Playing Politics Becomes Big Business For Marketers

Last April, voters in Inglewood, Calif., shot down Wal-Mart’s efforts to build a store in their town after the chain spent nearly $1 million to gain their support. Residents rejected a ballot initiative introduced by the world’s largest retailer that would have allowed construction of a 60-acre retail complex without local government approval.

In Arizona, the state legislature is now considering a bill that would restrict certain obesity- and health-related lawsuits against food companies, making it harder to initiate class action suits against national fast-food chains.

Consumer companies across the U.S. are learning that playing politics has become a crucial part of doing business. They are finding that a strong connection to consumers is not enough. They must also fight to win the hearts and minds of politicians, judges and voters.

“No single consumer can control you, but one judge can shut you down,” said Dale Erquiaga, vp of brand services at advertising and advocacy agency R&R Partners in Las Vegas. The shop’s clients include Yum!, parent of KFC, Jack in the Box and Taco Bell, which is monitoring the Arizona bill.

Companies facing government pressure are reaching beyond tools such as lobbying and PR into consumer-marketing methods, including image advertising. Sprint, for instance, has to balance constant regulatory challenges and a competitive market. Company rep Dan Wilinsky said senior-level public-affairs specialists screen all major ad and marketing programs. “We don’t do ads in a vacuum. We are aware of the regulatory environment,” he said.

Microsoft’s anti-trust problems played an undeniable role in the decision to develop the current kinder, gentler ad campaign by McCann Erickson, San Francisco. “The [brand message] is all about how Microsoft helps individuals realize their potential,” said Michael McLaren, McCann’s director of global accounts on Microsoft. “We are redressing people’s understanding of the corporation and giving them a more positive perception of the brand.”

Political experts say it is tough to think of a consumer brand that is not affected by some government influence. Most obvious are utility, insurance, healthcare, media, tech and automobile firms. “In this world, no corporation can ignore [the political environment],” said Jim Innocenzi, a partner in Alexandria, Va., political ad agency Sandler-Innocenzi.

DaimlerChrysler is a case in point. Working with public-affairs agency GMMB in Washington, D.C., the company is marketing itself as a leader in child-safety issues so it will have a seat at the table when government officials consider auto-safety regulations. The agency helped DaimlerChrysler initiate child-safety lessons to teach families how to avoid airbag injuries, said GMMB partner David Smith. Also, the shop has worked with a consortium of automakers, including DaimlerChrysler, on pushing states to pass child-seat laws and encouraging police groups to enforce the safety laws on the books. GMMB showcased DaimlerChrysler’s role in the programs in magazine and newspaper ads.

This type of multipronged outreach “is an extension of the work we do for candidates and public issues,” said Smith. “We know how to reach the target audience of policy makers and regulators [and create] simple messages for complicated social issues.”

Commercial clients often tackle public-policy issues through consortiums. For example, in 2000, a group of Arizona homebuilders, trade unions and other groups enlisted Sandler-Innocenzi and Washington public-affairs firm APCO to fight a Sierra Club-backed ballot initiative that would have restricted residential growth. Humorous TV and radio ads showed how a suburban family could suffer if the proposal took effect. The initiative failed.

Spending on one-shot public-affairs campaigns tends to be small, sometimes less than $1 million, said sources. But ongoing political consulting for corporate clients can be profitable, and often involves having direct access to client CEOs and other senior managers.

Marketers often build political support by first building public support, said Jeffrey Bell, managing partner at the Gallatin Group, a Seattle public-affairs firm. For three years, his agency used public relations and marketing to help Burlington Northern Santa Fe Railway win permission to build a fueling station over a natural underground water supply in Idaho. With help from local ad agencies, the firm used newspaper ads and direct mail pieces to convince officials to seal the deal in 2002.

Political agencies sometimes turn to advertising even if the target is just a handful of lawmakers. It “impresses on your audience that the client is really going the extra mile, that it is really making an effort,” Bell said.

Then there is the issue of timing. In February, as Nevada officials were weighing a change in utility rates, R&R put aside its lighthearted branding ads for Sierra Pacific Resources/Nevada Power. “We changed the ads to be more fact-based. When you have a rate increase pending, it’s not a time to be laughing in your ads,” said R&R’s Erquiaga.

At Wal-Mart, which is having zoning issues in Chicago, there is no crossover between marketing and government-affairs teams, said vp of corporate affairs Bob McAdam. The latter work with local political consultants on radio, direct mail and cable TV spots to address local ballot measures and similar issues, McAdam said. “There is no consideration of government affairs” in the consumer advertising, he said.

That may be a mistake, say political- marketing pros, who like to point out that politicians are also consumers and consumers are also voters. The key, said McCann’s McLaren, is to “stay in tune with all your constituencies, including government leaders.”