Election Day Post-Mortem For Marketers

Here's an Election Day post-mortem for marketers: Look for renewed scrutiny on media as an influencer of consumer behavior, stepped up regulatory practices, and sharpened debate on issues that affect advertisers--particularly in the realm of food and drugs.

Interviews yesterday with politically savvy marketers and policymakers revealed cautious optimism. The rise of Democrats in Congress will mean the appointment of new majority party leaders to key committee posts.

The new Democratically controlled Congress convenes in January, led by Rep. Nancy Pelosi (D-Calif.), who has already outlined six major tasks that Democrats plan to tackle in their first 100 hours. Stripping the financial relief given to big oil companies by a Republican-sponsored energy law last year is a top priority, but so too are issues likely to affect marketers of everything from autos to food to drugs.

"The notion that media drive more consumption of things that may not be good for consumers--from junk food to costly prescription drugs--is likely to find its way into the campaigns and debate," said Adonis Hoffman, senior vice president of the American Association of Advertising Agencies in an election recap he wrote for the trade association.



Sen. Hillary Clinton (D-NY) "already has started down this road with a call for a GAO study on the impact of media on certain populations." Hoffman also predicted that Sen. Tom Harkin (D-Iowa) and others could follow up their calls for further direct-to-consumer study, and that the Pharmaceutical Advertising and Prudent Purchasing Act would get renewed attention.

"I would be alert to Democratic pressure on the regulatory agencies as well," he said.

Dan Jaffe, executive vice president/government relations in Washington, D.C. for the Association of National Advertisers, bemoaned the loss of ANA "friends" such as Rep. Nancy Johnson (R-Conn.), Rep. Clay Shaw (R-Fla.) and Sen. Conrad Burns (R-Mont.)--but described Rep. Charles Rangel (D-NY), likely to chair the powerful House Ways & Means Committee, as "being well aware of ANA issues" and "balanced" in his treatment.

Jaffe also raised a cautionary note about the likelihood of ad taxation rearing its ugly head as lawmakers seek new revenue streams.

Democrats in general have lamented that the oversight role of Congress has gone largely unfulfilled under Republican leadership. That is expected to change in the Energy and Commerce Committee, which sets policy on issues of privacy and security and is expected to be chaired by Rep. John Dingell (D-Mich.) It seems likely that Dingell will resume congressional scrutiny over a number of industries--including pharmaceuticals, Jaffe said.

Over at the Direct Marketing Association, Jerry Cerasale--senior vice president of government affairs--concurred. He expects ranking Democrats to continue their efforts to ensure consumer privacy and also noted that automobile manufacturers--increasingly more dependent on the direct response channel--require more detailed knowledge of consumers. Dingell represents a state that is home to the major car companies.

Executives at pharmaceutical companies such as Pfizer and health insurance providers such as Humana are concerned about Democratic plans to cut government health care payments. The U.S. government is the largest buyer of drugs and health services.

Pelosi has already vowed to seek votes in January to allow the federal government's Medicare program to negotiate with pharmaceutical makers for lower drug prices--a scenario the industry definitely does not want.

While Medicare introduced an insurance-company administered drug benefit this year, the U.S. government at present cannot participate in drug price negotiations; Pelosi has set revoking the prohibition as another of the party's immediate goals.

The healthcare industry may not actually see that come to pass. That's the opinion among Goldman Sachs' Washington and New York-based analysts. It's an unlikely outcome, said Goldman Sachs analyst Alec Phillips during a conference call yesterday. "While a [Medicare Drug Pricing] bill will pass the House, it's unlikely that it will become law because Democrats still won't have [enough of a majority] in the Senate, and Sen. Max Baucus (D-Mont.) has previously voted against it.

The AAAA's Hoffman expects a Rep. Henry Waxman-led panel to zero in on drug safety. That alone opens the door to a host of pertinent issues including restrictions on DTC advertising, moratoria on new medicines, and stepped-up review and enforcement by the FDA. "Mr. Waxman really knows his way around these issues," Hoffman wrote.

As for the Government Reform Committee, the DMA in particular expects to continue to keep tabs on the postal service reform legislation--but Cerasale says he expects no real shift in policy, since the issue is bi-partisan.

The Senate's Commerce Committee is co-chaired by Sen. Ted Stevens (R-Alaska) and Sen. Daniel Inouye (D-Hawaii). "My understanding is that Inouye would become chair and ask Stevens to co-chair," said Cerasale. As a result, "there would be no major shift on direct marketing's particular issues."

Likewise, Cerasale also expects no wholesale changes on the Homeland Security and Government Affairs Committee, which oversees postal reform. It's expected that Sen. Susan Collins (R-Maine) will turn over the chairmanship to Sen. Joseph Lieberman (I-Conn).

"Both have worked closely together," Cerasale said, adding that Lieberman has "a balanced view" and is aware of what direct marketing can mean to companies and to a vibrant economy while protecting citizens' privacy.

(Marketing Daily's Christine Bittar also contributed to this story.)

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