Joint research commissioned by the Advertising Standards Authority (ASA) and Ofcom published today (21 January) reveals the current approach to presenting pricing in broadband ads is likely to confuse and mislead consumers about the true cost of the deals.

The objective of the research was to test consumers’ understanding of the presentation of pricing offers in typical broadband ads. It also looked at the presentation, and likely consumer understanding of additional pricing elements such as introductory deals, discounts, line rental, delivery charges and the length of the contract.

The study revealed that 81% of the participants were not able to calculate correctly the total cost of a broadband contract when asked to do so. Almost three-quarters (74%) believed that information about one-off and on-going costs after an introductory period was either ‘fairly’ or ‘very unclear’.

Following the research, the ASA will introduce new advertising rules that come into effect on 30 May. The ASA will approach broadband providers and recommend they advertise all-inclusive monthly costs without excluding line rental and put greater emphasis on up-front costs.

Speaking on the study, ASA chief executive Guy Parker says: “It’s essential we make sure people aren’t misled by pricing claims in broadband ads.  That obviously wouldn’t be good for them, but nor would it benefit broadband providers, because advertising works better when it’s trusted.”

The industry responds

TalkTalk has come out in full support of ASA’s findings and has “already called on Ofcom to bring all-in pricing”. However, the broadbrand provider believes that change can only be achieved if the entire industry comes together.

A spokeswoman told Marketing Week: “Until the whole market moves to single prices, any company that advertises its products like this will struggle to compete with what look like better deals from other providers. We want Ofcom to be bold and tackle this problem in their strategic review and we would absolutely support them in doing so.”

Meanwhile, a spokesperson for Sky added: “We work hard to ensure customers are fully informed when we’re marketing Sky’s products and services and our advertising adheres to all industry guidelines. We will review the new research and work with the ASA to ensure our advertising is in line with any new guidance it introduces.”

However, the Internet Services Providers’ Association (ISPA) believes more detailed research is needed to corroborate the survey findings.

Nicholas Lansman, secretary general of ISPA, says: “Price is only one factor when a consumer chooses a service and the engagement with an advert is only one part of a purchasing decision – we urge the ASA to consider the whole customer experience when consulting on changes to its advertising guidelines.

“We look forward to working together with our members and the ASA on how to empower and inform consumers, and it is worth emphasising that the adverts that were used in the survey fully comply with current guidelines”