Electoral effects on marketing

The big news in the past week was, of course, the mid-term elections. The Democrats taking control of both houses of congress will presumably have some major impacts on the nation as a whole, but how will it affect marketers?

Advertising Age offered some speculation, opining that there will very likely be an effort to limit marketing, especially of fast-food, directed at children. There could be curbs on prescription drug advertising as well.

The article being in Ad Age, it paid no attention, of course, to trade promotion or channel marketing; which is just as well, since on the rare occasions when they address channel marketing, they usually get it all wrong.

To be fair, though, there probably will be little effect on channel marketers, so Ad Age is probably justified this time in ignoring the subject. Though congress has oversight responsibility relative to the Federal Trade Commission, it’s unlikely they will use it to press Robinson-Patman enforcement.

It used to be a truism that Democrats were more enthusiastic about R-P than Republicans, which made sense because both Robinson and Patman were Democrats, as was the president who signed the law, FDR. But that was a long time ago, and recent history indicates that any difference between the parties on R-P is muted at best. The FTC under the two most recent Democratic presidents, Carter and Clinton, was not noticeably more active than when Republicans were in charge.

The two most recent FTC actions relative to trade promotion show a split in regard to the parties. There was a Robinson-Patman case pursued in the Clinton years – a minimum advertised price case against the recording industry for price-fixing on CDs – and there was a (half-hearted) investigation of slotting by the commission in 2000-03 (I served on a couple panels at their hearings), undertaken at the direction of the Republican-controlled Senate commerce committee. The findings could be summarized as “this subject needs further study,” and that was the end of that.

Overall, the record of both parties over the past couple decades indicates that enforcement of R-P in any significant manner is not on their radar. The one exception to this might be the possibility that hostility toward Wal-Mart among some groups might spur action. This is unlikely, but possible.

There has been some talk about possibly restructuring Sarbanes-Oxley – my bet is that this is off the table for the next couple years.

A representative of the American Association of Advertising Agencies was quoted in Ad Age as saying, "All in all, with the first open presidential election in years looming in 2008, Democratic control of either house will be characterized by high-level debates on popular issues. In the advertising, marketing and communications category, that leaves a lot of room for grandstanding.”

Grandstanding being something both parties are good at, it’s something we can always anticipate. But there’s little reason to expect much real action in the area of trade promotion.