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AWARD WINNING IDEASN A T I O N A L C L U B A C H I E V E M E N T C O M P E T I T I O N W I N N I N G E N T R I E S
GOVERNMENT RELATIONS
GOVERNMENTRELATIONS
Exhibit#1:
LegislativeUpdates
AAF Houston Government Affairs Committee Report October 28, 2015
Submitted by:
Bill Sexton, Chair (Director, Marketing, Adcetera)
Committee
John Manlove, Vice Chair (President, John Manlove Marketing and Communications)
Jay Hagins, Member (Former Executive Director, AAF‐Houston)
Howard Brown, Member (VP, General Manager, Lopez Negrete Communications)
Introduction
The national issues listed that follow were taken from an AAF Government Affairs Committee Call on
October 14 2015 hosted by Clark Rector, EVP of Government Affairs (AAF) and AAF Government Affairs
Committee Chair Carla Michelotti (Leo Burnett) and Vice‐Chair Bill Hagelstein (RPA).
National AAF Issues and Activities
With focus on replacing the Speaker of the house, the 2016 presidential election and funding the
government to avoid shutdowns, there is little movement on advertising‐related issues at the federal
level. However, even though there are no burning issues, general lobbying continues to educate and lay
down the groundwork before any potential issue arises. Now is the time to establish the relationships
before policy that could negatively affect advertising businesses and industry become an issue.
Politicians one wants to make commitments at this time given the election cycle and there is no real
reform being introduced as most are only focused on keeping things running.
Comments on Candidates
Congressman Paul Ryan who, at the time of this writing, was being pursued to become the Speaker of
the House is playing things relatively close to the vest, but the general impression is he would support
the advertising industry.
2
Some of the republican candidates have put out tax plans that would appear to support the general type
tax reforms of the past Camp‐Baucus tax plan which would do away with advertising exemptions.
Presidential candidate John Kasich has proposed a fight to reduce the deductibility of certain business
expenses which appear to be similar to what he has done at the state level with changes to tax laws.
Presidential candidate Hillary Clinton has spoken strongly about wanting to crack down on direct to
consumer (DTC) pharmaceutical advertising, eliminate unspecified corporate write offs and require FDA
preclearance of DTC ads. AAF has fought these challenges off in the past had believe there is already an
effective review process already in place. In recent debates, Clinton has mentioned pharma as a favorite
enemy.
Other Issues: Privacy and Data Security
Although there’s not a lot of legislative activity, there’s but plenty of scrutiny on interest based
advertising and ensuring consumers are protected. The industry has been very proactive in and through
the Digital Advertising Alliance (DAA), providing consumers the ability to opt out through the blue
triangle‐shape icon — the cornerstone of the DAA's ad choices program, a visual prompt that allows
consumers to opt‐out of behaviorally targeting advertising. The blue triangle is moving to the mobile
app environment too.
The EU had established a safe harbor policy of best practices for companies advertising in the US and
Europe. Companies enforcing and abiding by the best practices were protected against actions against
them. The EU undid the best practices efforts developed in working with 27 country privacy laws when
by recently overriding the safe harbor policy.
While the DAA continues to pursue new forms of self regulation, there are concerns privacy compliance
could become much more like Europe which will create a difficult online operating environment.
Texas State and Houston Local Issues and Activities
If Paul Ryan becomes Speaker of the House, there are reports of Congressman Kevin Brady, Texas
District 8 Congressional district that includes Montgomery County and Walker County becoming the
Chairman of the Ways and Means Committee. There are no other Texas state or Houston local activities
to report on at this time.
1 10/28/2015
AAF – Houston Government Affairs Committee Charter GOAL The American Advertising Federation (AAF) was founded with the purpose to self-regulate the advertising industry and uphold the highest business standards. AAF-Houston’s Government Affairs committee protects and promotes advertising at all levels of government through efforts ranging from local grassroots activities to supporting AAF’s national lobbying. CORE ACTIVITY AAF Houston’s Government Affairs committee contributes to protect and promote advertising and AAF national efforts at a local level by:
Proactively forging relationships with local and state legislators and keeping them up-to-date on the current impact that the advertising industry has on the economy
Monitoring legal issues surrounding the advertising industry on an on-going basis Keeping the Board of Directors and AAF Houston’s members informed as issues arise that could
affect the industry and their businesses Planning strategies that best address relevant legislative issues as they arise and coordinating
these plans and their execution with other AAF efforts at a local, state, district and national level
MEMBERSHIP Bill Sexton, Chair (Director, Marketing, Adcetera) John Manlove, Vice Chair (President, John Manlove Marketing and Communications) Jay Hagins, Member (Former Executive Director, AAF-Houston) Howard Brown, Member (VP General Manager, Lopez Negrete Communications) Member Profile: Members shall possess an understanding and appreciation of the affect of politics on business; a willingness and ability to project a positive, politically neutral representation of the advertising industry; political connections and personable qualities.
