How Marketers Could Be Impacted by Today's Elections: Ad Taxes to Set-Top Boxes

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Hillary Clinton and Donald Trump would affect marketing differently in the White House, but industry executives say Mr. Trump's potential impact is harder to predict.
Hillary Clinton and Donald Trump would affect marketing differently in the White House, but industry executives say Mr. Trump's potential impact is harder to predict. Credit: Michael Nagle/Bloomberg, Daniel Acker/Bloomberg
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When asked whether marketers are worried about the results of today's presidential election, Dan Jaffe, who represents them in Washington, D.C., said, "I think everybody's worried about this election."

But there are tangible ways in which advertisers stand to be impacted by the election of a new president and a potential shift in congressional control; Republicans are expected to maintain control of the House, but the Democrats are seen as having a good chance of re-taking control of the Senate. The new president, for example, will select the chairmen of the Federal Trade Commission and the Federal Communications Commission, two agencies that make decisions that affect marketers.

FTC guidelines for consumer disclosures on native advertising have provoked "concern" from ad bodies including the Interactive Advertising Bureau. The FCC's vote last month to ban internet service providers from using and sharing certain consumer data unless people explicitly opt in promped loud complaints from the ad industry. And pay-TV companies and Republicans opposed Democratic FCC Commissioner Tom Wheeler's proposal to make pay-TV providers offer programming without a set-top box. That proposal that was shelved in September.

"The intersection of advertising, marketing, and politics is going to heat up in the next few months," said Mr. Jaffe, a Capitol Hill veteran who serves as group executive VP of government relations for the Association of National Advertisers.

The leadership of key congressional committees like the Senate Committee on Commerce, Science, and Transportation and House Energy and Commerce Committee could change, potentially having big implications for the ad industry.

The advertising industry, certainly, is not something that has come up in the presidential debates, so it's challenging to get a read on exactly what the presumptive nominees could do once in office.

Mr. Jaffe suggested that a President Clinton might try to eliminate the tax deduction now available to advertisers, as a means of generating more revenue to fund her programs. (The risk of losing tax deductions for ad spending, a perennial fear of the ANA, could also be increased or descreased by local election outcomes because many states have similar deductions of their own.)

But as a former U.S. senator from New York, Ms. Clinton's outlook is familiar to Mr. Jaffe, who said he's sure that she values advertising and advertisers. During her time in the Senate, Mr. Jaffe said, "She was fully aware of at least the economic importance and the job importance of advertising," he said.

"I think Hillary would probably continue on that same path that President Obama has been on," said Chris Pedigo, who represents the interests of ad-supported digital publishers in D.C. as senior VP-government affairs for association Digital Content Next.

Mr. Obama, he said, has pursued a "multi-stakeholder" approach -- in which all sides come to the table "to find common ground" -- in addressing privacy issues, as seen with the Consumer Privacy Bill of Rights Act. "I would expect more of the same from a Clinton Administration," Mr. Pedigo said in a followup email.

Donald Trump is seen as more of a wild card. A New York Times profile of Mr. Trump's campaign on Sunday included an interesting tidbit about the candidate's opinion of his campaign's ad spending. "Mr. Trump, who does not use a computer, rails against the campaign's expenditure of tens of millions on digital ads, skeptical that spots he never sees could have any effect," the Times reported.

Were Mr. Trump to be elected, Mr. Pedigo predicted that freedom of the press issues and potential libel challenges would become a bigger part of his docket. A Clinton victory would be less likely to shift the focus of digital publishers, he said.

But the advertising industry, Mr. Jaffe said, "does not align neatly or even closely along party lines," so it's not as simple as saying that one party's success tonight will have have clear consequences.

Industry donations
Mr. Jaffe, Interactive Advertising Bureau CEO Randall Rothenberg, 4A's exec VP-government relations Dick O'Brien, Xaxis Chairman David Moore, Interpublic Chairman Michael Roth and other advertising executives have all donated money this election cycle to Ad Alliance, a political action committee that has donated $38,500 to federal candidates. That money has been split between the parties, to the advantage of Republicans (62%) over Democrats (38%). In 2012, the PAC, known then as Professionals in Advertising Political Action Committee, gave far more money to Democrats (72%) than Republicans (28%).

The PAC did not give to any presidential campaign this cycle.

Both Mr. Jaffe and Mr. Pedigo described a Congress stymied by inaction. "The greater concern, I think, is that nothing changes," Mr. Jaffe said.

Mr. Pedigo, who is also a Hill veteran, said he's not expecting a new Congress to behave much differently, since the majority party in each house will likely have only a narrow majority, limiting what they can do.

"Congress is important, although it's pretty fair to say that they haven't done much in the last four to six years," he said.