• by Judy Warner , January 26, 2007

Less than three months from the IRS filing deadline for taxes, the tax prep centers are gunning for the vast middle ground of average taxpayers who opt to have their annual figures tallied at a storefront or online. The annual drive to entice taxpayers is playing out on three fronts: targeting those who want to complete their taxes themselves, get refunds faster, or need tax advice.

H&R Block's campaign from Campbell Mithun touts a new colloquial "I got people" anthem. That rallying cry will be featured in print, broadcast, and Internet ads, direct mail and emails, and on a revamped home page.

The Kansas City tax preparer has in recent years lost customers to smaller rivals like Jackson Hewitt and Liberty Tax Service, and to do-it-yourself kits such as Intuit's TurboTax. Even so, H&R Block commands roughly 20% of the retail tax prep market, followed by Jackson Hewitt with 4% and Liberty, with just 1%, according to Hoovers and figures from the companies.

On the marketing front, H&R Block dominates its competitors with a national media outlay that, per TNS Media Intelligence, reached almost $98 million from January through September 2006. Much of that spending is concentrated during the first quarter when most Americans are preparing to file personal income taxes.

One spot for H&R Block's TaxCut software takes direct aim at rival TurboTax, playing to consumers' fears of being left alone in the event of an IRS audit. In it, when a married couple learns their tax return is being audited, the wife holds a generic software box up to her husband's ear, telling him to ask it for advice. The need for "people" is underscored because, as noted in the ad, TaxCut is the only software that includes a guarantee of audit support.

TNS pegged Jackson Hewitt at just under $22 million spending in the same nine-month period. The Parsippany, N.J.-based, tax firm outmaneuvered its larger rival last year with its "Money Now Loan." Instead of waiting for the arrival of a W-2, Jackson Hewitt will calculate taxes based on a final pay stub. The loan is paid off when the customer receives a refund from the government. That program is supported as part of Jackson Hewitt's "Characters" campaign, introduced last year along with the tagline, "We know so much about taxes, that we can help anybody," according to Peter Tahinos, senior vice president of marketing.

In one execution, "The Old Woman Who Lives in a Shoe" needs to learn more about child and adoption credits; Frankenstein needs help understanding his many medical costs. More characters have been added to the mix for this year, including the title character of "Ghost Rider" due out in February and starring Nicolas Cage. "Although the characters are whimsical," Tahinos wrote in an email, "the situations and the assistance they need are real. The ads use humor to differentiate the company ... and place the emphasis on how well Jackson Hewitt knows taxes."

The media mix includes TV, radio, outdoor, transit, print and some point of purchase and is customized to the market. The company also is in its fourth year as the official tax sponsor of NASCAR. The "Jackson Hewitt 500 Sweepstakes" runs through April 17 and will award some 500 prizes, including a grand prize to one winner equal to five times their 2006 tax refund.

Liberty relies almost exclusively on "neighborhood" marketing. On any given day between now and Tax Day, people don Statue of Liberty costumes and wave at passersby to generate awareness for Liberty's more than 2,450 stores. For a second year, it is sponsoring a "Tax Day Giveaway" cash prize on its site and in conjunction with Val Pak mailers.

Noting that H&R Block has about 20% of the retail preparation market, Martha O'Gorman, Liberty's vice president of marketing, said: "There's still plenty of room for growth. We think of ourselves as the Minutemen fighting the British Army."

Some of Liberty's growth is expected to come in the form of online filers, of which there were some 21 million last year. Earlier this month, Liberty bought eSmartTax, making it and H&R Block the only two tax preparers to offer both online and in-store tax prep services.

"There will be some limited advertising support for this program through pay-per-click ads," O'Gorman said, "but we will wait to do the big rollout next season after we've had a chance to test the waters."