Potential Federal Government-related Issues Affecting the Houston Area Advertising Market1
Advertising content restrictions through the Federal Trade Commission’s increasing powers to regulate advertisers, and potential advertising taxes for the revenues to fund government programs.
Legislative proposals directed at the potential revenue from taxing advertising, as well as proposed moratoriums and limits on advertising for prescription medicines, over-the-counter medicines and children’s foods.
Support for taxing advertising by limiting its deductibility, a 15-year on-and-off bipartisan efforts to tax advertising from Republican and Democratic Administrations, as well as legislative proposals originating from both sides of the political aisle.
State Issues Affecting the Houston Area Advertising Market
Changes to the Texas Franchise Tax
1 http://theadvertisingcoalition.com/on-the-issues
2 10/28/2015
COMMITTEE RESOURCES: NATIONAL RESOURCES
American Advertising Federation
The Advertising Coalition
STATE & LOCAL RESOURCES
Texas State Government Texas Chamber of Commerce
Your Texas State Legislator
Texas Legislator Resources
AAF-Houston
POLITICAL COVERAGE
Texas Tribune
Houston Chronicle Political Blog
Austin Statesmen
NATIONAL CONTACTS
National AAF Government Affairs Chair: Carla Michelotti, EVP, Chief Legal, Government and Corporate Affairs Officer (recently retired) Leo Burnett Worldwide
AAF Executive VP - Government Affairs: Clark Rector
AAF Houston Government Affairs Committee Report November 18, 2015
Submitted by: Bill Sexton, Chair
(Director, Marketing, Adcetera)
Committee John Manlove, Vice Chair
(President, John Manlove Marketing and Communications)
Jay Hagins, Member (Former Executive Director, AAF-Houston)
Howard Brown, Member (VP, General Manager, Lopez Negrete Communications)
2
National AAF Issues and Activities
October 30, 2015 Clark Rector Jr., Executive Vice President–Government Affairs C
New Leadership in the House
Representative Paul Ryan, R-Wisc., has been selected as the new Speaker of the U.S. House of Representatives replacing former Rep. John Boehner, R-Ohio, who has resigned from Congress.
Rep. Ryan had previously been chair of the tax writing Ways and Means Committee. Earlier this year, members of the American Advertising Federation (AAF) and our partners in The Advertising Coalition (TAC) met with Chairman Ryan to discuss the importance of maintaining advertising as a fully deductible normal and necessary business expense in the corporate tax code. While he took no position for or against, Rep. Ryan is well educated on the issue.
A new Chairman of Ways and Means has not yet been selected. The two most likely contenders are considered to be Rep. Kevin Brady, R-Texas, and Rep. Pat Tiberi, R-Ohio. The AAF and TAC have met with Rep. Brady to educate him on the importance of keeping advertising fully deductible. Rep. Tiberi has not yet scheduled a meeting with us, but he did address AAF’s 2013 Government Affairs Conference, where the AAF grassroots were able to demonstrate the importance of the issue by their very presence in Washington.
UPDATE: Rep Kevin Brady has since been named Chairman of the Ways and Means Committee. WASII
Carson Tax Plan Could Hit Advertising
In the Republican Presidential debate on October 27, Dr. Ben Carson reiterated his support for a flat tax at a rate close to 15 percent. In defending his proposal, he said that rate was achievable, but “You also have to get rid of all the deductions and all the loopholes.” Should the flat tax apply to corporations as well – as seems to be his wish – then advertising would seemingly be one of the deductions eliminated.
