There are a lot of ways to approach promotion for your small business, and yet a surprisingly narrow path to tread in order to ensure that you don’t mislead customers or fall foul of regulators.
This is where the distinction between puffery in your advertising efforts, and outright deception, becomes incredibly important. Here’s why this is worth worrying about.
Put simply, puffery refers to exaggerated claims or opinions expressed by advertisers about their product or service which are subjective rather than factual claims . Examples of puffery include phrases like “the best”, “luxurious”, etc., as well as broad sweeping statements such as “our product can make your life better!”
These types of promotions do not require substantiation from an advertiser because consumers recognize them for what they are—subjective opinion versus fact.
On the other hand, deceptive advertising occurs when an advertisement makes false claims about a product or service that cannot be proven true. This includes definitively inaccurate statements about price, product features, or performance. These types of ads are considered misleading and illegal according to FTC guidelines .
In order for an advertisement to be legally compliant it must not contain any statements that cannot be proven to be true.
The short answer to the question we originally posed is that understanding the difference between puffery and deceptive advertising is essential for small business owners in order to remain within legal boundaries. If you’re looking to create effective marketing materials without crossing into making false claims, it pays both financially and ethically to understand the line between legal promotion versus unlawful activity.
To further unpick the difference between what constitutes an exaggerated claim versus a false statement, let’s take the example of two competing products—an energy drink and a sports beverage.
The companies behind these products both put out ad campaigns that feature athletes participating in various activities while drinking their respective products.
The energy drink company claims that its product “gives you more power than any other on the market!”
This is an exaggeration because there is no way to prove or disprove such a sweeping statement; however, if they were to make specific claims about how much faster their product will get you through your workout compared with competitor brands, then those statements would have to be substantiated by reliable evidence for them not cross into being deceptive advertising.
Conversely, if the sports beverage company was making objectively untrue statements like “our sports drinks reduce fatigue by 50%” then this would be considered a false claim and therefore in breach of ad regulations.
So there’s nothing wrong with a little hyperbole, but it doesn’t pay to assert that a product has particular capabilities when this isn’t borne out by the reality of the situation. Working with a product marketing agency like StorySells.com is a good way to ensure that you don’t overstep the mark with your own promotional claims.
For small business owners, engaging in deceptive advertising practices can have serious consequences that rumble on indefinitely.
Aside from running afoul of FTC guidelines and potentially being fined by the Commission itself, businesses that engage in false or misleading advertising may also be subject to consumer lawsuits. This could lead to costly settlements or legal fees, as well as damage to a brand’s reputation and customer satisfaction levels.
Then there are other negative impacts such as loss of customer trust, and reduced sales resulting from consumers not believing an advertiser’s messaging anymore due to their past misadventures. This effect can linger long after any fines have been paid out by the company.
The good news is that with a little thought and effort, you can put together campaigns that are both effective and legally compliant.
Firstly, make sure all claims made in any advertisement can be substantiated with reliable evidence. This includes objective facts such as price points and product features. You can still use subjective options like “our product is the best!” while remaining on the right side of the law; just make sure you don’t overdo it on the puffery either.
Secondly, always ensure any images used accurately represent what consumers will receive if they purchase your item—this means no photo-shopping models wearing clothing items different from what’s actually available on the market, for example.
Finally, practice transparency by clearly outlining terms of service (e.g., warranty information) as well as refund policies associated with purchasing a particular item or service before advertising its availability. Be totally upfront and honest with customers, and any of the aforementioned negative repercussions will be easy to avoid.
Most importantly, be honest about the features and benefits of your product or service; this means no exaggerations or false statements that don’t stand up to scrutiny.
It’s also wise to create ads with clear messaging so consumers can easily understand what they are buying into when purchasing from you. Consider using customer testimonials as well as reviews from industry experts who have used your product or service in order to build trust among potential buyers.
Last, of all, emphasize value rather than price—this helps differentiate yourself from competitors by focusing on why customers should choose your item over others on the market which may cost less but offer fewer features. In the long run, all of this will benefit your business far more than any short-term gains from unethical approaches.
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