How the Senate shift impacts ad industry

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The U.S. Senate's sudden switch in party control raises the prospect of legislation aimed at tobacco advertising and privacy invasion by marketers, while heightening visibility for a push to return to TV's family hour. It also raises the possibility of new attacks on direct-to-consumer ad spending for prescription drugs.

Advertising lobbyists said last week that even though the Senate remains almost evenly split between the two parties, Vermont Sen. James Jeffords' historic decision to abandon the GOP shifts the balance. His decision to become an independent effectively allows the Democrats to set the Senate agenda. It also gives the Democrats a much stronger hand in negotiating with the House and Bush White House.

For the marketing community, the key impact comes from changes in three Senate committee chairmanships. In one, Sen. Ernest "Fritz" Hollings (D-S.C.) replaces Sen. John McCain (R-Ariz.) as chairman of the Senate Commerce Committee, which handles most attempts to restrict marketing. In another, Sen. Ted Kennedy (D-Mass.), replaces Sen. Jeffords as chairman of the Senate Health, Education, Labor and Pensions Committee. Finally in the third, Sen. Patrick Leahy (D-Vt.) replaces Sen. Orrin Hatch (R-Utah) as chairman of the Senate Judiciary Committee.

Sen. Hollings has taken a tougher stance on privacy legislation than Sen. McCain. He favors requiring marketers that want to share information gathered online to allow consumers to "opt in" and, in some cases, allow consumers to sue marketers for illegal sharing. Sen. McCain had supported simply requiring marketers to let consumers know how information would be used.

Sen. Hollings' concern about violent entertainment has also been much broader than Sen. McCain's. While Sen. McCain had targeted those who rated violent games, movies and music for adults but marketed them to kids, Sen. Hollings has offered legislation to limit airing of violent or sexual programming during certain hours on TV. His Children's Protection from Violent Programming Act would require the Federal Communications Commission to study whether the V-chip is effective in blocking violent programming to kids while also setting rules to block violent programming "when children are likely to represent a substantial part of the viewing audience."

"On privacy, we have been looking at the McCain bill-one that the marketing industry feels comfortable with-as the point of departure," said John Kamp, an advertising lawyer who last week was named interim head of the Privacy Leadership Initiative, formed by major marketers to push research into consumers privacy expectations. "Now we are looking at a Hollings bill which makes virtually everyone in the industry nervous [because of] where you start."

Dan Jaffe, exec VP of the Association of National Advertisers, said that Sen. Hollings has generally been supportive of the ad industry, but that the violence legislation is worrisome.

Sen. Kennedy's new status as a committee chairman will put issues like the patients' bill of rights on the agenda and could also increase attention on direct-to-consumer drug advertising spending.

One certain result of the change is to increase the committee's attention to tobacco marketing. Sen. Kennedy, a longtime tobacco critic, is likely to move legislation giving the Food and Drug Administration authority over tobacco. Sen. Kennedy's chairmanship could also increase chances for legislation to restrict the information marketers can get from schools without seeking parents' permission.

In the Judiciary Committee, Sen. Leahy's presence could bring increased focus on privacy as well as more scrutiny of judicial nominees. And last week, Sen. Paul Sorbanes (D-Md.), who will become chairman of the Senate Banking, Housing and Urban Affairs Committee, said privacy regulations would also become a quick focus of his committee.

While advertising attorneys said the visibility and the proposals up for discussion may change, they also noted that many ad issues aren't partisan. "You will see some hearings on some issues that you can't get through the Senate," said Jeff Perlman, exec VP-government relations for the American Advertising Federation. "But you have the same 100 senators ultimately voting."

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