Cautionary Tales

Sydney Morning Herald

Saturday September 25, 2004

Paul McIntyre

To avoid the wrath of industry watchdogs and the courts, beware the seven deadly marketing sins, writes Paul McIntyre.

Purgatory is boring and hell is hot, but sometimes companies find themselves there by ignoring common sense. By being aware of marketing's seven deadly sins, the path to heaven is smoother.

A new checklist of marketing's seven deadly sins has been released by a law firm because companies continue to fall foul of advertising regulation, competition law and the Australian Consumer and Competition Commission when marketing products and services.

According to Michael Dodge, a partner at the law firm Arnold Bloch Leibler, companies keep hitting the same regulatory snags.

It shouldn't happen, but Dodge says marketers "don't sit back and think about things" enough when developing their marketing communications strategies.

"They are obvious points, but people get caught up in the creative aspect of their campaigns and don't think about things, particularly when the themes have been used before," says Dodge. "The classic case of is the insurance company which used the Goggomobile Telstra had previously used. Suddenly, the insurance company found its campaign, which was probably getting quite good traction in the marketplace, had to be aborted because of a complaint by Telstra."

Even though Telstra's Yellow Pages had not used the Goggomobile ads for years, Dodge says the similarity between the two campaigns meant the insurance company, Shannons, was essentially 'ambush marketing' illegally (see sin 3).

"These things seem obvious but they crop up more than they should," he says. "People do tend to return to themes. It's difficult to find ... innovative ways to market products given the huge range of things marketed these days."

Dodge says the two most common slip-ups are copying and ambush marketing. The first deals with using text, images or sounds without permission and the other is appearing to be linked to something well known, which is why the Olympics administration is so ruthless with companies which try to look like financial sponsors when they do not have official status.

"The idea behind this is we wanted to do a very simple checklist to [highlight] the key areas of difficulty for marketers," says Dodge. "The worst thing for a company is to get a campaign out there and be getting positive feedback and then be subsequently hit by a complaint from another company or by the ACCC."

Copying

Technology has made it too easy to reproduce information, images and sounds. In a recent court case, a holiday resort distributed an advertising brochure which included photographs the resort did not have permission to use. It was found to have breached copyright and ordered to pay damages.

Brand "free riding"

You cannot use someone else's trademark to market your products without permission, even if it is not registered. A company in Queensland recently was found liable for selling sunglasses that appeared very similar to the Oakley brand. They failed to declare that their products were not original Oakleys and lost the court case

Ambush marketing

A widely used marketing tactic is to use the well known to promote something unknown, but you must be careful not to confuse the public about whether there is an official connection if there isn't one. An example is when South Australian Brewing Co Limited and Lion Nathan Australia Pty Limited were prevented from selling beer under the name Duff Beer as the name suggested an association with The Simpsons TV series. The evidence established that The Simpsons series, through Duff-loving characters such as Homer and Barney, would influence people to try the product produced by the breweries.

Failing to tell the whole story

The Australian Competition and Consumer Commission is particularly interested in this area. The Commonwealth Bank fell foul of this principle when it promoted no establishment fees while fine-print conditions in its TV commercials declared exceptions. The TV fine print text was deemed to be too small and not shown long enough for the average viewer. The bank was ordered to launch corrective advertising.

Games, competitions and gifts

Competitions, promotional games and gift offers are proven techniques to generate interest and sales, but you must be sure they are neither an illegal lottery nor breach the prohibition on internet gaming. A soft drinks company was found by a court to be running an illegal lottery when it launched a promotion where its customers could collect bottle tops and enter a sweep. The problem was the firm put all the bottle tops into a barrel and drew a limited number of entries each month. It was ruled an illegal lottery.

Comparative advertising

It is legal, but the onus is on the advertiser doing comparative advertising to ensure comparisons with a competitor's product or service are accurate. Black & Decker ran a comparative TV ad campaign a few years ago against Makita in which an "experiment" showed Black & Decker's superiority. But the commercial did not show smoke coming from the Black & Decker drill. Neither did the company fully disclose the noise the drill made. The ad was banned and corrective advertising ordered by the court.

Designer copyright

You cannot copy the visual appearance or shape of another product.

© 2004 Sydney Morning Herald

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