Tuesday 25 August 2009

OFT to investigate online pricing and advertising, but...

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…!

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