Trade Groups Tracking 'High-Intensity Storms' in Current Congressional Session

Food, Privacy, Tax Deductions and Tobacco Top the List

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With Congress is back in session (between fall holidays), advertising groups are ramping up their efforts to fight existing and impending marketing regulations. Here are the issues, in order of importance, that are top of mind for industry trade groups on the Hill:

1. Food-and-beverage marketing to children: Two years ago, four government agencies proposed voluntary rules on marketing products that don't meet nutritional criteria, as well as regulations that would broaden the definition of "child," raising the top end of the age group from 12 to 18. After numerous delays in finalizing the voluntary guidelines, organizations such as the Association of National Advertisers, the American Advertising Federation and the American Association of Advertising Agencies see the threat of government pressure on companies and media as more immediate. Michelle Obama's "Let's Move" campaign to fight childhood obesity is also casting light on the issue in the government and among the general public.

Dan Jaffe
Dan Jaffe Credit: ANA

Dan Jaffe, exec-VP at ANA, says that based on the organization's own research, with the new voluntary regulations 88 of the 100 most consumed foods in the country wouldn't make the cut for marketing to children, and it'll likely get worse in five years when the sodium standard goes up. Whether the government needs institute voluntary guidelines is up in the air, added Clark Rector, exec-VP of government affairs at AAF, pointing out that by doing so, the government is all but rendering the "voluntary" aspect meaningless. "Regulation by coercion puts companies in a very difficult position. Food companies have to decide if they're not going to go by voluntary regulations," what kind of risk it puts them in with broadcasters or with the public interest, he says.

In response, the ANA created The Sensible Food Policy Coalition and website. "The coalition is new this year. We're facing a more serious challenge. Our concerns were being dismissed and we felt we needed to try to raise the decibel levels and spotlight," says Mr. Jaffe. The group is arguing that proposed data doesn't suggest that regulations will help the public health or obesity cause.

2. Privacy concerns: Privacy concerns related to online behavioral targeting have the Federal Trade Commission up in arms and the marketing organizations rushing to prove to lawmakers that the industry can self-regulate. Last October, a number of organizations, as part of the Digital Advertising Alliance, put forth a coalition called The Self-Regulatory Program for Online Behavioral Advertising. The coalition developed an icon for companies to use and indicate that they're maintaining certain practices in monitoring online behavior, including an opt-out option. Despite what the alliance might deem success -- Mr. Jaffe says that the more than 3 trillion ads have used the icon, and following a recent meeting with the FTC he "sensed a positive feeling from them, seeing the icon themselves" -- the organizations are preparing for the possibility of tighter regulation. While people may be seeing the icon, according to one count, only 500,000 people have actually opted out (which isn't necessarily a bad thing for the marketing industry). Upcoming hearings and members of Congress calling for legislation -- there are 14 bills on the hill, says Mr. Jaffe -- will put the coalition's efforts to the test .

3. Tax deductions for advertising: The industry is keeping an eye on the pending debt reduction deadlines later this year, with the possibility that the government could change the tax deductibility of advertising for certain products, especially prescription drugs. "There have been proposals in the past," explains Mr. Rector. "There's nothing on the table now, but with talk of a deficit reduction and the possibility of reforming the tax code we're always aware and we'll keep a close eye on it."

His team will continue to build relationships with members of Congress, especially in the tax-writing committees, and promote a recently updated, 10-year-old study that shows the value of advertising to the economy.

4. Tobacco: The tobacco debate is getting little mainstream attention, explains Mr. Jaffe, but it's facing another round of reviews in the courts since Congress passed what he refers to as "the most restrictive piece of advertising legislation in the history of this country." The debate is largely around graphic warning labels and language the government says it will impose on the tobacco companies by spring 2012.

ANA brought the issue to the district court level and won at the Court of Appeals where the organization will continue to weigh in on the graphic labeling. Going forward, the organizations that oppose the new disclosures are up against people who will say that tobacco is different from other products. Last month, the ANA filed a friend of court brief as part of a lawsuit against the FDA by six tobacco companies. The group is arguing the case on first-amendment grounds.

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Overall, said Dick O' Brien, exec-VP of government relations at 4A's, "We're working on a number of major issues in Washington that are breaking simultaneously -- ranging from privacy in the era of online advertising to the proper way to advertise food and beverages to children to the need to preserve the deductibility of advertising as a business expense in the corporate tax code. We've rarely had so many high intensity storms brewing at the same time."

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