Ad taxes are a really bad idea. Studies by Wharton Econometrics Forecasting Associates show that a tax on advertising reduces local employment and personal income by substantial amounts. When the cost of advertising goes up, there is less advertising, which leads to less consumer demand. This slows the economy in general, reducing its usefulness to the government as a source of revenue.
Furthermore, ad taxes are complex and expensive to administer, and they hurt local businesses, which depend on cooperative advertising dollars from national manufacturers.
Arizona, Iowa and Florida all passed advertising taxes. Each state later repealed the tax because it hurt the local economy and was impossible to administer. Since 1987, when the Florida services tax was repealed, advertising taxes have been considered in 40 states and rejected each time. The Association of National Advertisers, a founding member of the State Advertising Coalition, is working with Texas broadcasters, newspaper publishers and other industry groups to oppose the state's ill-conceived tax on advertising.
The advertising community must let Texas know just how much damage this tax will inflict or the momentum behind this legislation will continue to flourish.
Association of National Advertisers
Wake up call for sponsors
Re: "Amex develops ad plan to riff off sponsorships" (AA, April 21). This article about American Express' reinvigorated relationship with the National Basketball Association should be a great wake-up call to all corporate sponsors.
American Express, no doubt, has very smart marketers, but the thought that they are just now, after eight years (at an estimated $20 million per year), realizing that they should actually activate their NBA sponsorship is amazing.
But it is not surprising. In fact, it confirms again what a lot sponsorship industry veterans have known for a long time-that many corporate sponsors, regardless of size, do not understand how sponsorship works and why.
Sponsorship is a marketing platform, not a tactic. As American Express' experience clearly shows, a sponsorship, even one as strong as the NBA, will not, by itself, sell a company's product. An "Official Card" designation and a few arena signs are just not that compelling.
Like any platform, for a sponsorship to be effective, it must be leveraged by as many tools as possible: advertising, PR, promotion, interactive, hospitality, etc., whatever it takes to drill down to the target audience and turn them into buyers. Cheers to David Stern for helping American Express, and I hope many other sponsors, realize this fact.
Companies can learn a valuable and inexpensive lesson from American Express: Sponsorship is powerful, high profile and exciting, but it is by no means easy or cheap. Common sense suggests companies should understand the sponsorship business before they become a sponsor. Alternatively, they should hire (and listen to) experienced sponsorship-specific people or agencies to guide them. I think it's fair to say that most companies cannot afford to spend years and millions of dollars on sponsorship before they try to figure out how to make it work for them.
Sponsor's Edge Training and Consulting
See related story on P. 29.
TV ad pioneer Stan Lomas dead
On May 4, the world lost a true gentleman and an advertising legend, Stanley Lomas. At age 90, Stan's life was filled with a joy and compassion that was unparalleled. Never one to boast, Stan's creative contributions touched everyone, literally. Stan created the ad slogan, "Reach out and touch someone" for AT&T.
A true pioneer and visionary, in 1947, when TV was in its infancy, Stan was promoted to VP-TV production for William Esty Co. in New York, writing and producing national TV commercials. Stan went on to write, direct or produce more than 200 TV commercials-some starring John Wayne, William Holden and Mickey Mantle-for clients that included R. J. Reynolds Tobaccco Co., Coca-Cola Co., Texaco, Colgate-Palmolive Co. and General Mills. A videotape compilation of these black-and-white commercials forms the Stanley Lomas Collection at the Smithsonian Institution's National Museum of American History in Washington. Stan donated his TV commercials to the Smithsonian for the world to share.
After retiring to Hendersonville, Tenn., in 1991, Stan studied art and produced many portraits and landscape paintings in oil and in his favorite medium, watercolors. Receiving a thank you note from Stan was always a special thrill: Stan hand-painted his own greeting cards. His artwork survives in homes, hospitals, churches, art galleries and on the Internet. The world's loss is truly Heaven's benefit.
In a 1982 letter to Advertising Age, Mr. Lomas wrote that he created the famous AT&T ad line (which he said originally was "Reach out and touch someone far away") based on a strategy study for AT&T that he developed jointly with Joe Viladas in 1975.
* In `"Journal' gets wine, women and color" (April 28, P. S-1), it was reported that the average Wall Street Journal reader spends 14 to 17 minutes reading the paper. The Journal later clarified that that figure referred to time spent reading its "Personal Journal" section and that the average time spent reading the Journal was 52 minutes, according to a subscriber survey.