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Why Truthful Marketing is Good For Business

By Adeline Teoh

4 min read

Marketing is all about showing how your business is different compared to your competitors and many brands stretch the truth a little to achieve this. However, going too far can mislead customers and cause damage to your finances, or worse your reputation. Heres why its important to fact-check all your marketing content and make sure your brand messaging is telling the truth at the heart of it all.

Most people understand there’s a little exaggeration in the act of promotion. There are, however, instances where marketing crosses the line by being false, misleading or even dangerous. There are a number of recent cases that show why it’s not a good idea to bend the truth too far, no matter how good it makes your business sound.

Avoiding Legal Consequences

Australian Consumer Law prohibits your business from making false or misleading representations in relation to your products, goods or services. This covers everything from the quality, value or grade of your offerings, to misrepresenting a buyer’s need for the goods or services.

There are three government bodies with overlapping responsibilities with regard to advertising and marketing in Australia:

  1. The Advertising Standards Bureau oversees the system of advertising self-regulation in Australia. It provides a number of advertising codes implemented by industry. Organisations voluntarily adopt the code, usually when they join a professional association.
  2. The Australian Communications and Media Authority is the government agency responsible for the regulation of broadcasting, the internet, radio communications and telecommunications and its remit covers advertising or marketing transmitted via these media.
  3. The Australian Competition and Consumer Commission enforces the Competition and Consumer Act 2010 and some related legislation. One of its functions is to promote fair trading for the benefit of the public.

Once your marketing content whether its in a print format or digital has been published and distributed to the public, remember that anyone can make a complaint about your advertising or marketing. If the case is found to have merit, it could lead to heavy fines or even a prison sentence.

For example, in 2013, the Federal Court stated that supermarket chain Coles was guilty of misleading consumers with its “freshly baked” breads when in fact the baked goods had been partially baked in overseas factories, frozen and then baked in store ovens, giving the impression they were fresh and baked on premises. In 2015, Coles received a $2.5 million fine for the deception.

When used incorrectly, even the simplest of words can be harmful to your business, so it’s always important to ensure that any advertising or marketing collateral is thoroughly fact-checked before being published.

Maintaining Your Reputation

Reputational damage may include sustained backlash in the media or over social media, boycotts of your product or services, which can have detrimental financial effects and other repercussions that could disrupt your business negatively. Remember that it takes years to build a reputation, and just seconds to destroy it.

Even if your marketing is lawful, consumers may feel that it’s unethical and if this is not addressed, it may be damaging to your reputation. With social media, it’s highly possible that word gets around very quickly, so it’s best not to mislead or misrepresent your business. If you’ve done so inadvertently, correct it as soon as possible.

Publishing company Penguin signed a contract with health advocate Belle Gibson in 2013 for a recipe book called The Whole Pantry, based on Gibson’s popular app of the same name. Gibson claimed she had brain cancer and had healed herself using natural remedies.

In 2015, these claims were found to be fraudulent and Penguin admitted it had never asked for evidence of Gibson’s medical condition. Although the book was simply a collection of recipes – therefore not unlawful or misleading in itself it was tied to Gibson’s fraudulent story. So, the publisher pulled the book from sale and paid $30,000 to the Victorian Consumer Law Fund as a penalty for failing to validate the factual (rather than recipe) content of the book.

Using a Different Approach to Marketing

People often joke that ‘truth in advertising’ is an oxymoron but truth does its own marketing for values such as honesty, integrity and trustworthiness. Marketing isn’t just about persuading people that your business is ‘the best’ it’s about making your business memorable.

You can do that using the truth in creative though not misleading ways, for example through humour. Imagine if an insurance company used a slogan such as: “We take care of boring things for interesting people.”

You dont have to be pedantic over everything you say but you do need to be careful that youre not outright lying to sound competitive.

Being honest and accountable are just a few things that small businesses should practise in order to prevent any harmful consequences to the business financially or otherwise. Besides, true authenticity will help you win the loyalty of your audience and lessen the risk of losing customer trust. 

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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