Call Me Irresponsible! - Bad Taste In The Mouth For Papa John's

WHAT HAS HAPPENED?

On 15th December 2021 the Advertising Standards Authority handed down its ruling against pizza retail chain Papa Johns following an investigation into two online advertisements which offered 'Free Bitcoin worth œ10' and, 'Save œ15 when you spend œ30 or more & get œ10 worth of Bitcoin from the online cryptocurrency exchange Luno!'. The Regulator was damning of the pizza chain describing its behaviour as 'irresponsible'. It found that the above advertisements took advantage of inexperienced consumers and 'trivialised' investment in cryptocurrency.

WHAT DOES IT MEAN?

During its investigation Papa John's supported what it had written on Twitter and its website by claiming a long-term relationship with cryptocurrency and that some potential and actual customers may be aware of the link between Papa John's and Bitcoin. However, the Advertising Standards Authority poured cold water over Papa John's argument.

TARGET MARKET

The Advertising Standards Authority examined the pizza provider's target market and concluded that the adverts were aimed at an overwhelmingly general audience. It elaborated that the vast majority of customers interacting with the company's commercial offering intended to purchase pizza and related food products. The Regulator found it hard to believe that those who bought food items from Papa Johns were experienced in purchasing Bitcoin or let alone had the pre-requisite basic knowledge to understanding what it involved.

INVESTMENTS

The Advertising Standards Authority then considered investments. Regardless of the promotion offered by Papa Johns, it appeared to emphasise how serious decisions to invest in cryptocurrencies such as Bitcoin are. It made three observations. Firstly, cryptocurrencies are sophisticated, complex investments that quickly fluctuate in value and risk major financial losses. Secondly, Bitcoin is neither subject to any form of oversight by any financial regulator nor supported by the safety net in the form of the Financial Services Compensation Scheme. Thirdly, the regulator appeared to advise members of the public when considering cryptocurrency investments to cautiously think through the implications because communication is often lacking. Customers are often not informed that it is in fact a financial product they are subscribing to and of the need to open a dedicated Bitcoin account with a cryptocurrency exchange.

BREACH OF THE RULES

Despite cryptocurrencies being unregulated in the same way as investments, the ASA found that Papa John's conduct in promoting Bitcoin breached the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing because the promotion of Luno using pizza encouraged customers to engage in high-risk investments and omitted to draw the customer's eye to the downside risks involved in using these financial products such as the serious and potentially costly financial decision and the intended audience who were likely to have limited knowledge of cryptocurrency. It found that Rule 1 requiring that 'marketing communications should be legal, decent, honest and truthful' and secondly, Rule 14.1 demanding that 'financial products offers must be easily understood by the audience being addressed'

WHAT IMPACT WILL IT HAVE ON THE LEGAL PROFESSION?

Lawyers should firstly be advising customers to consider their target market. Secondly, advising caution as their content may fall under the jurisdiction of the Competition Markets Authority and the Advertising Standards Authority regulations. Thirdly, ensuring that clients expressly communicate to their audiences that the messages published on their websites and social media channels are advertisements by adding a prominent label such as 'advert' or 'ad' to every post. Fourthly, businesses should ensure that their brands align with their values so they can partner with like minded businesses. Fifthly, lawyers should be working closely with their clients to review the current contracts with their respective suppliers. From an advertising and marketing perspective this is important because it may significantly reduce the impact of the message behind the advertisement if it is perceptively partnering with a business whose values are not aligned. If similar businesses follow this strategy by it will mitigate against the likelihood of being branded irresponsible by the Advertising Standards Authority, it will be better-placed to target a specific class of consumer and avoid stumbling into the realm of financial products.

ASSESSING FIRMS:

#AddleshawGoddard #BrabnersLLP #JMW Solicitors # PannoneCorporate #CentrefieldLLP #Gatelyplc #IrwinMitchell #Mills&Reeve #Weighmans #CounterculturePartnership LLP#FletcherSports #ManleysSolicitors #

SOURCES USED IN WRITING THIS ARTICLE:

[1] ASA Ruling on Papa John's (GB) Ltd t/a Papa John's Pizza, papa Johns - Advertising Standards Authority - 15 December 2021 - Papa John's (GB) Ltd - ASA | CAP

[2] UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) - 01 Compliance - Non-broadcast Code - ASA | CAP

[3] North Amy - ASA upholds complaint over Papa John's Bitcoin promotion - 15 December 2021 - ASA upholds complaint over Papa John's Bitcoin promotion | News | British Baker (bakeryinfo.co.uk)

[4] Rule 1 - UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) - 01 Compliance - ASA | CAP

[5] Rule 14 - UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) - 14 Financial products - ASA | CAP

[6] Influencer Marketing: Advertising And Marketing On Social Media In the UK - How brands can suffer reputational damage - Clifford Chance - Influencer Marketing: Advertising And Marketing On Social Media In The Uk (cliffordchance.com)