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A new sector of communications is spreading beyond the nation's capital, three years after advertising best exemplified by the "Harry & Louise" TV spot that helped turn the tide against President Clinton's healthcare plan.

Industries that for years relied on public relations and traditional lobbying for public-policy goals are now using advertising to raise a favorite issue's visibility, to woo key lawmakers and to help set the government's agenda.

In turn, that is setting off something of a frenzy as ad agencies that specialize in local issue-oriented ads join with political ad consultancies and corporate public relations shops in competing for the new business.

"The real change here is that people have begun to recognize the importance of speaking to the constituents," said Ben Goddard, whose Goddard-Claussen shop in Malibu, Calif., and Washington, created the multi-city "Harry & Louise" for the Health Insurance Association of America.

"You can't do that with a narrow Washington campaign; you are talking to people who have already made up their mind," he said.

Some observers cite other reasons.


"Five years ago, there was a Republican White House, and groups and companies may have felt they had adequate access," said Marc Rosenberg, sales manager of corporate and public policy advertising for The Washington Post. "Now, with a divided leadership, groups that used to think of themselves as secure have to reach out and be more comprehensive.

"When you have absence of consensus, this kind of advertising tries to fill the void," he said.

New ethics policies also have served as nutrients for the trend.

John Stewart, senior VP of National Media, Alexandria, Va., and head of the media buying unit of National Media, which started as a political ad shop, points to the new restrictions on lobbying.

"It's harder to lobby in a traditional sense," he said. "You can't take somebody to a ball game -- it's too much of a gift. So a lot of traditional ways of lobbying [are] harder to do with the gift ban."

Committee chairmen are exerting less power in Washington, said Bob Pipkin, VP of Fleishman-Hillard, and winning an issue on its merits in a legislator's district becomes more important.

"I see the public relations and the advertising as the air power, but trade lobbyists as the ground troops," he said.


Whatever the reasons, the change is dramatic. The occasional print ads aimed at opinion leaders or legislators in Congressional Quarterly, National Journal, Roll Call or The Washington Post as part of a lobbying campaign have turned into much more sophisticated efforts.

Such ads regularly run in media outside Washington, often aimed at consumers. Regularly, media include broadcast as well as print. Even when campaigns run only in Washington, the spending level is far higher.

"What corporations are beginning to see is that advertising sets a context to prepare the ground for a lobbyist's visit," said Craig James, president of Washington-based PR shop Powell Tate's advertising group. "You have got to get a critical mass of the public interested to get on any politician's radar screen."

Mr. Stewart said corporations now regularly include advertising dollars in their lobbying budgets.

"In D.C. budgeting, it used to be there was 'X' amount of dollars for lobbying and staff," he said. "Now they are budgeting for advertising."

The amount of new spending isn't easy to quantify. Except for CNN, most radio and TV networks bar issue or advocacy advertising, so ads have to be placed with individual stations. Few media tracking services separate a company's public-policy spending from corporate image or any other type of advertising, or split election-related ads from spending on issues unrelated to elections.

Further, in several recent examples -- notably Enron Corp.'s ads urging Pennsylvania's Public Utilities Commission to let it compete against local utilities -- corporate-image ads are public-policy ads.


But the media, media buyers and PR shops all point to major spending increases.

Mr. Rosenberg said The Washington Post saw spending on issue advertising double over the last four years, even though causes and advertisers changed drastically from quarter to quarter.

Based on the Post's rate card, in recent weeks Northwest Airlines spent in excess of $500,000 buying page ads urging the U.S. to stand firm on airline treaty negotiations with Japan.

"You reach a lot of people that you could never reach through lobbying," said Elliott Seiden, VP-law and government affairs for Northwest Airlines, describing the airline's ad campaign as complementary to direct lobbying. "There are a lot of people who call up their congressmen, who write their congressmen. For those offices where we are going to meet with people that have read our ad, we are in a position to help apprise them of the issue before we walk in the door."

National Media has made a business out of the increased expenditures, going after corporations and groups that require the heightened activity usually seen during the last days of a political campaign -- policy developments at 10 a.m.; a media plan by 3 p.m.; an ad aired that night or the next day.

It's a turnaround time traditional media buying finds difficult.

Mr. Stewart said $60 million was spent in 1996 by the telephone companies, and $12 million to $18 million was spent on tort reform by trial-lawyer groups in 1995.

He estimates MCI Communications Corp. is spending $6 million annually and AT&T Corp. about $2 million on issue advertising.

Other issues getting advertised this year are utility deregulation, global warming and fast-track authority for treaty approval. All have fueled ads from unions, associations and others.


Next year, such spending should increase. The National Journal recently reported that the American Insurance Association, the Business Roundtable, the Federation of Independent Business and the National Retail Federation have plans to fund advocacy advertising. And a coalition of 33 business groups that recently formed the Coalition: Americans Working for Real Change has similar plans.

The U.S. Chamber of Commerce is readying a campaign over tort liability issues, anticipating lawyers' groups mounting their own campaigns.

A big chunk of 1998 spending, of course, will be election-related.

Some of the issue-oriented advertising is coming from traditional ad agencies. Ogilvy & Mather, New York, handles Enron's advocacy ads as well as its consumer branding campaign, and Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, handles some of MCI's efforts.

The battle for business also is starting to produce some realignments.

Mike Murphy, a top Republican ad executive and senior partner of Murphy Pintak Gauthier Hudome, Alexandria, Va., recently formed a partnership with Shandwick Public Affairs called Shandwick/Murphy, to go after some of the new business.

Mr. Murphy cited the merging of advertising and public relations functions as the reason for the deal.

Kamber Group, best known for its lobbying and PR, announced an affiliation with Allied Power Marketing, Alexandria, Va., to go after utilities business.

Fleishman-Hillard, which currently handles Americans for Affordable Energy through various alliances, expects to start calling on sister units under its new Omnicom Group holding company for advertising expertise.

Other shops that have stepped into the field include Smith & Harroff, Alexandria, Va.; and Greer Margolis Mitchell Burns & Associates and Squier Knapp Ochs, both Washington.


"Once upon a time, party bosses determined who would be elected and now it's the tube," said Carter Eskew, a political adman whose shop merged with Bozell to create Bozell/Eskew, Washington, three years ago. "Issues are now following the same track."

While advertising does serve lobbying goals, raises a company's profile and brings issues to the fore, even ad experts know it doesn't do everything.

"We don't think [advertising] eliminates the traditional lobbyist," said Carolyn Tieger, exec VP-general manager for Goddard-Claussen's Washington office. "There

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