UntitledThe Council of Better Business Bureau’s National Advertising Division (NAD) has recommended that, as a result of a complaint filed by Expedia, two online travel sites change several aspects of their search engine marketing (SEM) to avoid misleading consumers.  While SEM is a common and long-standing practice, the NAD’s decision emphasizes that there are still emerging issues that companies engaged in this type of marketing should observe.

Expedia’s Challenges

Expedia filed a challenge with the NAD alleging that the SEM practices of Fareportal Inc., the operator of travel sites CheapOair.com and OneTravel.com, were misleading.

First, Expedia challenged Fareportal’s practice of advertising what appeared to be low fares from a specific origin to a destination identified in a consumer search query, but that actually were less expensive flights from a different origin. For example, if a consumer searched on Google or another search engine for “flights from Miami to Houston,” a resulting Fareportal ad might state “Houston $149 Airfares” even if that fare was for a flight from an originating city other than Miami. Expedia contended that this practice was misleading.

Second, Expedia challenged certain “discounts” and “savings” claims made in Fareportal’s SEM advertising, such as Fareportal’s claim that consumers could “Save up to $15 OFF fees.” Expedia argued that these offers were misleading because Fareportal failed to disclose that the discounts were actually a “reduction” on its otherwise high booking fees, and contended that it was inadequate for Fareportal to explain the terms of these offers on its websites’ landing pages. In support of its argument, Expedia cited The Federal Trade Commission’s (FTC) Dot Com Disclosures, which provide that “if a particular platform does not provide an opportunity to make clear and conspicuous disclosures, then that platform should not be used to disseminate advertisements that require disclosures.”

Finally, Expedia challenged Fareportal’s “Best Price Guarantee,” arguing that Fareportal did not offer the “best price,” but only a refund if consumers could locate a lower price, and that Fareportal did not note the material limits and conditions in “immediate proximity” to its guarantee.

NAD’s Decision

The NAD determined that a consumer who searches for a flight between a specific origin and destination and then is served an ad with a price to the searched destination could reasonably conclude that the advertised price is for a flight from the searched origin to the searched destination. Accordingly, the NAD recommended that Fareportal discontinue displaying specific prices for flights to a destination in response to consumer searches when the specified price is not available for the origin and destination searched. With respect to Expedia’s challenge to Fareportal’s ads for fee “discounts” and “savings,” the NAD recommended that Fareportal “more clearly and conspicuously disclose that the discount is limited to the cost of the booking fee.”

Finally, the NAD noted that Fareportal’s “Best Price Guarantee,” which provides a guarantee to consumers who find a lower fare within 24 hours after booking with Fareportal, gave Fareportal, not the consumer, the option of refunding the price difference or refunding the entire ticket price. The NAD explained that airfare prices can change quickly in the online travel market, and that an offer to refund a consumer’s ticket price may not provide the consumer with the benefit of the guarantee, which is the ability to purchase a lower priced ticket. Therefore, the NAD recommended that Fareportal discontinue its “Best Price Guarantee” claim or modify its terms so that consumers, at their option, can receive either a full refund or require Fareportal to match the lower price.

The Way I See It:

  • The NAD’s decision is a reminder to advertisers and agencies that SEM advertising campaigns, as with other advertising, should avoid the potential for consumer confusion, or risk being challenged by competitors or others.
  • Given the FTC’s continued focus on clear and conspicuous online disclosures, when a reasonable interpretation of a specific SEM advertising claim can be found to be misleading, the advertiser may have crossed the line.