Lying, ethics and law

Lying is easy, marketing is hard and I'm constantly amazed at how some marketers look up to chronic liars and try to emulate them.

Aside from the legal implications, there's ethical considerations. The problem I've struck with the ethics concept is that many Internet marketers believe that something is ethical if they can get away with it. Ethics is such a grey area as each person's moral values can differ - but legally, lying simply isn't on and can see your business slapped with a heavy fine from governing authorities or a civil suit and your online reputation in ruins.  

Puffery vs. deceptive advertising

To a degree, all online marketers are liars. For example, take this statement:

"Our prices are insane!"

The truth of the matter is that if your prices are insane, you'll go out of business.

Here's another one:

"The best flombles in the galaxy!"

It's unlikely you have undertaken enough research to quantify that statement regarding flombles available on Planet Earth, let alone the entire galaxy. Who knows, there may be a merchant on planet 874X62D that produces better flombles.

Yet another:

"You'll love the new version of our software!"

Rather presumptuous don't you think?

Statements such as these are called "puffery". Let's call it a white lie.

Puffery is simply a claim about a product or service that really cannot be substantiated and an exaggeration that is not likely to mislead the client. It's just attention grabbing stuff that the average customer won't base the purchase of the decision on.

Puffery is fine, it's expected and to a degree, necessary in order to grab folks off the virtual street and into your online store to investigate what you're offering.

Lying by omission or misleading

Where things get sticky are situations such as lying by omission. It's not quite an outright lie, but one that seeks to withhold the truth or a failure to correct a perception. Lying by omission is probably the most widespread form of Internet marketing related lies, as bold faced lies are usually easily detected by most consumers.

An example of lying by omission is where you offer a refund guarantee on a product; but the terms of the refund aren't mentioned anywhere in your copy, nor even annotated with a "*conditions apply" type statement. The only place those conditions are mentioned are buried in your terms of service and the conditions are such that hardly any refunds would ever be issued. Most merchants also know that people simply don't read the terms of service carefully, particularly if they are very long. This strategy has clear intent.

As a refund guarantee is an important issue that a customer will certainly base a purchase decision on, it should be clearly flagged if there are conditions attached and what those conditions are. Failure to do so can get you into legal hot water as it's not too hard to prove in this instance that the intent of the merchant is to mislead.

Dealing with competitor's lies

"How are we meant to compete with X if they are just lying?". This is the question that's usually asked by a honest merchant just before they embark on the slippery road that their competitor has chosen. Instead of sinking to the same level as the competitor, there are other things you can do.

Dob the competitor in

If there's a governing body in your country that monitors advertising, simply turn the competitor in. This is not a schoolyard where tattle-tales are stigmatized and ostracized; this is business - it's about survival of the fittest and that doesn't necessarily mean the slimiest. By turning these businesses in, you'll also be creating a more level playing field for everyone. If the competitor lists industry trade organization affiliations, it wouldn't hurt to send an anonymous email to the organization explaining what they are doing.

Bear in mind too that it only takes one merchant going over the top with lying to set off a chain reaction throughout an entire industry, which brings disrepute upon it as a whole, which helps nobody. Example: used cars.

Publish consumer guides

If you're aware of shady tactics of others in your industry, compile a consumers guide outlining these issues. It's important that the guide isn't purely a self promotional piece; just outline the facts of the tricks and traps and how consumers can avoid them. These articles can also be excellent linkbait; that is, others will link to them, driving more potential clients to your site.

Mention in the guide that you're doing this not only to protect consumers, but to create a more level playing field in your industry. Don't publicly name and shame a competitor unless you like paying your lawyers.

Encourage consumers to post negative reviews

This is a bit of a double-edged sword, but if your business is squeaky clean, not really something to worry about.

Consumers will often search around the web for reviews and testimonials regarding a particular product, service or company.

When they become your client, they might mention they were ripped off by X company. In those instances where you think the customer has a valid grievance (bearing in mind of course customers can sometimes expect too much or lie themselves), encourage the customer to air their grievances in a  public forum such as a popular reviews site. This can help alert the slimy competitor that the jig is up and encourage them to change their ways, while steering potential customers away from them.

Deceptive advertising: a definition

So where is the line between clever Internet marketing and lies that can get you into trouble? Probably the best definition I've come across is the one the USA Federal Trade Commission uses, which I believe is also used in many other countries. They state that deceptive advertising (excluding puffery) is where a statement will:

"mislead consumers and affect consumers' behavior or decisions about the product or service"

.. so when creating your marketing copy, it's good to always keep that in mind as the criteria you'll be judged against should someone lodge a complaint about you. Bear in mind also that this test is based on a combination of average consumer perception and merchant intention.

The bottom line is, with the exception of puffery, if you have to lie to sell a product or service - there's something wrong with what you're selling or how you're selling it. You'd be far better off investing the energy used in lying and dealing with the subsequent fallout in attending to the faults.


Michael Bloch
Taming the Beast
http://www.tamingthebeast.net 
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