There seem to be two schools of thought when it comes to advertising in a recession. There are those who develop a clear strategy to ramp it up. And then there are others who buckle down and send what little advertising budget they have to the morgue.

According to Ad-ology Research, 97 percent of small business owners in the United States are concerned about the economy but, regardless, 60 percent plan to spend the same amount on advertising in 2009 as they did in 2008 and 26 percent plan to spend more.

Perhaps these businesses have been doing their research. A McGraw-Hill study found that during the economic downturn from 1980 to 1985, firms that advertised aggressively had sales that were 256 percent higher than companies that cut back. 

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If you are a small business owner that subscribes to the first school of thought – and marketing is likely one of the many hats you wear - it’s important to be aware of the various laws regarding common advertising claims. Creating an effective advertising strategy isn’t just about where and when ads are placed, but also what claims are being made.

Here are six examples of commonly used phrases and tactics in advertising that are often misleading when not used properly:

‘Free’

The word “free” may be used in advertising whenever the advertiser is offering an unconditional gift. If the shopper has to purchase an item in order to receive the free gift, the advertiser must clearly and conspicuously disclose the conditions. Also, an advertiser may not increase the price of the purchased item, nor decrease quantity or quality in conjunction with the free offer. Additionally, free offers should not be advertised when the item to be sold is customarily a negotiated-priced item such as an automobile or home.

‘Save up to…’

Price reduction claims that cover a range of products or services should state both the minimum and maximum savings without a misleading emphasis on the maximum savings. Also, the number of items available at the maximum savings should comprise typically 10 percent of the items being sold unless local or state law requires otherwise.

‘Lowest price in town…’

And similar phrases, such as “Our prices can’t be beat…”, can be extremely difficult to prove because prices for products and services flucturate regularly. Unless you can substantiate such claims, they should be avoided.

‘Best,’ ‘Most” and other superlatives

Superlative claims can be objective when they’re based on fact or subjective when they’re based on opinion. Objective claims relate to tangible qualities and performance which can be measured against accepted standards.

Obvious use of puffery, such as an advertiser stating they think they offer the best customer service in town, may not be subject to truth-in-advertising standards. However, advertising is all about trust from the consumer’s perspective and businesses should be vigilant against making subjective superlative claims that are misleading.

‘Factory direct’ or ‘Wholesale prices’

Claims such as these imply significant savings from prices being offered by other retailers. Claims such as “factory to you” or “factory direct” should not be used unless the advertiser actually manufactures the merchandise or owns the factory where the advertised products are made. Similarly, an advertiser cannot falsely claim to be a wholesaler, nor can an advertiser claim to offer “wholesale prices” or items “at cost” unless the items are being sold at the same price as would be purchased by a retailer for resale.

* asterisks

Asterisks can be used in advertising if they offer additional information about a word or term that is not inherently deceptive. However, an asterisk or similar reference symbol cannot be used as a means to contradict or substantially change the meaning of the statement. The information referenced by the asterisk should also be clearly and prominently disclosed.

For more guidance on advertising, see BBB’s Code of Advertising at: http://tucson.bbb.org/bbb-accreditation-advertising-code/.

Contact Kim States, president and CEO of the Better Business Bureau of Southern Arizona, at kstates@tucson.bbb.org or (520) 888-6161 or 1-800-696-2827 toll-free outside of Tucson.