UK Report Calls for Less Advertising
A recent report by Public Health England recommended a “sugar tax” of up to 20 percent, as well as reductions in the advertising of “fizzy drinks and fattening snacks.” The United Kingdom already has curbs on advertising during children’s programs. The report suggests extending those curbs to programs that children are likely to watch. It also says that the restrictions could be extended to social media, cinemas, online and in games.
3
Record Amounts of Political Ads Expected
Forecasters are expecting the 2015-2016 election cycle will generate records amounts of spending on political advertising. The estimates are for national, state and local contests and anticipate more advertising for more extended periods than in previous elections. While this may benefit some media, it could make it difficult for commercial advertisers as rates are likely to increase as less quality time and space is available.
Worth Noting From Advertising Age Published on November 17, 2015.
Doctors Call for Drug Advertising Ban, Reversing Their Position
AMA Seeks End to TV Commercials, Magazine Buys for Prescription Meds
If media sellers thought TV mega-spenders DraftKings and FanDuel going wobbly would hurt, a whole new level of pain presented itself on Tuesday, when the American Medical Association said drug companies should stop advertising directly to consumers.
Pharmaceutical marketers in 2014 spent an estimated $4.8 billion on U.S. measured-media advertising, according to the Ad Age Datacenter. In a vote Tuesday at its annual meeting in Atlanta, the association called for an end to TV commercials and magazine spreads that pitch prescription drugs. The ads often push patients to more expensive treatments and inflate demand for therapies, the AMA said. That's a change from the AMA's previous position, which said the ads were fine as long as they were educational and accurate. The U.S. is one of the few countries that allows direct-to-consumer drug ads.
The vote "reflects concerns among physicians about the negative impact of commercially driven promotions, and the role that marketing costs play in fueling escalating drug prices," AMA Board Chair-elect Patrice Harris said in a statement announcing the vote result. "Direct-to-consumer advertising also inflates demand for new and more expensive drugs, even when these drugs may not be appropriate."
The AMA has a membership of about 235,000 U.S. doctors and medical students. Last year, the group spent $19.7 million on lobbying the U.S. government, making it the No. 5 spender in the country, according to the Center for Responsive Politics. Pharmaceutical Research and Manufacturers of America, or PhRMA, which works on behalf of the drug industry, spent $16.6 million last year.
Drugmakers say their ads can help patients learn more about diseases and their treatment options.
"Providing scientifically accurate information to patients so that they are better informed about their health care and treatment options is the goal of direct-to-consumer pharmaceutical advertising," Tina Stow, a spokeswoman for PhRMA, said by e-mail. "Research shows that accurate information about disease and treatment options makes patients and doctors better partners."
-- Bloomberg News
4
Texas State and Houston Local Issues and Activities
Congressman Kevin Brady, Texas District 8 Congressional district that includes Montgomery County and Walker County was selected to be the Chairman of the Ways and Means Committee. There are no other Texas state or Houston local activities to report on at this time.
Nicole Fellers <[email protected]>
Register now to learn about Houston's evolving urban environment with Dr. Stephen Klineberg1 message
AAF-Houston <[email protected]> Mon, Feb 8, 2016 at 12:30 PMReply-To: [email protected]: [email protected]
Join us on February 17th at 11:30 a.m. to 1:00 p.m. for the AAF-Houston's February Creative ThoughtLeader Speaker Series featuring...
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9/29/2015 Study: Junk Food, Spending Bans May Not Help Those with Impulse Problems
https://www.ama.org/publications/MarketingNews/Pages/consumers-self-control-public-policy.aspx
Study: Junk Food, Spending Bans May Not HelpThose with Impulse ProblemsBy: Christopher BartoneScholarly Insights
Print page A-, A, A+
Key TakeawaysResearch suggests understandingconsumer impulse behavior plays acritical role in crafting public policy.
Scholarly Insights: AMA'sdigest of the latest findingsfrom marketing's topresearchers When former mayor of New YorkCity Michael Bloomberg pushed for acitywide ban on large soda drinks, hefound himself at the familiar andcontroversial intersection betweengovernment regulation and personalaccountability. But what may surpriseadvocates of the policy is that, hadthe ban been ratified, there isevidence to suggest consumerbehavior may not have changed atall.
New research in the AMA’s Journalof Public Policy & Marketing ̔says
laws affecting food and finance don’t have much impact on those who like their Big Gulps and “shop ’til you drop” weekends. So when it comes to the giant soda ban, health nuts would still avoid large sodas, but sweet-toothed New Yorkers would still pay up to get their sugary fix.
