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Judgment in Ikon court victory says TV ads’ effectiveness is ‘subjective opinion’

The judge who ruled in favour of Ikon Communications in its legal battle with former client, Advangen, rejected complaints about the agency’s TV ads because they are a matter of “subjective opinion” with no industry standard by which to measure their quality or effectiveness.

In his 44-page judgment handed down on Friday, Justice Michael Ball absolved the agency of any blame for the perceived failure of a marketing campaign for hair thinning product Evolis in 2015.

He ordered Advangen, owned by ASX-listed Cellmid, to pay Ikon $939,055 in outstanding fees, plus interest.

A claim for damages against Ikon was dismissed.

Justice Ball dismantled all of Advangen’s claims in his judgment, saying on more than one occasion it was “not to easy to understand Advangen’s complaints”.

On the most central of its claims – that of the TV ads – Advangen claimed the spots had “failed to meet the standard” and, according to its barrister John Kelly SC, were creatively more in keeping with Gone With The Wind than an ad for a hair thinning product.

Justice Ball dismissed the complaint, and the views of expert witness Jane Caro who opined that the ads did not adequately explain the product after a first script has been knocked back by regulators.

“The claim that the TVC did not meet the standard was based heavily on expert evidence give by Ms Caro,” Justice Ball said, adding that Caro had noted there was no creative brief and a “failure of Ikon and Advangen to reassess the TVC once the attitude of the regulators became known”.

Jane Caro: Told the court the ads were ineffective

Justice Ball said a creative brief would unlikely to have made any difference.

Ikon was plainly aware of the issues and what Advangen wanted to achieve and sought to address those matters in reformulating the TVC. No explanation is given of how a Creative Brief would have produced a different outcome,” he said.

The views that the ad was “ineffective” were also dismissed. Such an opinion was reached “with the benefit of hindsight”, he said.

“That opinion itself does not establish that the TVC fell short of some industry standard,” Justice Ball said, adding that Caro “does not point to any standard or research by which is it possible to measure or determine whether a particular TVC sufficiently communicates a message”.

The judge acknowledged that the “evocative and aspirational” elements of the ad had greater prominence. But he said that meant nothing.

“What is the relevant industry standard or practice that meant that the TVC fell short of what was required?” he said. “And why is it that the choice to emphasise the evocative and aspirational aspects….meant that the TVC fell short of that standard or practice? Nothing Ms Caro says assists in answering those questions.

“In my opinion…the question whether a particular advertisement is likely to work or not is very much a matter of subjective opinion.”

Justice Ball referred to the opinion of another expert witness, Colin Wilson-Brown, who had argued there “is no such thing as the right answer” and suggested that if 10 agencies were asked for the best approach “there will likely be 10 different responses”.

“No doubt that fact explains why is it particularly important for the advertising agency to obtain the client’s approval to the final TVC so that it can be satisfied that the TVC meets the client’s needs…..that is what Ikon did in this case,” he ruled

Elsewhere in his judgment, Justice Ball rejected Advangen’s central claims that Ikon had failed to deliver what it promised during ‘pre-contract representations’.

The company argued that Ikon had engaged in deceptive and misleading conduct by contravening Australian Consumer Law and of breaching the Services Agreement.

Specifically, Advangen said Ikon had failed to deliver the required increase in sales of $750,000, bought media for the wrong demographic, misrepresented conversion rates and failed to stitch together an integrated campaign through the late delivery of digital and social components.

Justice Ball said the pre-contract representations did not flout consumer law.

“It is plain that Ikon intended at the time the representations were made to design a coordinated media and communications strategy which would increase brand awareness and sales of the evolis product and that it had the appropriate expertise and experience to do so,” he concluded. “The fact, if it is a fact, that it did not achieve that goal does not make the representations misleading and deceptive at the time.”

The judgment said it was “plain from emails” that the sales targets were set by the client, not by Ikon. The agency, he said, “simply provided an analysis of whether that target was reasonable” based on the reach of the campaign and conversions.

While Advangen was targeting women aged 35+ in its TV advertising, “there is no OzTAM demographic of women aged 35 and older”, Justice Ball said.

He said Ikon made it clear to Advangen that its options were to either target the W35-54 market or W40+, with emails showing then general manager of Advangen, Emma Chen, went for  the latter.

While that occurred after Advangen had signed the Media buying Authority, Justice Ball said he did not accept that Advangen would have acted differently had it known the position before it signed the MBA.

“It is difficult to see how it could be said that Ikon did not have reasonable grounds for making the representations when it did precisely what it said it would do,” he said. “The fact that it bought advertising time by reference to a demographic that did not correspond precisely to its target demographic does not mean that it was not directing the advertising spend at the target demographic.

“It simply means that there were no available means of directing television advertising specifically at that demographic. Instead it chose the most appropriate demographic to achieve its aim.”

On the issue of conversion rates, the judgment found Ikon’s estimation of a conversion rate of 1% was “a prediction about conversions”, and not a “prediction about sales”.

Justice Ball said Ikon had made that clear, adding it was possible to predict the likelihood of a consumer taking “some action” in response to advertising, but not the “outcome of that action”.

That, he said, would depend on matters outside the control of the agency, such as product availability.

Turning to the alleged late delivery of digital and social elements, Justice Ball said he could find “no evidence” that was the case, ruling it was “not easy to understand Advangen’s complaints”.

There were problems with the evolis website, but that fell outside the remit of Ikon, he said.

Advangen parent Cellmid said it was “disappointed” with the judgment and “maintain its position that Ikon failed to provide the services agreed in the contract which, in the board’s view, caused the failure of the campaign.”

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