e-Cigarette Advertising and Commercial Free Speech

In the words of former baseball player and philosopher Yogi Berra, “It’s like déjà vu all over again.” California Senator Barbara Boxer (D) has called upon the Federal Trade Commission (FTC) to expedite its study of the e-cigarette industry examining whether their advertising is encouraging children and youth to take up vaping.

Years of experience with other disfavored products leads us to expect that – no matter the results of the study – someone in Congress will likely call for bans or restrictions on e-cigarette advertising. While they will claim to be trying to protect youth, the actual limitations will likely be much broader and ban much advertising aimed at adult and legal consumers. Continue Reading →

Is Prescription Drug Advertising Really Harmful?

In response to a recent article.

On October 21, many Americans celebrated “Back to the Future Day,” commemorating the day that film’s main character, Marty McFly (played by recent Advertising Hall of Fame inductee Michael J. Fox) arrived in the future.  Unfortunately the doctors of the American Medical Association appear to have misread the memo (could it have been the handwriting?) and recently voted to go back to the past by calling for an end to all prescription drug advertising.

In this case, the doctors have made the wrong prescription.  Far from being harmful, AAF believes that pharmaceutical advertising has provided a great benefit to consumers and public health.  By raising awareness of products available to treat many medical conditions, from lung cancer to COPD to, yes, erectile dysfunction, pharmaceutical advertising has resulted in countless patients making appointments with their doctors to learn more.  That can only be a good thing. Continue Reading →

Marriage Equality and Advertising

In the past weeks, the Supreme Court has, with the stroke of a pen, made significant strides for freedom and fairness with its historic rulings in favor of marriage equality, to uphold the Fair Housing Act, and to solidify the Affordable Care Act, among others.

The Court upheld what have always been underlying theoretical ideals of equality and liberty; however, in reality in 2015 we are still seeking after these ideas in practice. As disseminators and shapers of images and messages, media, content outlets, and the advertising industry are situated to not only reaffirm these rulings, but to push this country to take the remaining steps towards a better, more equitable nation and world.

We put forth images of families. We put forth images of friends. We put forth realistic and unrealistic images of education, of crime, of right and wrong, proper and improper, on a continuous basis. And in so doing, we have more potential to influence the future of our country than perhaps any other industry – while the Court must wait for someone to bring suit, industry strategists, creatives, media mavens and promotion professionals can and do regularly release new images, giving us a distinct voice.

The question remains, then, what is it we want to say? Will we speak of love and acceptance of all? Will we speak of the right of families and children to have adequate healthcare, housing, enough food, and strong schools, regardless of their area codes? Will we speak of the things people need to hear and show the images they need to see in a tone that resonates, increases understanding, and inspires all of us to work collectively so this great country realizes its full potential?

There is no definitive answer to the question: “what should we be saying?” It is, however, our definitive professional and personal responsibility to think about the consequences and impact of our words we chose to say and images we choose to show.

About the Author

Constance Cannon Frazier

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Constance Cannon Frazier joined the American Advertising Federation (AAF) in January of 2004 as the senior vice president, AAF Mosaic Center and AAF education services. She was promoted to executive vice president after one year of service to the organization. In October of 2007, Frazier became the AAF’s executive vice president of corporate programs and marketing and as of August of 2010, Frazier is AAF’s chief operating officer. Read More…

Proposed Tax Reform Released

House Ways and Means Committee Chairman Dave Camp, R-Mich., has finally released his public discussion draft for tax reform and the advertising industry is targeted for new revenues.

Under advertising provisions of the proposal “a taxpayer must capitalize and amortize 50 percent of its specified advertising expenses over a 10-year period, beginning with the midpoint of the tax year in which the expenses are paid or incurred.  The remaining 50 percent of a taxpayer’s specified advertising expenses may  continue to be deducted in the year paid or incurred (as under present law).”  The proposal provides an exemption from the capitalization requirements for taxpayers with advertising expenses of less than $1 million in a taxable year.

