- Washington Guardian - Friday, November 16, 2012

The government has spent more than $16 billion over the last decade on outside advertising, marketing and public relations contractors, feeding a cottage industry of inside-the-Beltway and Madison Avenue firms that help federal agencies burnish their images and tailor their messages, an investigation by theWashington Guardian and Northwestern University’s Medill News Service has found.

Many of the contracts are awarded without full competition, and some of the funding goes to foreign contractors whose names the government refuses to disclose, the review of federal spending records from fiscal years 2002 through 2012 found.

The money is above and beyond the millions of dollars a year that agencies already spend on their fulltime press, communications and media operations, and it has gone to pay for projects as varied as NASCAR and sports sponsorships, recruitment efforts for the military services, veterans benefits, welfare aid, and programs that help multi-billion dollar multinational corporations pitch their products to overseas customers, the records show.

Those on the front lines of the work say federal agencies’ reliance on advertising, PR and media firms is just one of the many signs of how much the era of instant 24/7 Internet and TV access has transformed the government’s job of communicating to Americans. 

A few decades ago, the government’s main advertising business focused on pitching public service announcements, like the U.S. Forest Service’s Smokey the Bear fire prevention commercials or a 1960s-era Labor Department commercial featuring the comic book heroes Batman and Bat Girl talking about equal wages for women.

Today, consultants are brought in for communication projects as targeted as recruiting translators and linguists for national security agencies and as urgent as launching advertising campaigns like the one the Obama administrationrushed onto airwaves in Pakistan in September, featuring the president and Secretary of State Hillary Clinton apologizing for an Internet video that originated in the United States and offended Muslims worldwide. “We reject all efforts to denigrate the religious beliefs of others,” the president was quoted as saying in an ad designed to lower tensions in Islamic countries.

Some advertising campaigns identified by the Washington Guardian and Medill News Service, however, are likely to leave taxpayers and policymakers who advocate a smaller government scratching their heads. For instance:

  • The Veterans Affairs Department has spent $25 million on advertising since 2011 to encourage more retired troops to take advantage of its mental health services, luring new customers into a system that is suffering historic backlogs for the people it already tries to serve. The Washington Guardianreported earlier this month that the backlog of benefits cases has nearly doubled in the last two years alone. VA officials said they did not have any statistics to show how effective the campaign “Make the Connection” has been in getting vets suffering from mental illness to go to a Web site to enroll. But a key veterans’ mental health expert, Dr. Tom Berger, who serves on one of the VA’s oversight committees, has criticized the ad campaign, saying it lacks targeting and fails to engage those vets who are older and have limited knowledge of using technology. 
     
  • The Labor Department spent a half-million dollars on a public relations firm to advertise the benefits of a clean energy retraining program, which the Washington Guardian reported in September missed— by far — its goals of retraining workers.
     
  • The Agriculture Department spent millions since 2008 on ads designed to encourage more Americans to enroll for food stamps — many in Spanish and targeted at Hispanics — at a time when the government safety net program already has record expenditures. The department ended the ads shortly before the election, after conservatives complained.
     

Federal agencies insist the advertising and marketing help is essential to their missions, saying the money has gone to recruit workers, sell American products overseas, advertise services and inform and educate the public about dangers as well as opportunities and assistance.  

“We really want to represent America’s farmers and ranchers, and those are raw commodities.  They demonstrate a full array of the types of food that are produced here in the United States,” explained Matt Herrick, a spokesman at the U.S. Agriculture Department that has spent hundreds of millions of dollars to help American companies market their agriproducts overseas.

Nonetheless, the entire line of spending is likely to draw scrutiny as congressional budget-cutters look for savings to reduce massive federal deficits.

“At a time when we’re facing a $16 trillion debt and the impending bankruptcy of safety-net programs like Medicare and Social Security, spending $16 billion on advertising consultants raises troubling questions,” says Sen. Tom Coburn, R-Okla., who is retiring at the end of 2016 but spent years in Congress seeking elusive deals to cut spending. “Congress has an obligation to find out who made these decisions, and for what purpose, and then hold agencies accountable for any misuse of taxpayer funds.”

The Washington Guardian and Medill News Service reviewed a decade’s worth of federal spending records to provide the first-ever accounting of how much money the government spent hiring contractors to create or place ads, tailor messages, handle public relations or craft communication strategies. The computer analysis found that federal agencies awarded more than 190,000 contracts and spent more than $16.3 billion since 2002 on the various efforts — an average of about $1.5 billion annually. (Click here to see the methodology.)

That total, however, does not include the amounts spent each year by the various military services on the hundreds of promotional flyovers they stage with aircraft to wow audiences at sporting events. The Pentagon doesn’t know how much is spent on those efforts, because it doesn’t track the costs. 

