The issues facing the advertising industry in Congress, regulatory agencies and states continue to proliferate. For advertising to continue to play a prominent role in the economy (and our culture), we must be both knowledgeable and prepared to educate decision makers about the implications of the issues they address.
By following the links below, you will find brief summaries of many of these issues and where the AAF stands on each. It is our intention to update these papers regularly, as well as to add new ones as required, to stay current on today's issues. Our ultimate goal is a positive disposition of an issue so that the paper can be eliminated entirely.
Please do not hesitate to contact us with comments or suggestions.
Direct-to-Consumer Prescription Drug Advertising
In 1997, the U.S. Food and Drug Administration issued new guidance to pharmaceutical companies that engaged in direct-to-consumer (DTC) broadcast advertising. Since then, broadcast DTC advertising can mention both the product and condition it was designed to treat without having to include an exhaustive list of disclaimers. Advertising of prescription drugs has drastically increased since then.
Pharmaceuticals Advertising Tax Deductibility
Believing the cost of pharmaceuticals to be too high, some groups have proposed reducing or eliminating the business tax deduction for direct-to-consumer advertising of prescription drugs.
Behavioral targeting provides advertising to Internet users based on Web surfing habits. This ability has enormous benefits to both advertisers and consumers, but has received a fair amount of attention from state and federal legislators because of perceived threats to consumer privacy. Proposed bills in Congress and state legislatures would require that consumers receive notice of behavioral tracking and mandate data deletion and the ability to opt-out of all tracking. Additionally, the Federal Trade Commission has proposed a set of self-regulation guidelines for companies who use behavioral advertising.
Surreptitious computer users, corporate error and other factors have lead to a number of high-profile personal data security breaches, where sensitive information leaves the control of merchants, banks or credit card companies. Congress is looking for the right balance between securing sensitive personal information and not hindering the ability of businesses to use more benign information for legitimate purposes.
When users visit any Web site, their computer exchanges data with remote servers hosting the site. In doing so, sites may anonymously track user activity, including time spent viewing a page, what links were clicked, etc. This allows sites to tailor advertising and even content they believe suits their users best.
Among the fastest growing media for content, including advertising, are mobile devices. An array of competing delivery technologies, service providers and devices complicates any proposed system of regulation, while corporate best practices and industry guidelines make consumer protection a top priority. Corporations recognize that unwanted intrusion on personal mobile devices would invite a negative backlash.
The Federal Highway Administration has allowed changeable message billboards since 1996, as long as state and local regulations permit them. Adapting to technology and advertisers’ demands, many billboard companies have replaced some traditional outdoor billboards with LED-based digital billboards, which display many advertisements over the course of a day, usually for a few seconds at a time. Additionally, the billboards are relied on for important real-time announcements, such as traffic alerts or missing children information.
Critics often cite advertising for alcoholic beverage products on television and radio and in print as a leading cause of underage drinking and demand that such advertisements be further regulated by Congress or banned outright.
Advertising Tax Deductibility
Eliminating or amortizing all or a portion of the business tax deduction for advertising has been suggested as a possible source of federal income.
State Advertising Taxes
Many legislators, when looking for new state revenue, have suggested expanding the existing sales tax to include many services exempt from taxation. Proponents claim that services are the fastest growing sector of the economy, yet they are not included in the sales tax. Advertising is typically one of the business services targeted. Proposed bills could include taxing media purchases, advertising agency services or both.