This proposal, if enacted, would have a devastating impact on the advertising and media businesses as well as the economy as a whole.  AAF will continue to educate lawmakers as to the value of keeping advertising as a fully deductible business expense in the current year, and urge them to oppose any changes to that status.  We urge all AAF members to contact their Representatives and tell them to oppose this provision of the tax reform plan.

Tax reform, and threats to advertising deductibility, will be a major topic of discussion at AAF’s Advocacy and Action: Advertising Day on the Hill on March 11 and 12.  One of the featured speakers will be Rep. Mike Kelly, R-Penn., who sits on the Ways and Means Committee and will talk about the prospects for the tax reform package.

If you have not yet done so, I urge you to register today for Advocacy and Action: Advertising Day on the Hill.  A hotel room block is available one block from the conference venue.

This is your opportunity to learn about tax reform and other issues confronting the advertising industry – and then tell your elected representatives where you stand.

Senate Bill Limits Ad Deductibility

Senator Max Baucus, D-Mont., Chairman of the Senate Finance Committee released draft tax reform legislation today that takes direct aim at advertising (section 23, page 104).  The bill would only allow 50% of advertising expenses to be deducted in the current year, with the remaining 50% amortized over 5 years.

It is critically important that the advertising industry speak loudly and clearly to Senators and oppose any limitation on the full tax deductibility of advertising.  Please contact your Senators today and ask them to oppose any change to the tax treatment of advertising. Continue Reading →

Ad Tax Deductibility Proposal Worse Than We Thought

Credible sources within the House Ways and Means Committee have recently confirmed that not only does limiting the deduction for advertising costs remain on the table for tax reform, but that the proposal could be even worse than we feared.   According to our information the plan under consideration would require 50% of all advertising costs to be amortized over 10 years, and 50% deducted in the first year of the amortization schedule.

It is very important that we contact members of Congress and express strong opposition to any attempt to limit the full current year deduction for advertising expenses.  If your Representative does not sit on Ways and Means, encourage him or her to weigh in with Committee members and House leadership and urge them to drop the advertising proposal.

Any tax on advertising would be devastating not just to the advertising industry, but to the national economy as well.  It would cost the nation millions of jobs and hundreds of millions of dollars in lost economic activity.  This is exactly the wrong thing to do as the economy struggles to recover.  The stimulus generated by advertising brings jobs and sales to every state and to every congressional district.  More detailed talking points are listed below.

Members of Congress can be contacted though the U.S. House of Representatives website.  Just enter your zip code in the upper right hand corner to find your Representative and a link to his or her webpage.

Please report back to Clark Rector, EVP, Government Affairs for the AAF with any response you receive and do not hesitate to let him know if you have any comments or questions.  Thank you for your assistance with this vital matter.

Talking points for communications to Members of U.S. Congress:

  • Preserve the current standard business deduction for the cost of advertising
  • The House Ways and Means Committee has developed draft legislation that would impose a tax on advertising. Today businesses may deduct 100% of the cost of their advertising. The proposal would allow only 50% in the year the ad runs and require a business to spread the remaining amount over 10 years. IHS Global Insight estimates this could reduce sales in the U.S. by $446 billion and place 1.7 million U.S. jobs at risk.
  • The Tax  Code for 100 years has permitted businesses to deduct the full cost of their advertising, just as it permits the deduction of other ordinary business costs like salaries, rent, utilities and office supplies.
  • Advertising expenditures generate sales activity in the U.S. economy amounting to $5.8 trillion. That is 20 percent of the total national economic output. It also helps support 20 million jobs or 15% of all jobs in the country.
  • Nobel prize-winning economists who have looked at the advertising deduction have concluded that nothing in the economic literature justifies a change in tax policy.
  • It makes no economic or common sense to make businesses pay more for advertising thereby causing a decline in ad spending and the sales advertising generates.

