Broadband providers face new ad rules to help make pricing more transparent

The Advertising Standards Authority (ASA) is cracking down on broadband provider’s price claims, saying that transparency in broadband price ads must improve if advertisers are to be confident their ads will not mislead consumers and “risk being banned”.

The ruling, introduced today (31 October) states that from now on providers must ensure their price claims incorporate the following:

• Show all-inclusive up-front and monthly costs; no more separating out line rental.
• Give greater prominence to the contract length and any post-discount pricing.
• Give greater prominence to up-front costs (such as delivery fee, activation fee, installation fee).

The move comes after the ASA first announced it would be forcing providers to show all-inclusive up-front and monthly costs in May. That followed research which found that just 23% of those asked could correctly identify the total cost per month for broadband from the ads. Some 22% were not able to identify the total cost per month even after a second viewing of the ad.

READ MORE: Broadband providers hit by ASA crackdown

The ASA’s chief executive Guy Parker is confident the move will be welcomed by consumers who have previously had difficulty understanding broadband provider ads. “From today, we expect to see a change in how broadband providers advertise their prices. The effect should be a real positive difference in how consumers understand and engage with ads for broadband services.”

Some broadband providers are already following the ASA’s new guidelines, including TalkTalk and Vodafone. The latter claims it was the first to abolish line rental charges back in August, launching a high-profile TV campaign promoting the change.

For those that are not, including market leader BT, the ASA admits prices will now appear higher. This could lead to a move away from the price focus in broadband ads, particularly over the short term.

“While price claims may appear higher under our changes, they will present a more transparent picture of the cost of signing up to a broadband package rather than consumers getting a surprise when they get their bill,” a spokesman from the ASA told Marketing Week.

BT says it will adhere to the new ASA guidelines and change the way it shows pricing.

“The changes will affect new customers, who will be able to make their decision to buy or not based on the all-inclusive price for broadband with no separate charge for line rental. Existing customers will continue to pay the same prices and their charges will continue to be listed in the same way on their BT bill,” a spokesperson for BT told Marketing Week.