Just when you thought you could take a post-election breather from attack ads, here come the tax wars. This is normally a frenetic time of year for tax preparers like H&R Block, Intuit's TurboTax and Jackson Hewitt, which have fewer than four months until April 15 to convince customers their products and services are superior. And given the finite number of people who need their taxes prepared, the tried-and-true way to increase business is to steal market share from competitors. "That's what's been creating a more-intense marketing approach," said Jay Baer, founder and president of Convince & Convert, a social-media and content consultancy.
This year is especially aggressive, thanks to changes in tax laws in 2013, which makes the process more complex and raises the stakes for marketers who "think this is the year they can acquire new customers for life," Mr. Baer said. As a result, there has been name-calling and finger-pointing in ads that have landed some of the players in court.
Earlier this month, TurboTax went after H&R Block with two TV spots claiming that H&R Block's tax preparers aren't certified public accountants, but plumbers and clothing saleswomen who do tax preparation as a side job. H&R Block sued Intuit, alleging the ads infringed its trademarks and created the false impression that its tax preparers aren't real experts, but H&R Block's motion to withdraw the commercials was denied. "I can't recall a circumstance previously where these two companies have been this aggressive with comparison advertising," said Mr. Baer. "It feels like a political campaign." H&R Block ads for now have featured their tax preparers, the ones targeted by TurboTax, but the company will come out with response ads to the TurboTax attacks, according to a memo from H&R Block CEO Bill Cobb, obtained by PR Daily.
H&R Block's marketing and advertising spending increased 14.7% to $278.7 million in its 2012 fiscal year, which ended April 30, compared with the previous year, according to the company's regulatory filing. Although Intuit decreased advertising expenses to $151 million in its 2012 fiscal year, ended July 31, from $177 million in the previous year, it stepped up advertising and marketing spending on TurboTax, according to a company's regulatory filing.
Tax preparers are using all the tools in their marketing arsenal to increase market share, and social media is becoming just as important as running TV commercials. "[Social media] allows us to have a dialogue with our customers," said Mike Williams, senior VP-chief marketing officer at Jackson Hewitt Tax Service, in an email. "Clearly the social landscape is a great place for us to be sharing tax knowledge and information."
TurboTax declined to talk about its marketing strategy, citing the highly competitive environment in the heart of the tax season, as did Intuitive, which works with Intuit on media planning and buying. But Julie Miller, director of PR and social media for Intuit's TurboTax, said in an email that the message "plays out across online and offline media, social, TurboTax.com, PR ... all across the funnel."
H&R Block and Fallon, its agency, weren't available for comment. Agency 360i, which works with H&R Block on social media, also declined to comment.
Even the Internal Revenue Service has been ramping up its use of social media this tax season. It officially launched a Tumblr account Jan. 29, in addition to an existing presence on Facebook, multiple YouTube channels and Twitter. "We have a diverse audience we're trying to reach, and our focus is really on helping taxpayers and getting useful information out to them," said Terry Lemons, communications director for the IRS. The IRS also works in concert with the tax industry, sharing videos with tax preparers, for example. "We couldn't do it without the help of tax preparers," Mr. Lemons said. "For us, it's a symbiotic relationship."
A very different kind of relationship than those vying to dominate the tax-preparation space, indeed.
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