As British Airways retreats to lick its wounds following last week’s humiliating High Court defeat, the advertising industry is preparing for an onslaught of comparative ads.
Mr Justice Jacob’s ruling that the Ryanair ad headlined “Expensive BA.DS” was “honest comparative advertising” and his subsequent comment that ” the real reason BA does not like it is precisely because it is true” have rammed home the message that it is acceptable to criticise your competitors in ads as long as you do not lie.
In an increasingly competitive market, comparative advertising can be a relatively cheap and effective way of garnering publicity for a brand, but as the number of complaints about comparative advertising pouring into the Advertising Standards Authority (ASA) demonstrate (1,370 so far this year), it is also proving to be a hazardous marketing tool.
While comparative advertising is rife in some industries, notably the telecoms, utilities and supermarket sectors, others have steered clear in the belief that saying anything denigratory about a competitor will result in a slapped wrist at best and a costly court case at worst.
The Ryanair victory may very well persuade these companies that comparative claims can be an effective way to boost their business.
“A lot of people will look at that ruling and say ‘we can really go for it now’,” says Rupert Howell, president of the Institute for Practitioners in Advertising.
But while some industry sources believe the ruling will bring the UK closer in line with the US, where having a pop at your competitors is almost a prerequisite, others think the potential pitfalls of comparative advertising mean many companies will continue to exercise caution.
“This case clearly shows that you can be detrimental about another trademark as long as it is the truth,” says Ian Mackie, litigation partner at McFarlanes. “It is a welcome clarification of how far you can go in comparative ads and I hope that as a result we are going to see more robust comparative advertising.”
The Control of Misleading Advertisements (Amendment) Regulations 2000 state that “comparative advertising is permissible in the interests of competition and public information” as long as it is not misleading, the comparison is of goods for the same purpose and the comparison is of representative features, including price.
Last week’s ruling echoes the judgment, also made by Mr Justice Jacob, in the 1996 High Court clash between mobile telephone operators Orange and Vodafone.
Like BA, Vodafone was left licking its wounds when it took the rival mobile phone network to court over its comparative ads which claimed customers would save &£20 every month by switching to Orange.
The judge dismissed Vodafone’s case as “hopeless” and Orange promptly launched a &£1m ad campaign which gleefully proclaimed “law but elsewhere disorder” and “tried and trusted”.
Likewise, Ryanair wasted no time in pouring salt into its rival’s wounds by launching a campaign last Wednesday that said: “BA are expensive. It’s official. The High Court says so!”
Other low-cost airlines also joined in the fray with easyJet using a national press ad to congratulate Ryanair and agency sources believe Virgin is gearing up to launch a BA-bashing campaign through its ad agency Rainey Kelly Campbell Roalfe/Y&R.
Previous ads for Richard Branson’s airline have included a millennium campaign that read “BA’s Millennium Bug, Virgin Atlantic” and “BA don’t give a shiatsu”.
But while the BA judgement may have clarified the law on comparative ads, a question mark still hangs over how effective they are in wooing consumers to choose the advertiser’s brand over that of a competitor.
“You’ve got to have a good reason for comparing yourself with the opposition, some reason to show that you are better, because the danger is that you are taking a brand that consumers have grown to love and saying that they are stupid for using it,” says one agency source .
There is also the risk that by comparing your own product to that of a competitor, the rival brand may end up benefiting.
“There is a very fine line between aggressive and offensive advertising and advertisers have to be careful not to step over that line,” says Howell.
“Consumers are very smart and if they think you are trying to cheat the numbers or be offensive to a competitor the ad could very easily backfire and actually be damaging to the advertised brand.”
In addition, the potential for confusing customers through comparative advertising is massive as the number of complaints about misleading price comparisons lodged with the ASA shows.
Only last week Virgin Energy was told to withdraw a press ad for its new gas and electricity service after four competitors complained that the ad’s claim that customers would save money by switching to Virgin was misleading because it did not state the nature of the price guarantee.
Last year the ASA issued a warning to supermarkets that claims must be substantiated to avoid censure following a raft of complaints over comparative ads from rival chains which resulted in Asda and Safeway being forced to withdraw mislead ing or exaggerated price comparisons.
And earlier this year, Tesco came under fire for its comparative price campaign, with Boots and Iceland both threatening to take legal action against the supermarket.
“For some products, competitive advertising helps maintain and develop a competitive market which in many ways is what advertising is all about,” says Ian Twinn, director of public affairs at the Incorporated Society of British Advertisers.
“But a lot of cases are not as clear-cut as the Ryanair one and many advertisers will still be very cautious about going down that path. Why give a competitor an advantage by helping to advertise their products or services?”
British Gas, a company which faced an onslaught of unfavourable price comparisons from rivals following deregulation of the gas market in May 1999, believes that the complex pricing structures in the energy market make price comparisons difficult and can easily result in misleading or inaccurate claims.
“On the whole, consumers don’t like to see companies attacking other companies in advertising,” says a spokesman for British Gas.
“There were problems in gas competition when some companies used comparisons with our prices that were deemed unfair by the ASA as they didn’t compare ‘like for like’.”
As the industry prepares to unleash a barrage of comparative campaigns, advertisers would do well to remember that the operative word in Mr Justice Jacob’s judgement was “honest”.
Competitors will be constantly scrutinising rival companies’ ads and advertisers have to ensure they have the evidence to back up the claims.
Unscrupulous advertisers preparing to take their rivals down a peg or two may well find themselves embroiled in a court battle with a rather different outcome to that of the Ryanair case.