Comparative adverts are useful so long as firms are honest and smart

Businesses will compete and advertising has a lot to do with a company’s profit margin and how it increases its target market.

Comparative advertising — the kind that is blatantly and commonly used in politics, either for show, votes or ego inflating tactics is “a strategy which a company uses to show how its product or service is superior to that of its competitors by comparing the benefits and costs within the advertisement itself,” says Investopedia.

Comparative advertising could be direct or indirect but the effect remains the same — a company advertises its product by using comparison with the hopes of widening its target market.

It has seen many organisations in court battles over legalities in a number of countries across the globe.

According to Wikipedia the earliest comparative advertising case dates back to 1910 in the US, that of Saxlehner vs Wagner.

The US Federal Trade Commission (FTC) defines comparative advertising as “advertisement that compares alternative brands on objectively measurable attributes or price, and identifies the alternative brand by name, illustrations or other distinctive information”.

After the early 1970s, the FTC began to encourage comparative adverts with the objective of creating independent, unprejudiced and educational adverts for the consumer in order to instil positive and competitive business environment. FTC states that comparative advertising is good as long as the comparisons are “clearly identified, truthful and non-deceptive.”

In the UK and some European countries, advertising is governed by and regulated by a series of EU directives. Argentina has no restrictions on comparative advertising.

In most other countries, however, it is allowed with specific restrictions — heavily reliant on honesty, integrity and moral ethic of what the advertisement is relaying to the public.

Advertising and business law entities like Commercials Advice (CAD), the Advertising Standards Authority and the Court of Justice of the European Union share the same FTC sentiments on encouraging comparative advertising as a better business practice.

There are negatives of comparative advertising. For example, there are legal repercussions. When a company embarks on this path, it better cushions itself with a good legal team in case legal action is taken against it.

The strategy may also backfire in the case of a bigger organisation trying to malign a smaller and struggling one — most people love underdogs and tend to support the “little man”.

If done wrong and with malicious intent it can ruin a company’s reputation and brand name.

Like malicious gossip with no underlying truth it hurts the gossip in the long run more than it hurts the party it is intended to ruin.

The positives, however, are that it creates awareness for the public on products and services provided by competitors in order to help them make clear buying decisions.

Negative advertising creates more PR than positive advertising and works just as well as bad news. So yes, sometimes some spicy stew can spruce up your product or service.

Last and most importantly if the advert is done with utter honesty, does not portray the competitor as sleazy, upholds integrity and educates on better purchasing power, then the company cannot go wrong.

In the world of business, we all know that business and honesty don’t always go hand in hand, but Warren Buffet could not have said it clearer: “Trust is like the air we breathe. When it’s present nobody really notices. But when it’s absent, everyone notices.”

An honest, smart, well thought out comparative advertisement will work wonders if it has no malicious intent.

Marketing is a vital business builder and can make a product stick in the hearts of many for years. How you choose to advertise will all depend on what you want to achieve and how you intend to achieve it.