Democrats Set Sights on Drug, Youth-Targetd Advertising

How Capital's New Political Realities Will Impact Marketing

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WASHINGTON ( -- Democratic control of Congress will change the way you do business. The new leadership will oppose media consolidation, increase scrutiny of the Federal Communications Commission and raise prospects of legislation limiting TV ads for drugs and junk food.

According to advertising- and media-association officials, consumer groups and one of the Democrats, Congress could also heighten pressure to limit profiling of consumers as one-on-one electronic marketing becomes more widespread. There have also been whispers that Democratic desires to cut the deficit while expanding some programs could rekindle the issue of media taxes.

And the coming fight for an open presidential seat in 2008 will only make matters more ... interesting.

"All in all, with the first open presidential election in years looming in 2008, Democratic control of either house will be characterized by high-level debates on popular issues. In the advertising, marketing and communications category, that leaves a lot of room for grandstanding," said Adonis Hoffman, senior VP-general counsel for the American Association of Advertising Agencies.

But the most immediate threat, warn advertising groups, is to drug ads-a $4.7 billion a year business for broadcasters.

Sen. Ted Kennedy, D-Mass., is in charge of the Health Committee. He has questioned whether the costs of prescription-drug ads are driving up health costs and has co-sponsored legislation that would ban ads for a drug during its first two years on the market, which ad groups contend is unconstitutional.

An aide to Mr. Kennedy didn't return calls last week.

Ad groups also point out that House Democrats may try to instill laws that limit drug ads when they begin their push to rewrite Medicare. The drug-ad issue is also likely to come up when Congress debates the reauthorization of a key Food and Drug Administration funding bill.

"It's our most immediate concern," said Dick O'Brien, exec VP of the Four A's.

The Senate switch also hands chairmanship of the Agriculture Committee to Tom Harkin, D-Iowa, a critic of junk-food ads aimed at kids. Mr. Harkin, while urging marketers to act voluntarily to stop promoting junk foods to kids, has offered legislation letting the Federal Trade Commission limit food advertising if "there is evidence that consumption of certain foods and beverages is detrimental to the health of children." His bill would also limit tax deductions for tobacco-ad spending, raising ad groups' fears it could be a precedent to limiting deductions for ads in other industries, especially alcohol.

The shift in the media-ownership environment comes mostly from House leadership changes.

John Dingell, D-Mich., becomes chairman of the Energy and Commerce Committee; Ed Markey, D-Mass., could become chairman of the Energy and Commerce Committee's telecom panel; Henry Waxman, D-Calif., becomes chairman of the Government Reform Committee; and John Conyers, D-Mich., becomes chairman of the Judiciary Committee.

All have opposed FCC attempts to ease rules that limit the ability of media companies to buy each other in a market and have been concerned about whether cable and phone companies would start offering some internet content providers better paths to consumers' homes than others.

Mr. Dingell made clear last week that closer oversight of the FCC would be a top priority of his panel, but he also said the direct-to-consumer drug ads would be examined.

"We are going to have to take a careful look and see whether [media-ownership changes are] justified and whether we are still having local service or not," he said. Aides to the other three wouldn't comment.

Even a Republican shift could affect the media-ownership issue. Sen. Trent Lott, R-Miss., who could enter the leadership, has repeatedly questioned easing of ownership rules.

Lobbyists and consumer groups also predicted privacy issues could get far greater scrutiny under Democrats, noting that Mr. Markey had repeatedly raised privacy concerns and would likely hold hearings, if not offer legislation. An aide to Mr. Markey declined to comment.

"What we are hoping and we expect is he will work closely with the consumer community about issues of privacy and interactive advertising," said Jeff Chester, executive director of the Center for Digital Democracy.

Dan Jaffe, exec VP of the Association of National Advertisers, warned that the Democrats' promise to cut the deficit could force them to look for additional revenue sources, including advertising taxes.
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