The OFT intention to study online advertising and pricing already represents several advantages, including long overdue 'tidying up' and updating of sector definitions such as:
- 'Drip' pricing tactics, where consumers only see an element of price upfront but price increments 'drip' through during the buying process.
- 'Baiting' sales which entice consumers with promises of discounts but then have very few items on offer at the sale price.
- Reference prices, that is, price promotions which create a relatively high reference price compared to sale price, such as 'was £50, now £20', half price, 50% off, or £20 compared to a recommended retail price of £50.
- Time limited offers such as sales which finish at the end of the month or special prices which are available for one day only.
- Complex pricing where it is difficult for consumers to assess unit price, for example three for two or 'non-inclusive' prices where lots of separate (often necessary) components are needed to generate a final price.
These will all be subject to analysis, but unfortunately they may also look at the use of personal information in advertising and pricing — in particular, where information from a consumer's online activity is used to target the internet advertising he or she receives.
In other words, a potential undermining of one of the greatest breakthroughs in 20/21 Century advertising, the use of consumer-need as a basis for targeted advertising messages, a means of reducing SPAM and other info-overload.
Two steps forward, and one step back…come back self-regulation, done properly…!
Tuesday 25 August 2009
OFT to investigate online pricing and advertising, but...
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