Following four years of whiplash decrees via Twitter, the ad industry is looking forward to more deliberate decision making coming out of the US executive branch beginning January 20. Here, the American Association of Advertising Agencies’ executive vice-president of government relations, Allison Pepper, outlines the three areas likely to be most impacted.
’Boring’ may be a strong word, but we’re definitely in for a course correction versus what we’ve seen over the past few years. The last four years have been virtually unprecedented: whiplash decision making via Twitter, federal regulatory agency heads with sometimes tenuous credentials and acrimonious congressional hearings more reminiscent of a mixed martial arts cage match than any semblance of deliberative policy making.
While the issues that the advertising industry will face in the coming year and beyond are weighty and will be divisive at both the executive and the congressional level, it’s likely that we’ll at least see the return of a more traditional policy making process that has long defined DC. There are a multitude of issues facing our industry, but here are three of the most prominent areas of importance that a new Biden administration is likely to influence:
1. Diversity training programs
Back in September, the Trump administration sent shockwaves through the brand and agency world when it issued an executive order (EO) placing confusing new restrictions on the ability of federal contractors to offer diversity training programs to their employees.
In the wake of a very tumultuous summer that was ignited with the death of George Floyd, brands and agencies across the country had begun to double-down on revisiting their diversity training programs. For agencies and brands with federal contracts, this new EO threw that progress into doubt. Federal contracting is a huge source of business for many brands and agencies, and the threat of having their contracts canceled due to improper diversity training programs loomed large.
As EOs don’t magically disappear with a new administration, it’s likely that the Biden administration will soon formally revoke or rescind the EO. For brands and agencies that put their diversity training efforts on hold, a new Biden administration should give reassurance to restarting those efforts.
Also worth noting, for brands and agencies interested in pitching for new business from the federal government, a Biden administration should present new opportunities in the areas of energy, environment, healthcare and infrastructure.
2. Privacy and its many splinter issues
Privacy has always been a bit of an amorphous topic. Even the most well-versed legislators and regulators sometimes have trouble wrapping their minds around the issue, as the truth is it really ceased to be a singular subject some time ago.
While no one piece of privacy legislation is going to resolve all the issues bubbling at the core and on the edges of privacy, the advertising industry did come together early in 2019 to begin drafting comprehensive federal privacy legislation via a group called Privacy for America to work towards a strong framework with which to address privacy issues.
With the passage of the California Consumer Privacy Act (CCPA) and now Prop 24, states around the country have begun to introduce their own versions of comprehensive privacy legislation.
While comprehensive privacy legislation will ultimately be up to Congress to pass, the Biden administration could have a strong influence on any new or existing privacy legislation. Vice-President-elect Harris comes into office with a wealth of privacy knowledge due to her experience as attorney general of California.
Any brand or agency not currently involved with representation in DC or the states should start thinking about how they can get involved to have their voice heard in 2021 and beyond.
3. Taxes, taxes, taxes
Taxes are an evergreen issue for the advertising industry. Advertising is an easy target and it frequently finds itself in the cross hairs of legislators looking to raise funds. And US Treasury funds are running low here at the end of 2020, poised to go lower as Congress eyes another trillion-dollar relief bill.
While President-elect Biden has already stated his intent to raise the corporate tax rate back to 28%, it’s questionable as to whether this would be possible if Senator McConnell and Republicans hold the Senate. The question of advertising deductibility is always on the table, but again, if Republicans hold the Senate it’s unclear if new taxes will be able to move.
But at the rate the deficit is growing, and the apparent return of deficit hawks in the Senate, it’s not entirely possible to rule out attempts at new taxes in 2021.
Much remains unprecedented as we head into the new year. A return to some semblance of normalcy on the policy front – with some welcome, progressive changes – is in store for the industry.
And in yet another unprecedented twist, next year a lot of us will be celebrating by saying: ’in with the old, out with the new’.
Allison Pepper is the American Association of Advertising Agencies’ executive vice-president of government relations.
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