The New Zealand Herald judged to have misled consumers in Herald Homes Advert

The Advertising Standards Authority (ASA) this week published its Complaints Board’s decision against NZME., publisher of the NZ Herald. The board adjudicated that the Herald Homes advert claiming that “On average properties sell for 20% more when the marketing includes the Herald Homes…” was likely to mislead consumers.

I filed the complaint with the ASA following the articles I wrote in October when the advertising campaign commenced (Can advertising generate extra sales price for property / Sale price premium cannot be claimed by advertising alone). I should highlight that at the time I was self-employed. Subsequently I have taken a role with Trade Me Property and this complaint is in no way related to Trade Me Property.

I submitted a detailed complaint to the ASA supporting my claim that the advertising was misleading and potentially deceptive. I judged it to be misleading, as the advertising made no reference to the fact that the research upon which the advert was based only examined million dollar plus homes over a selected six month period. I further stated that their claim could potentially be deceptive as the analysis of the data, whilst proving correlation between advertising and selling price, could not definitely prove causation between advertising and sale price given the multitude of factors and variables involved in selling a property.

The outcome is gratifying – the complaint has been upheld and the NZ Herald has been found to have undertaken an advertising campaign which was judged to be likely to mislead consumers. However, the process taken to reach this outcome and the remedies available to the ASA leave me feeling somewhat frustrated.

The ASA is an industry organisation which seeks to uphold industry standards but is unable to exercise any financial remedies or penalties. The options are limited to forcing advertisers to withdraw and cease to undertake such advertising, matched to a published retraction.

The NZ Herald, in their response to the complaint, stated that:

The Herald Homes advertising campaign has finished its run. It is no longer present on bus shelters, is not scheduled to run in any further print media, and has also concluded its run on all NZME digital channels such that it is no longer accessible online (eg, via www.heraldhomes.co.nz).

I consider this a poor excuse or justification. However the most surprising component of the response from the NZ Herald was their attempt to offload responsibility for the advertising to its research company (TNS Research):

TNS Research were (accordingly) asked to provide their confirmation that the claim and explanatory footnote to the advertising were: accurate; and capable of substantiation based on the research undertaken by them.

NZME received confirmation from TNS Research prior to publication of the Herald Homes advertising campaign, that the claim and explanatory footnote were accurate and statistically supported by their research.

In my opinion the NZ Herald has a responsibility beyond simply asking the research company for confirmation. The ASA Complaints Board found the NZ Herald had breached the Basic Principle #4 of the Code of Ethics. This found that the NZ Herald advertising had not been prepared with a due sense of social responsibility to consumers and society.

The advertising campaign is over and sadly the NZ Herald has achieved what it wanted to achieve – attempting to convince agents and vendors that the NZ Herald Homes advertising can deliver a 20% price premium over CV. Sadly that claim was misleading but the NZ Herald has banked any competitive advantage this has given them between October and December (the strongest listings period of the year).

My only wish now is that the NZ Herald and in fact all publications seeking to attract advertising dollars from agents and vendors take seriously their responsibility to act within the ASA guidelines and Code of Ethics and not to undertake misleading or deceptive advertising.