Two ‘commisery’ TV adverts for Purplebricks must not be broadcast again in their original form after the advertising watchdog ruled that they did not make it sufficiently clear that sellers pay a fee whether their property sells or not.
The Advertising Standards Authority said the fact that the fee was always payable was material information which would allow consumers to make an informed decision about using Purplebricks. It described the original advertising as “misleading”.
Purplebricks will now have to ensure that it points out that the fee must always be paid in all future advertising which compares its offering to other fee models.
This morning, in a statement issued to the London Stock Exchange, Purplebricks made it clear that the ‘commisery’ campaign has already been updated and will continue.
However, Purplebricks CEO Michael Bruce expressed astonishment at the ASA’s ruling, saying Purplebricks is “far more transparent” than high street agents who do not publish their rates.
He said: “We are surprised by the ASA judgement on the flat fee wording because prior to air, our adverts went through the proper approvals process, including the official clearance body Clearcast who have continued to support their original judgement with the ASA.
“Purplebricks is firmly on the side of the consumer, offering an alternative to the commission based model. As a leader of industry change some noise is inevitable.
“Purplebricks is committed to increasing levels of transparency within the industry, publishing its fixed fee rates on the home page of its website so all consumers from the outset have certainty as to the cost of selling.
“Purplebricks is far more transparent than traditional estate agents who do not typically publish their rates, allowing them to charge much greater and varying fees dependent upon a customer’s ability or capacity to negotiate.”
The ASA received 38 complaints about two ‘commisery’ adverts.
The complaints included one from Oakhill Estate Agents and another from aspiring trade body CIELA (the Charter for Independent Estate and Letting Agents).
Two issues were investigated, of which one was upheld and the other not upheld.
The complaint not upheld was that the adverts misled people into believing Purplebricks would sell their home for free. The ASA said consumers were sophisticated enough to realise that the service would not be free.
The complaint that was upheld centred around the comparison between Purplebricks’ fee and the commission charged by other agents.
The complaints were prompted by two TV adverts seen in March.
One featured two couples discussing the sale of a property.
The younger woman said, “We sold the house”, to which the older man replied, “That’s great. Simon, did you sell with Purplebricks?”
Simon asked: “They are just online aren’t they?” The older man answered: “No, no, they are proper estate agents, you just don’t pay commission.” Simon said: “No commission. Oh. One minute, please.” He then got up from his seat and placed his head in a cupboard and screamed loudly.
The voice-over stated: “Ah, commisery: the misery you feel when you spent thousands on commission but got nothing more for your money. Save yourself from commisery at purplebricks.com.”
On-screen text displayed during the ad stated: “Viewing service costs extra. Saving based on Purplebricks flat fee vs using a high street estate agent …”
The second TV ad was set in a kitchen with two women at a table. The first woman asked: “So you must be happy you’ve sold the house?” The second woman replied: “Yeah, it’s exciting.”
The first woman asked: “Did you use Purplebricks?” to which the second woman responded: “Aren’t they just online?” The first woman answered: “No, they’re proper estate agents, they’re real people. They just don’t charge commission.”
The first woman then dropped her face into a cake. The voice-over stated: “Ah, commisery: the misery you feel when you spent thousands on commission but got nothing more for your money.”
On-screen text displayed during the advert again stated: “Viewing service costs extra. Saving based on Purplebricks flat fee vs using a high street estate agent …”
Purplebricks told the ASA that consumers would understand the difference between a flat fee and a commission, and would understand the service was not free. It said that the ads simply highlighted that there was a different fee model using a high street estate agent.
A total of 37 complainants challenged whether the adverts misleadingly implied that Purplebricks did not charge a fee.
The ASA said that on this point the advert was not misleading: consumers would understand that Purplebricks was a commercial business and would charge for its services.
However, on the second issue, the ASA said that consumers might not always understand that the fee was payable, regardless of whether the property sold or not.
The ASA said that the advertising was misleading.
It said: “We acknowledged Purplebricks intended to highlight that they did not charge a commission but instead charged a flat fee. However, we considered that flat-fee payments were relatively new in the housing market.
“Further we considered because of how infrequently consumers sold their properties, the average consumer was likely to be more familiar with the traditional commission-based model. We considered that it was not sufficiently clear in the ads that the fee payable to Purplebricks was not conditional on the sale of the property and therefore concluded that the ad was misleading.”
It has told Purplebricks to ensure that when making a comparison to other fee models in its adverts, it must make it clear that the flat fee is always payable.
Purplebricks this morning said the adverts had already been updated “to make this even clearer”.
Its statement went on: “The new wording has been approved by Clearcast. While the new text has only been aired for a couple of days, there has been no noticeable impact on the business.
“Purplebricks would like to make clear that it now has a proactive, regular and positive dialogue with the ASA and all other relevant professional bodies. The TV adverts followed the proper approvals process, being cleared by industry body Clearcast who, unlike the ASA, have the role of giving prior approval to TV adverts. No issues were raised.”
City analyst Anthony Codling of Jefferies this morning said: “Purplebricks has been instructed by the regulator to make clear in its adverts that its fee is payable whether or not they sell your home.
“This once again raises our favourite question ‘How many homes does Purplebricks sell?’
“So far Purplebricks has always chosen not to answer this question, despite the fact that according to CEO Michael Bruce “Purplebricks is firmly on the side of the consumer”. A
“s Purplebricks is committed to increasing levels of transparency, we look forward to it adding its completed sales statistics to its adverts to help its consumers make a fully informed choice between paying Purplebricks irrespective of success or paying a traditional agent only if they are successful.”
The witty ‘commisery’ adverts have been widely acclaimed even by critics of Purplebricks. Versions of ‘commisery’ are also showing in Purplebricks’ US and Australian TV campaigns.