June 4, 2018 – The answer to the question of whether or not the presidency of Donald Trump has been good for the advertising business appears to mostly be a “yes,” according to 4As Executive Vice President of Government Relations Dick O’Brien, who spoke in Washington, D.C., at a recent session of the Coalition for Healthcare Communication Rising Leaders Conference on Healthcare Policy.
Although the Trump administration had ambitious legislative plans at first, which included health care reform, tax reform, infrastructure and regulatory relief – scheduled to be tackled in short order – repealing the Affordable Care Act “turned out to be a quagmire, quicksand for the administration,” O’Brien said.
After healthcare reform was not achieved, tax reform efforts went a lot faster, and it was a big win for the advertising industry to beat back efforts to eliminate the advertising tax deduction, which would have equated to a $169 billion tax on industry. O’Brien remarked that working with the CHC and others, “We literally prevailed. At the end of the day we convinced Congress that it should not change the deduction.”
Under President Trump, the advertising industry also has gained substantial regulatory relief in the following areas, O’Brien continued: (1) Privacy and data – the Trump administration supported Congress’ repeal by a simple majority an Obama administration rule (established during the last six months of his presidency) that advertisers would have to follow the privacy rules of common carriers and operate on an opt-in basis. If that change had taken place, it would have been “a death knell for the collection of data for marketing and advertising”; (2) Employee overtime pay – The ceiling for paying time and a half was not raised; (3) Employee health insurance – Associations may bundle into a national health insurance buying force; and (4) Rx DTC ad disclosures – FDA is examining whether the current risk disclosures are really the best way to communicate information, which would benefit industry.
Trump’s appointment of Justice Neil Gorsuch to the U.S. Supreme Court also is a move that helps industry, according to O’Brien. The commercial speech doctrine “protects a lot of the stuff we want to talk about,” he said. “When we’ve had to go to the Supreme Court to get protection … the Court has ruled in our favor, generally on a 5-4 basis. Putting Justice Gorsuch in there protects the 5-4 tendency.”
Looking forward, O’Brien suggested that industry keep an eye on the European Union’s General Data Protection Requirement (GDPR), which went into effect May 25. The GDPR is an enhanced consumer consent provision that expands the definition of personal data and is “a very stringent requirement about how to collect and get consent to use data for targeted advertising.” He told CHC conference attendees that “there are no clear guidelines interpreting this requirement, so it’s a little bit like flying blind in trying to figure out what they want.” Noncompliance with the GDPR also carries severe penalties – 4 percent of global revenues. “No one is ready,” O’Brien said.
Also on the data privacy front is the fallout from the Cambridge Analytica and Facebook data controversies, which have resulted in a push for increased disclosure in political advertising. This situation could raise the stakes in the argument for government-mandated vs. self-regulation of data and extend the reach of the Digital Advertising Alliance. These moves could “impact our ability to collect data.”
Further, current criticisms regarding data use could lead to individual states taking action, O’Brien explained, just as California has done in a ballot initiative on privacy and the use of data, covering what is allowed to be collected and used for targeted ads. “This could pass, and it’s very damaging,” he noted. “It’s only in California, but it could go to other states,” he said. “The question is, will states create a crazy quilt of regulation, requiring federal standardization? The only things worse than a federal law are 50 different state laws.”