What Does the Election Mean for Marketers?

Democrats seized control of both houses of Congress this week, giving them the power to chair hearings and set the agenda for the 110th Congress.

What does that mean for the marketing community? Most of our controversial issues do not break down along partisan lines, so in many ways, the election of a new Congress means the continuance or acceleration of existing issues.

For example, the scrutiny on direct-to-consumer prescription drug advertising will continue. Prominent members of Congress from both sides of the aisle have proposed taxes or restrictions on DTC advertising. That battle is likely to continue and intensify. Congressman “Pete” Stark has focused on these issues and is likely to be the Chairman of the Health Subcommittee of the House Ways and Means Committee. Congressman John Dingell, who is expected to return to the Chairmanship of the House Energy and Commerce Committee, has stated that DTC advertising will be one of the issues on the agenda of that committee.

Food marketing to children will remain controversial. One of industry’s most vocal critics, Senator Tom Harkin (D-IA), is likely to be Chairman of the Senate Agriculture Committee and remain a senior member of the Senate Health, Education, Labor and Pensions Committee (HELP Committee), giving him a powerful forum for attacking any food marketing to children he finds inappropriate.

Children’s marketing in general will also remain controversial. A bipartisan group of Senators -- Joe Lieberman (D-CT); Hillary Rodham Clinton (D-NY); Sam Brownback (R-KS); and Rick Santorum (R-PA) – have pushed for legislation to study the impact of media and marketing on the development of children (the CAMRA Act). Senator Brownback recently announced a joint working group with several FCC Commissioners to look at these issues. Although Senator Santorum was defeated, the remaining cosponsors will almost certainly push the CAMRA Act again in the next Congress.

Also, Senators John Rockefeller (D-WV) and Mark Pryor (D-AR) have pushed for restrictions on interactive children’s marketing as part of the Senate telecom reform bill. Those issues will be back next year in the Congress and at the FCC, where several Commissioners have called for major restrictions on any interactivity between commercials during children’s programs and commercial websites.

Consumer privacy issues will continue to receive considerable bipartisan attention next year. Senator Hillary Rodham Clinton (D-NY) introduced a major consumer privacy bill this fall and campaigned for re-election on privacy issues. Congressman Joe Barton (R-TX), who will now be the ranking Republican on the House Energy and Commerce Committee, has stated that privacy legislation is a top priority for him. Congressman Ed Markey (D-MA), who is likely to be a subcommittee Chairman at Energy and Commerce, has also focused on these issues in the past. There were numerous bills and hearings this year on data breaches, spyware and other information collection practices, both online and offline. Also, many members of Congress used more micro-targeting technology in their election campaigns. This experience makes them more familiar with the volumes of information about consumers that is available in the marketplace and the value of this information for effective advertising.

There may also be more pressure for restrictions on the full deductibility of advertising costs. Continuing deficits, the growing national debt, the costs of the war in Iraq and bipartisan pressure for greater fiscal responsibility may lead to the reinstitution of the pay as you go or “paygo” policy. This development could lead lawmakers to look at various new revenue sources. Whenever that happens, advertising tax deductibility often is near the top of the potential target list.

The shift in party control of the House and Senate will bring new committee leadership.

At the Senate Commerce Committee, the chair’s gavel will be passed from Senator Ted Stevens (R-AK) to Senator Daniel Inouye (D-HI). Both members work closely together so there will not likely be major changes in the committee’s operations. There may be several vacancies on the committee, since Senators Conrad Burns (R-MT) and George Allen (R-VA) lost their re-election campaigns. Senator Burns came from the broadcasting industry and both were generally supportive of the marketing community.

Senator Ted Kennedy will likely be the new Chair of the Senate HELP Committee. In the past, he has been critical of DTC advertising as well as tobacco and alcohol beverage advertising. The marketing community has worked closely with the current Chairman, Senator Mike Enzi (R-WY), who will become the ranking Republican member of the committee.

At the Senate Finance Committee, Senator Max Baucus (D-MT) will likely be the new Chairman and Senator Chuck Grassley (R-IA) the ranking Republican. The marketing community has a good working relationship with both members.

On the House side, as previously stated, Congressman John Dingell (D-MI) will likely be the new Chairman of the Energy and Commerce Committee, with Congressman Joe Barton (R-TX) as the ranking Republican. At the Ways and Means Committee, Congressman Charlie Rangel (D-NY) will likely be the Chair. Congressman Rangel has always been aware of the importance of the ad community to the national economy. Several more senior Republicans on the committee lost their re-election campaigns, so the ranking Republican on Ways and Means will likely be Congressman Jim McCrery (R-LA).

The close partisan breakdown in the Senate (51 Democrats and 49 Republicans) and the need to build a coalition of 60 votes to avoid a filibuster gives each individual Senator more bargaining power. Thus, someone like Senator Joe Lieberman, who has been very active on media content issues, has more leverage to get his bills moved through the legislative process.

Since most of our issues do not break down along partisan lines, ANA will continue our efforts to work with members of both parties to protect the interests of marketers. We will continue to stress the findings of the Global Insight report on the economic impact of advertising on our nation’s economy. That report found that advertising produces more than $5 trillion in economic activity annually and is responsible for more than 15% of all American jobs. That’s a positive message about the importance of advertising to our economy.