because people tend to ignore or not hear them. Chris Knopf, chairman and executive director of Mintz and Hoke, a communications firm in Avon, adds that absolutes are not very credible, sound amateurish, and aren’t effective.

You should also avoid the “bait and switch” tactic, according to Richard Maloney, director of the DCP’s Trade Practices Division. “We want to make sure that if you advertise a product, that it’s available or [that] you will give the consumer a rain check. We don’t want to see businesses advertising a low-price product to entice people in and then offering them something completely different,” says Maloney. “That’s one of the biggest complaints we get. And once a consumer complains to me, [we generally find] there’s a problem with that advertisement.”

Carsky also cautions against using comparative advertising. She says criticizing competitors gives them free advertising and may make customers react negatively to the company running the ad.

Knopf agrees: “That type of advertising becomes very unsavory.”

Both Mason and Knopf say the issue of deceptive advertising rarely, if ever, comes up with their clients. In his 30 years in the ad business, Knopf says he has never run across a client who was trying to deceive people. “There’s nothing good about deceptive advertising,” he says. “There’s a moral reason [to avoid it]; it tends not to be effective; and it’s hazardous in terms of financial penalties.”

So, what’s effective?

Carsky says ads should describe the product’s features and how they help the customer. “Take things that are true and amplify them,” she says. “If you have good customer service, say so and explain what you mean.”

Knopf recommends focusing on a legitimate point of difference between your product or service and your competitors’ and appealing to emotions. Great advertising comes from making an emotional connection with your target audience. “All buying is emotional and is later justified by logic and reason,” he says.

Mason says the power of an advertising message results from the overlap of three areas: what’s true and accurate about the organization and product; what’s relevant to the customer or audience; and what’s unique or what sets the company or product apart from the competition.

For more information

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