On Thursday, five ad industry trade associations released a joint statement urging Michigan Governor Gretchen Whitmer to retract a portion of a new executive order that prohibits large retailers from advertising nonessential items and property owners from advertising short-term rentals.
The Association of Advertising Agencies (4A’s), the American Advertising Federation (AAF), Association of National Advertisers (ANA), Interactive Advertising Bureau (IAB) and Network Advertising Initiative (NAI) say the ad ban violates free speech, does nothing to help public health and could further hurt the economy.
“In arbitrarily prohibiting advertising by large retailers and rental property owners, the order violates a fundamental tenant of the U.S. Constitution's guarantee of free speech by targeting specific speakers based on what they want to say,” reads the letter.
The Michigan executive order was issued on April 9, 2020, and is slated to last for the rest of the month. The order is meant to slow the spread of COVID-19 by requiring residents to stay at home and keep nonessential businesses closed.
The trade associations are specifically addressing sections 11 and 12 of the order which prohibit two groups—large retailers and property owners—from advertising.
The order instructs that stores of more than 50,000 square feet, “refrain from the advertising or promotion of goods that are not groceries, medical supplies, or items that are necessary to maintain the safety, sanitation, and basic operation of residences” by April 13, 2020.
The mandate also states: “No one shall advertise or rent a short-term vacation property except as necessary to assist in housing a health care professional or volunteer aiding in the response to the COVID-19 crisis.”
“We don’t see a rational basis [for the order], or any basis at all,” says Dan Jaffe, group exec VP of government relations at ANA. “We agree with the Governor that people need to be protected, but we don’t want restrictions on advertising. It might just increase issues we’re facing economically.”
Jaffe says that as far as the industry is aware, the ad ban applies to all formats and distribution channels in the state, but says the order is not specific enough when it comes to these details.
Under the constitution, a state has the power to prohibit advertising, but the Supreme Court has made it so that a state has to prove it has a “substantial interest” in doing so, says Jaffe. “Health is a substantial interest, but we believe this is unconstitutional,” he says. “The proposal has no effect on public health and violates the first amendment.”
A major piece of contention in the order is the difference in freedoms given to small stores and large retailers. “Why can a store that is relatively small advertise and not a large store?” he says, adding that often social distancing is harder to accomplish in small stores where there are fewer aisles.