So Much for Transparency; Candidates Leave Industry in Dark

Obama, Romney Have Little to Say About Marketing, Online Privacy

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Whether President Barack Obama or Mitt Romney reside in the White House next year will determine the fates of key issues for advertisers, and the industry is keenly watching for clues as to how.

Credit: Scott Eells/Bloomberg

But it's not exactly easy to form conclusions. Some issues cross party lines. Mr. Romney, perceived as pro-business, doesn't have a federal record of any kind to go on and declined to comment for this story. And while the Obama administration has a paper trail regarding marketing to kids and online privacy, it refused to answer questions about what it might do in a second term.

Adam Fetcher, spokesman for the Obama campaign, said, "they are simply not questions we can address," adding via email, "I don't really see the relevance to the campaign, and so I am declining a response."

One of the biggest issues that always seems to loom over the marketing industry is whether business will be able to continue to write off the cost of advertising as a tax deduction. It's survived for decades, but according to Dan Jaffe, exec VP-government relations for the Association of National Advertisers, both Mr. Obama and Mr. Romney will feel the pressure to come up with new revenue streams to shrink the deficit.

And the advertising deduction could become one of those targeted loopholes the candidates have mentioned during the debates.

It would be unwise, Mr. Jaffe said, "for advertising companies to think we are immune. We will not take anything for granted."

He pointed out that a Republican president, George H.W. Bush, was the last to put the tax deduction on the chopping block. A "major outcry" from the nation's big businesses saved the deduction at the time, Mr. Jaffe said.

But advertisers, lobbyists and others interested in these issues are trying to figure out what the next administration will bring.

On the issue of internet privacy, a Romney administration may be kinder to internet companies and advertisers, Mr. Jaffe said.

"The Romney camp has made it clear that they want fewer restrictions," he said.

President Obama has already issued a "Consumer Privacy Bill of Rights" that says consumers have the right to exercise control over what personal data is collected about them and how it is used. The Obama administration wants Google, Facebook, and other internet companies to sit down with privacy advocates to voluntarily develop codes of conduct. There may be more pressure in a second Obama term to go further.

But Mr. Jaffe said the privacy issue "does not fall neatly along partisan lines," including among members of Congress who would likely have to enact legislation to tighten controls on the collection of information.

"There are members of the Republican party who support greater restrictions," he said.

William Rice, president of the Web Marketing Association, is certain that a second Obama term would result in stricter controls on gathering personal information on the internet and that Mr. Romney would take a more "laissez-faire" approach toward the issue. "If President Obama is reelected, regulations on what advertisers can collect from websites will be severely restricted," he said.

Like Mr. Jaffe, Mr. Rice said the new Congress is likely to have the final say. "And unfortunately that 's something both sides of the aisle may support because it looks like it's consumer- friendly," Mr. Rice said.

Advertisers are also watching whether Google -- and perhaps other tech giants -- will be prosecuted for anti-trust violations.

The Federal Trade Commission is weighing action against Google. Its five commissioners -- three Democrats and two Republicans -- are considering a 100-page memo that supports suing Google for exploiting its dominance in the search engine world.

The FTC may also be considering taking action against Google for purportedly abusing patent protections to obstruct smartphones developed by rivals.

George Sidak, chairman of Criterion Economics and editor of the Journal of Competitive Law & Economics, said if Mr. Romney wins the White House, he may appoint a new FTC chairman, as well as antitrust officials at the Department of Justice "who are considerably more skeptical of bringing monopolization cases against high-tech companies."

Mr. Sidak has defended Google's practices and dominance of the market as a result of "the nature of competition."

Another big issue for advertisers is proposed restrictions on the marketing of certain foods considered high in calories and low in nutrition to children.

Grocery and soft-drink manufacturers have bristled at interagency reports and recommendations spurred on by the Obama administration's "junk-food ban."

Marketers were able to persuade lawmakers in Congress to put a halt to the implementation of those recommendations, and the issue is now at a standstill.

Margo Wootan, director of nutrition policy at the Center for Science in the Public Interest, said she hopes a soon-to-be-released FTC study on the impact of self-regulation by the food and soft-drink industry will revive the debate. "If Obama is reelected there could be a second push," she said.

And a Romney win?

"I don't see there being any efforts to address food marketing to kids in a Romney administration," Ms. Wootan said.

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