In the Drudge Report's world of sensationalist all-caps headlines, it doesn't get much better than "OBAMA'S NEW 'CHRISTMAS TREE TAX.'" In five sparse words, the headline captured pretty much everything Drudge and its readers believe about the current administration, in which big-government liberals would figure out a way to tax Christmas during hard economic times.
The only problem? It wasn't true. The 15-cents-a-tree charge that caused so much commotion earlier in the week was not a tax, and it has little to do with the Obama administration. What the Department of Agriculture actually set forth is a commodity checkoff program: a common means of allowing industry groups to pool their resources for marketing and research purposes. Moreover, the effort was led by the National Christmas Tree Association itself, which touts support from over 70% of the industry.
Familiar campaigns such as "Got Milk?" and "Beef: It's What's for Dinner" are the result of similar checkoff programs -- and a testament to their power. They allow industries to engage in national marketing campaigns that would be impossible at a local level. From blueberries to soybeans, over 15 such programs exist. In most cases, they are supported by a vast majority of their industries.
The Heritage Foundation's David Addington introduced the "tax" in a story on Tuesday. The Drudge Report picked it up the next morning. Within hours, the story was getting play on Fox News and the blogosphere. Even The Atlantic's Derek Thompson hopped in on the hoopla, calling the fee a "horrendously stupid PR failure." By the end of the day, the White House had caved, telling reporters the Department of Agriculture will "delay implementation and revisit this action." The USDA did not immediately respond to calls seeking comment.
Ad Age spoke with three Christmas tree industry insiders, each of whom were incredulous over the developments -- especially considering the effort's been three and a half years in the making. Oregon tree farmer Betty Malone, who is intimately involved with the project, said the team drew inspiration from previous successes funded by voluntary industry contributions. According to data gathered by tree farmers and provided to the USDA, sales of fresh cut Christmas trees decreased by 15 million trees from 37 million trees sold in 1991 down to 22 million trees sold in 2002.
In 2004, with sales still faltering and artificial Christmas trees gaining market share, the industry managed to raise roughly $1 million. Partnering with Smith & Harroff, they ran a cost-effective campaign highlighted by earned media and an "advergame." The results? A 40% increase in sales over the next five years, a 2006 Gold Sabre Award, and inclusion in a collegiate level text book, Consumer Behavior.
Despite the success, Ms. Malone said, it's difficult to keep a program going on a voluntary basis. As funding started to dry up around 2007, the group set their sights on a USDA-regulated checkoff.
The 15-cent per tree charge set forth was designed to raise a modest $2 million for a similar national campaign. Because the fee is designed to increase sales and make the industry money, it's unlikely consumers would see any price increases.
How such a successful and commonplace industry practice raised so much opposition mystifies Ms. Malone. "This is a group getting together, pooling their resources for the benefit of the entire industry," she said. "The only connection with government is oversight."
So what happens if the USDA goes through with pulling the plug on the program? "Take a look in the next couple months, make your best guess on how much [the artificial Christmas tree industry is ] spending on promotion," Ms. Malone said. "Even with this 2 million dollar budget, we're still miles behind what they've spent annually."
That isn't exactly easy to determine. Overall ad-spending numbers for the artificial-Christmas-tree industry are hard to come by . It's likely retailers who sell them -- from the local drug store to Bed, Bath & Beyond to Walmart -- spend the bulk of the marketing money, which includes advertising, circulars and in-store promotions. But according to tax returns of The American Christmas Tree Association, the trade group for the artificial-tree industry, the group had 2009 revenue of just $93,000 and spent only $600 on advertising and promotion.
And, according to NCTA's own figures, most American's still prefer real over fake.