One of the highest-rated member services the 4A’s provides to its membership and the industry at large is our advocacy work in Washington, D.C. The tireless efforts of the D.C. team, led by Dick O’Brien, have resulted in an unblemished track record, or as O’Brien puts it, “We’ve never lost a fight.”
In 2014, those “fights” were dominated by two policy issues that directly impact the agency business: corporate tax reform and patent litigation reform.
The tax treatment of advertising remains a critical issue for the entire ad community. The 4A's has long fought to preserve 100% deductibility of advertising as an ordinary and necessary business expense. Two tax reform proposals introduced late in 2013 — one by House Ways & Means Chairman David Camp (R-MI) and one by Senate Finance Chairman Max Baucus (D-MT) — set the stage for the debate in 2014. Each proposal reduced the advertising deduction from 100% to just 50% over 5-10 years. The 4A's worked vigorously against the advancement of both plans through our coalition efforts in the states and directly in Washington. Grassroots meetings were hosted between 4A's members, coalition partners and tax policy leaders like Sen. Orrin Hatch (R-UT) and Sen. Charles Grassley (R-IA). The 4A's also lobbied Congressional policy advisors, tax counselors and legislative staff directly on Capitol Hill. All of these efforts helped keep the tax proposals at bay while a new Congress, under new leadership, is likely to lead a renewed charge for corporate tax reform beginning in 2015.
The Stop Patent Abuse Now (SPAN) coalition, formed by the 4A's, was especially active in 2014 advocating strongly for legislation to combat patent trolls — specifically, the abusive tactics of patent troll demand letters. With SPAN input and support, House Judiciary Chair Rep. Bob Goodlatte (R-VA) successfully shepherded his "Innovation Act" through committee and won overwhelming passage on the House floor early in 2014. However, Sen. Patrick Leahy's (D-VT) companion bill failed in his Senate Judiciary Committee, preventing any conference with Goodlatte's House bill and effectively stalling patent reform for the 2014 legislative session. Away from Capitol Hill, parallel developments in the courts did produce a significant result. In 2014, the Supreme Court decided in Alice Corporation v. CLS Bank that an "abstract concept" such as computerizing a business process (in this example a bank transaction) was not, in itself, patentable. While this outcome is still being examined, it has exerted a noticeable downturn in patent troll litigation since the decision was handed down. Given this higher court attention, the bipartisan appeal of the issue, new Republican leadership and continued White House endorsement, patent reform will re-emerge as a priority issue in 2015, second only to tax reform (see above).
Consumer Data Privacy
At the same time, data privacy concerns — long the center of many policy debates — noticeably receded with the continued failure of so-called "Do-Not-Track" proposals (legislative and technical) as well as a shift in scrutiny toward data breach prevention, online fraud and the information broker industry.
The 4A's, together with its industry partners in the Digital Advertising Alliance (DAA), successfully counteracted efforts by lawmakers, browser companies, standards bodies and public advocates to remove or restrict the use of consumer data in the delivery of interest-based online advertising (IBA). The DAA "AdChoices" program has now become the de facto standard for online advertising self-regulation and has expanded operations to affiliates in Canada and across Europe. DAA also published its first ad-specification guide for agencies implementing mobile IBA. The organization will soon launch "AppChoices," a tool that provides consumers even more information and choice in the use of their location data, personal directory files and cross-app activity for mobile advertising.
Also in 2014, the White House released its long-anticipated report, "Big Data: Seizing Opportunities, Preserving Values." This report largely vindicated the industry by acknowledging the success of self-regulatory solutions such as the DAA program. However, it also alleged that discriminatory data practices such as adverse decisions made on the basis of consumer credit or health data, are a serious issue. This same concern was expressed earlier in the year at the FTC's public workshop, "Big Data: A Tool for Inclusion or Exclusion?" The FTC is also looking with interest into emerging areas such as native advertising and the "Internet of Things" which could result in higher disclosure requirements for advertisers. 4A's Washington will continue to advise members and represent advertising interests as these discussions progress.
All of this ensued in the foreground of the mid-term elections, which produced a dramatic shift to Republican control of the U.S. Senate as well as a solidification of GOP majorities in the U.S. House and across state governorships. This new political reality will place the advertising business agenda on a new and different policy trajectory beginning with the 114th Congress and through the 2016 Presidential election.