Digital Advertising Alliance Ad Targets Mozilla

Today the Digital Advertising Alliance (DAA) placed a full-page ad in Advertising Age highlighting the real world negative consequences that we believe will result from plans by Mozilla – maker of the Firefox Web browser – to block third-party cookies for all of its users worldwide.   The American Advertising Federation is on the governing board of the DAA.

You can view the ad – titled Keep Mozilla from Hijacking the Internet ­– by clicking here.

As the ad explains, the DAA thinks that Mozilla’s unilateral approach on cookie blocking threatens to undermine commerce and the consumer experience on the Internet.  All advertisers want to reach the right audience, with the right message, at the right time.  Used transparently and responsibly, cookies improve the relevancy of the online experience for consumers.  Cookies are necessary to generating the enhanced publisher revenue that supports a diverse and free content for consumers.  The DAA feels that Mozilla’s approach would instead eliminate cookies essential to advertising technologies, turning Mozilla into “judge and jury” for business models on the Internet.

More importantly, to the extent that Mozilla’s approach is perceived as promoting user privacy, we know that the consumers already have robust mechanism for transparency and choice: the Digital Advertising Alliance and its AdChoices icon program, which AAF and our members have long supported.  More than two million unique online users have already exercised choice through the DAA program Web site at www.aboutads.info. Moreover, unlike cookie blocking technologies from any one particular company, the DAA program works across all browsers and is backed by meaningful enforcement.

In the DAA’s view, Mozilla’s approach isn’t really about privacy: instead, it’s about helping some business models gain a marketplace advantage and reducing competition.

It’s clear that we shouldn’t let Mozilla take a cookie-blocking approach.  I would like to enlist your help in this campaign by asking you to send an email to StopMozilla@aboutads.info to

  • Tell Mozilla not proceed with its plans; and
  • Provide the DAA any examples or anecdotes you’d like to share about how Mozilla’s approach might negatively affect the Internet ecosystem

Thank you again for your time and commitment to addressing this very important issue for the future of the consumer-facing Internet.

AAF Alert: DAA Releases Mobile Guidance

The Digital Advertising Alliance (DAA) has released new a new Mobile Guidance for applying its Self-Regulatory Principles currently enforced on the web to mobile environments, in order to provide consumers with easily accessed privacy controls in this increasingly used medium. The DAA administers the AdChoices icon and the self-regulatory program for online behavioral advertising. AAF is a participating association of the DAA and sits on its board of directors.

The DAA Mobile Guidance advises advertisers, agencies, media, and technology companies how to provide consumers the ability to see and exercise control over the use of cross-app, personal directory, and precise location data in mobile apps. This enforceable guidance reflects the reality that companies and brands engage with their customers on a variety of platforms, including mobile, and explains how the DAA’s program applies consistently across channels to certain data practices that may occur on mobile or other devices. A key provided benefit is enhanced consumer transparency for the collection of data across different mobile apps.

The guidance builds on the 2010 Self-Regulatory Principles for Online Behavioral Advertising and its 2012 Principles for Multi-site Data, which are the basis for the digital ad industry’s successful Advertising Option Icon initiative. This self-regulatory program – the largest and most comprehensive in the interactive advertising industry – is responsible for the ubiquitous Advertising Option Icon that is served on trillions of advertising impressions a year, signaling to consumers that various forms of online data are being collected and used to deliver them advertising tailored to their interests, and offering them a centralized system to opt out of the use of that data.

The DAA consumer notice and choice program has been praised by the Obama Administration, the Commerce Department and the Federal Trade Commission. The DAA’s mobile guidance released today aims to offer businesses policies and consumers assurances that the same notice and control consumers have in desktop Internet advertising environments will apply in the more complex, evolving world of the mobile Internet.

“The advertising industry has long had the gold standard for industry self-regulation,” said AAF President James Edmund Datri. “This move into the mobile environment demonstrates our commitment, once again, to consumer trust and protection. Technologies and communications methods may change, but our promise to treat our customers in a fair and ethical way never will.”