INCOME TAX PREPARERS BATTLE RISING COMPUTER COMPETITION;WHILE $45 MIL WILL GO INTO ADS, SERVICES ARE ALSO EYEING HIGH-TECH

By Published on .

More consumers than ever are turning to their home computers rather than their accountants. That adds up to new marketing challenges for H&R Block, Jackson Hewitt Tax Service and the regional preparers who spend a total of $45 million on advertising during tax season.

To meet consumers on this new turf, H&R Block today begins airing network TV commercials from lame-duck agency Bernstein-Rein, Kansas City, Mo., tagged with promotions for its new World Wide Web site (http://www.handrblock.com). In turn, that site promotes Online BlockCheck, a new $9.95 tax-checking service on H&R Block-owned CompuServe.

SEEKING FIRST-TIMERS

BlockCheck, also launched this year at H&R Block's 9,000 offices, was designed specifically to bring in first-time users of its services, the company's new marketing mission.

"Most people currently using the Internet tend to be upscale, and they represent markets we haven't penetrated. Reaching out to these users is a way for us to make inroads to people who haven't previously used H&R Block," said Fred Halfpap, the company's recently appointed director of online marketing.

Despite running its estimated $20 million campaign at full tilt between now and the April 15 tax deadline, H&R Block has seen its growth slow in recent years and recently put its account into review.

Bernstein-Rein declined to participate, but Leo Burnett USA, DDB Needham Worldwide and Young & Rubicam, all Chicago; Campbell Mithun Esty, Minneapolis; and Publicis/Bloom, Dallas, are giving it a go.

A decision is expected in April.

Jackson Hewitt also has been hitting the airwaves hard with a network and spot TV campaign, created in-house and aimed at spurring a 5% increase in tax filings over the 604,000 it processed last year.

HEWITT WEB SITE

Jackson Hewitt added a Web site last year, (http://www.infi.net/;jhewitt) which it promotes in direct mail and print ads. But it doesn't offer tax computation or other services through the site or on any online services, said Martha O'Gorman, director of communications.

Both companies profit heavily from offering short-term loans to taxpayers against money due them from the Internal Revenue Service, but their core business remains tax preparation.

The IRS says "just under 50%" of Americans use a professional tax preparation service, down slightly from 1990.

ELECTRONIC FILING UP

Last week, the IRS said it expects the number of people using electronic and automated telephone channels for filing taxes to increase 36% this year, to 16.1 million out of a total of 118 million total tax returns filed. Many of the new systems require a minimum of professional assistance.

Also gaining in popularity is do-it-yourself software such as Intuit's TurboTax and Block's own Tax Cut.

The IRS, which now requires consumers to go through a professional tax preparer to file electronically, is exploring ways to let people file to the IRS directly via home computer modem in 1997.

"It's under discussion, and there has been no final decision about letting consumers file directly to the IRS," an IRS spokesman said, noting that both consumers and the IRS prefer faster, paperless filing methods.

1040EZ BY PHONE

More than 3 million are expected to file 1040EZ forms through a new automated phone system that does the math, the IRS spokesman said. If it's successful, that program will be expanded.

Block recently announced plans to spin off CompuServe in April; meanwhile, the company plans to evaluate its tax preparation marketing efforts on that online service, "continuing those that make good business sense," Mr. Halfpap said.

In this article:
Most Popular