Therein lies the challenge policy makers face when attempting to influence consumer behavior: Some of us simply do not possess the self-control to resist that soda even if we have to pay more for it. The researchers suggest that “when formulating policy to address important social issues such as obesity and consumer debt, understanding the role of consumer self-control is crucial.”
It is no secret that a consumer with a disposition that tends toward overindulgence is more susceptible to financial and health-related problems. And that certainly does not mean public policy initiatives like the large soda ban are doomed to failure. But when policy makers are determining how such initiatives might effect change in consumer behavior, they should consider their potential effectiveness in context.
The authors, Kelly L. Haws, Scott W. Davis and Utpal M. Dholakia, write that “context, personal preferences, and other factors may lead to differences in one’s self-control” and that this applies to a wide spectrum of behavior. For example, a consumer who tends to over-spend might not necessarily be compelled to over-eat. What does this mean for marketers and policy makers? Just because a consumer has a high level of self-control in one area of his life doesn’t mean that he exerts the same level of self-control in another.
“The effectiveness of public policy interventions,” according to the research, “are dependent on individual differences in consumers’ self-control” in various areas of their lives. Ultimately, the research suggests that policy makers and marketers should seek “a better understanding of these aspects of self-control.” Not doing so could mean that a policy intended to influence consumer behavior in a positive way could run the risk of producing the opposite outcome.
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GOVERNMENTRELATIONS
Exhibit#2:
MemberOrganizations
BluePRINT for the 114th Congress Policy Brief: Advertising Tax Deductibility – May 2015 Congress should oppose legislation to eliminate the full deductibility of advertising as an ordinary and necessary business expense. Background
According to the Advertising Coalition, advertising has been under attack on Capitol Hill for more than a decade, and never
more than in recent years. Opponents of advertising want to restrict its content, give the Federal Trade Commission
increased power to regulate it, and — in these difficult economic times — many want to tax advertising for the revenues it
could generate to fund government programs. Today, the attention has been directed at the potential revenue from taxing
advertising, as well as proposed moratoriums and limits on advertising for prescription medicines, over-the-counter
medicines, and children’s foods. Support for taxing advertising by limiting its deductibility has been bipartisan. In the past
15 years, there have been major efforts to tax advertising from Republican and Democratic Administrations, as well as
legislative proposals originating from both sides of the political aisle.
Industry Position
A multi-functional industry, the current distribution of overall print in the “Market/Promote” category is nearly 44 percent;
the logistics function (including packaging, labels and wrappers that may be considered advertising) accounts for nearly 20
percent of print activity. The highest relative growth areas expected in print include direct marketing and packaging. Taxing
advertising would have a drastic, negative impact on the industry. Advertising is an ordinary and necessary business
expense, just like salaries, rent, utilities and office supplies. Eliminating the deductibility of advertising would have the net
effect of increasing a company’s taxable income for every year in which new advertising is purchased. Additionally, the
portion of ad spending that is not immediately deductible would be counted as income for tax purposes. Proponents of the
“Ad Tax” also do not consider that companies buy new advertising each year and would feel the brunt of this tax annually.
As such, print customers would have less money to spend on advertising year after year – a devastating economic trend
faced by printers and their suppliers.
114th
Congress
House Ways & Means Committee Chairman Paul Ryan (WI) and Senate Finance Committee Chairman Orrin Hatch (UT)
solicited industry comments until 5/31/15 regarding elements of comprehensive tax reform, including the “Ad Tax.” Senate
Finance Committee Working Groups (including a Business Income group) were established on 1/15/15 and charged with
producing recommendations by the end of May that would in turn be the basis for any tax reform legislation to be
introduced this Congress.
For more information, please contact: Lisbeth Lyons Mark J. Nuzzaco Printing Industries of America NPES The Association for Suppliers of [email protected] Printing, Publishing and Converting Technologies [email protected]
GOVERNMENTRELATIONS
Exhibit#3:
IndustryStakeholders
HEADQUARTERS 1101 VERMONT AVENUE NW, 5TH FLOOR, WASHINGTON DC 20005
P: (202) 898-0089 F: (202) 898-0159 WWW.AAF.ORG
