Government subsidizes lots of industries -- including the ad industry
If there was anything drilled into our collective heads as a result of the election a few weeks ago, it’s that the idea of “government” isn’t very popular. Or it’s not effective. Or it’s just too big, too wasteful, and it’s in the hands of the wrong people who are screwing it up. And government needs to be fixed, shrunk, or just needs to get the hell out of the way.
Well, be careful what you wish for. Because the ad industry, like a lot of business categories, makes a lot of money off the government.
A recent article in The New York Times brought to light that Domino’s Pizza received $14 million from an marketing organization called Dairy Management Inc., to test market new pizzas with more cheese. One of the pizzas ultimately became the “Wisconsin Six Cheese Pizza,” which was promoted on TV by Crispin Porter & Bogusky. Dairy Management is funded, in part, by the Department of Agriculture. It’s also one of the organizations that has supported the “Got Milk?” campaign over the years. Their mission is to promote cheese -- and help chains like Domino’s and Taco Bell use more and sell more of it, too.
So to make some connections, what we’re seeing is a line of money that goes from our government to ad agencies like CP&B to market the idea of eating cheese. And the spending works -- Americans eat more cheese than ever. However, as a society, we’re also unhealthier than ever, and among other things, we eat more cheese than we ought to. Our government tells us that, too, by spending money to fight obesity. How do we reconcile these conflating ideas?
I’ll give you another fun example: a few years back, some money was put aside to promote American shrimp with an earmark that John McCain famously called the “No Shrimp Left Behind” Act. (I guess this means if you’re out enjoying a Lowcountry Shrimp & Cheese Grits entree, there’s a chance the government has infiltrated your menu choices through and through. Be afraid!)
Here’s the conundrum: By subsidizing industries to market their products, the money our government supports jobs in advertising -- writers, art directors account people, directors, Web designers, photographers, the whole gang. All these folks then stay employed, pay taxes, and continue the cycle. Same with the employees of Domino’s, the dairy farmers, the shrimpers, etc.
So are we better off without government money? Let’s say, to follow election trends, that we need to stop this spending, or drastically curtail it. What would you eliminate? The cheese marketing? The shrimp marketing? Anti-smoking and other health-related initiatives? And since states are having financial troubles too, would you cut a state tourism budget? A state lottery budget?
Does government subsidize industries of all kinds? Yup. Does government waste money? Sure. The reality is that government-funded advertising initiatives, whether it’s for cheese, shrimp, lotteries, or Woodsy the Owl, spur commerce in some fashion.
Government subsidizes private industry so it can better market its offerings. Then when there are health, environmental, or other consequences, the government uses marketing to call attention to them. And since ad agencies promote products as well as call attention to the consequences of using them, agencies benefit coming and going.
If you’ve ever worked on a government-related account, federal, state, or local, you know that it’s an odd beast. There are rules and regulations surrounding everything, and yes, you could go to prison for falsifying billing records like some Ogilvy folks did a few years ago, but not many agencies are willing to turn down the chance for the stable money and prestige offered by a government account.
What’s the answer? Do we need to cut marketing initiatives out of the federal budget, other than, say, necessities like military recruitment? Would you want to limit the amount of profit an ad agency can make off of a government account? Some people want to cut the salaries of federal employees, so would you cut the salaries of ad agency folks working on federal advertising accounts?
There is the thinking that if government spent less, the private sector would have more money to spend -- and spend it on marketing among other things. But that shift would cost some ad people their jobs in the short term. I’m not sure too many agency executives will beat the drums calling for less government spending if it means less agency revenue.
These aren’t easy choices, and they’re typical of the American condition right now. It’s one thing to say “get government out of our lives” and quite another to make the decisions that would do it.
I have no idea where it’s all headed. It’ll be interesting to watch, that’s for sure. After all, as Americans we get the government -- and the advertising -- we deserve.
Note from Dan: This marks the 150th column I've written for Talent Zoo since 2002. Thank you to everyone who's read these columns, passed them along, and taken the time to write me or comment -- good, bad, or ugly. It means the world to me, and I truly appreciate it.
Since 2002, Dan Goldgeier has been writing the most provocative advertising columns about advertising and marketing -- over 170 of them, covering every related topic you can think of. Now based in Seattle, Dan is a copywriter and ad school graduate who's worked at shops big and small.
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