Advertising and marketing your business

Look at your potential customers’ demographics or characteristics, their media preferences and what they might be doing that would make them notice your advertisement. Target your advertising to reach potential customers rather than paying a lot to reach large numbers of people who will never be customers. Advertising media options include print (newspapers, magazines), radio, television, Internet, display (posters, billboards), direct mail (flyers in the mailbox), and sponsorship (eg. having your logo on a football team jumper). Don’t blow your entire advertising budget on one expensive ad. Try to find ways to stretch your dollar over a period of time. A TV or radio ad is probably not the best option for a new business unless you can afford it.

Truthful advertising is good for your business reputation but there are also laws against making false or misleading representations. Some may think that truth and advertising is a contradiction in terms, but a well-informed customer is a satisfied customer.

The Australian Consumer Law (ACL) prohibits your business from making false or misleading representations about:

• the standard, quality, value or grade of goods or services
• the composition style, model or history of goods
• whether the goods are new
• a particular person agreeing to acquire goods or services
• testimonials by any person relating to goods or services
• the sponsorship, approval, performance characteristics, accessories, benefits and uses of goods or services
• the price of goods or services
• the availability of repair facilities or spare parts
• the place of origin of a product - for example, where it was made or assembled
• a buyer's need for the goods or services
• any guarantee, warranty or condition on the goods and services.

What price should be stated?

If you include the price of a product in an advertisement, you must tell consumers the full cash price for the product. It’s an offence to state only part of the price without also displaying the total amount to be paid. The full price includes any applicable GST.

Attaching more than one price to goods can mislead your customers. Whenever an item has more than one price marked on it, it’s an offence to sell it for more than the lowest marked price. However, you have the right not to sell the items at all. It’s also an offence to falsely inflate the price of goods to give the impression that they have been discounted or are on ‘sale’.

Bait and switch advertising involves advertising a small number of goods at low prices to entice customers to your business. When the advertised goods quickly run out, customers are shown higher-priced goods.

It’s an offence to advertise goods for sale and there are reasonable grounds to believe that you’ll be unable to supply those goods for a reasonable period. You’re responsible for making sure that there are enough supplies available to cover a sale. You still may not be able to meet the demand but you should have at least planned for it and have reasonable stock or offers available. This is not just common sense, it’s the law.

What is reasonable will depend on the type of product, the context of any advertisement and your previous trading experience. The period of offer should also be made clear in the advertisement. If an offer is available for a limited period then put this in the advertisement. If stocks are genuinely limited, such as a clearance sale, say so in the advertisement or, you can supply equivalent goods immediately and at the advertised price if the customer accepts.

Go to the <offering credit page> for more information.

When a business operates under a name other than that of the proprietor, that name must be registered under the Business Names Registration Act 2011 (Cth). Business names are administered by the Australian Securities and Investments Commission (ASIC). Go to the ASIC website or call 1300 300 630 for more information.

It’s an offence to give false and misleading information on jobs or business ventures that operate from home, require work or require money to be invested.

Example 1: an envelope stuffing scam reads "Would you stuff 1000 envelopes for $1000" if you were offered a 'Complete Home Mailer Program' at a cost of $189. But rather than receiving supplies of paper and envelopes, respondents were sent information on how to operate a mail order business similar to the one which had just duped them.

The Courts have ruled that what matters is whether a job or business opportunity advertisement will mislead the average person in the street not whether it intends to mislead. Also be aware that leaving out significant information can cause you problems. Prospective employers and employment agencies must ensure that advertisements for job offers are expressed in clear, accurate and definite terms.

The licensee’s name and licence number must be shown in all advertising. If the licensee has a business name registered under the Business Names Registration Act 2011 (Cth) that name can be included instead of the licensee’s.

This applies to all residential building work where the reasonable market cost of the work to be done (labour and materials) exceeds $5,000 (including GST). It also applies to specialist work (regardless of cost) including plumbing, gasfitting, electrical wiring, refrigeration and air conditioning work.

Check that advertisements include the:

• name of licence holder (or registered business name) as shown on licence
• licence number with correct category of work.

Some people may take offence or be upset with certain ads, so be careful about what you say and how you say it.

Advertising Standards Bureau administers a national voluntary system of advertising self-regulation through the Advertising Standards Board and Advertising Claims Board.

The Advertising Standards Board decides on complaints about advertising in relation to language and the discriminatory portrayal of people, concern for children, portrayals of violence, sex, sexuality and nudity, and health and safety.

The Advertising Claims Board decides on complaints to do with truth, accuracy and legality of advertising on a user pays cost recovery basis.

Go to the Advertising Standards Bureau website or call (02) 6173 1500.