The biggest spenders among the agencies were the Pentagon, and the departments of the Treasury and Health and Human Services.  The spending on the ads and image-making appears to have peaked under President George W. Bush in 2008 at nearly $2 billion, and has fallen under President Barack Obama to $1.3 billion in 2011, the last year with full spending records available.

Though most ad and communications campaigns were months or years in the making, federal agencies frequently skipped bargain shopping that would have gotten taxpayers the best deal. At least 30 percent of the advertising, marketing and communications contracts were awarded without full and open competition, the review found. 

A handful of firms around the country are the biggest beneficiaries of the burgeoning workload, hauling in significant tax dollars.  New York-based ad firm McCann-Erickson Worldwide raked in $1.3 billion in contracts since 2002.  Chicago ad firm Leo Burnett USA was also a big winner, getting $921 million in contracts, mostly from the Defense Department.  

Not all of the contractors can be publicly tracked. The government — especially the Defense and State Departments — hires many foreign firms for advertising, marketing or communications work, and refuses to disclose their names. About $161 million over the last decade was awarded to “miscellaneous foreign contractors” for contracts ranging from a Fourth of July fireworks show to sculptures for embassies to expenditures for the newspaper “Baghdad Now,” the Washington Guardian and Medill News Service review found.

Sometimes, different federal agency campaigns offered conflicting messages. For instance, the Health and Human Services Department was spending millions crafting and placing ads encouraging Americans to eat healthier and be more fit, while the U.S. Agriculture Department was spending tens of millions pitching wines, popcorn, hard liquor and chocolates to foreign markets — a delicious dichotomy for sure.

The value of the government’s billion-and-a-half-dollar-a-year outside messaging machine lies in the eye of the beholder. “Advertising is one of the more effective ways of [recruitment] … advertising is one of the two resources that you can turn on and off easier,” said James Dertouzos, a former economist with RAND Corporation that published a 2009 study that concluded the Army’s ads were effective in attracting new recruits, but could be made more effective.

Rep. Jack Kingston, R-Ga., sees it a different way. This summer he and Rep. Betty McCollum, D-Minn., led an unsuccessful effort in Congress to ban the military services from spending money on sports sponsorships, such as putting the National Guard’s logo on Dale Earnhardt Jr.’s race car or the Marines’ sponsorship of mixed martial arts competitions. Kingston’s amendment to the military’s spending bill, which would have saved taxpayers between $70 million and $80 million in 2013, was narrowly defeated in the House in July by a 216-202 vote. 

But along the way, Kingston and McCollum educated their colleagues about some of the issues involved and signaled it is a fight that is unlikely to go away in an era of burgeoning debt and fiscal cliffs. For instance, they noted that only 10 percent of NASCAR fans fall between the ages of 18 and 24, an optimal recruitment age for the military. They also questioned the need for aggressive military recruitment advertising when the Marines and Army plan to cut 103,000 from their ranks.

And they noted comments made by a National Guard official to USA Today that the Guard’s $26.5 million sponsorship generated 24,800 recruitment inquiries in fiscal year 2012, of which only 20 were qualified.

“I just don’t see how seeing a logo on their favorite race car or on a fisherman’s visor is going to encourage someone to join the military,” Kingston declared during the debate.

But Kingston’s and McCollum’s efforts did appear to have an impact: This summer, the Army announced it was ending its sponsorship of sporting events.

Like Kingston and McCollum, Sen. Coburn has sought to shine light on the Agriculture Department’s Market Access Program, which since 1999 has doled out more than $2.1 billion to help American agriculture companies pitch their products in foreign markets. He issued a report this summer questioning why the government was using tax dollars to assist large agribusinesses and its industry trade groups — such as California winemakers, almond growers, candy and popcorn manufacturers and distillers — compete overseas, when combined they had billions of dollars in annual revenues.

“Despite the billions of dollars in taxpayer funds, little, if any, data exist to show how the program has had any significant impact on American agriculture’s total share of global exports,” Coburn declared in his report. “…The time has come to debate whether the federal government should be in the business of promoting private market goods to foreign buyers.”

The Republican senator may have found an ally in the Obama administration, which has tried to cut MAP and declared in its 2011 budget savings proposal that the program’s “economic impact is unclear and it does not serve a clear need.”

While bipartisan sentiments to rein in advertising and marketing spending appear to be rising, the actual job of making cuts is complicated by politics. Big contractors, major agribusinesses, trade lobbies and even NASCAR have their protectors in Congress, and thus far they have been fairly effective in warding off major cuts. And then there’s the added challenge of determining what constitutes advertising and marketing.

The Congressional Research Service’s Kevin Kosar noted in an April 2012 report that there is no official definition for what constitutes federal advertising and no central authority for approving such expenditures. He also noted that the intention of the ad often determines the public’s perception of its value.

“Americans have long been of mixed mind about advertising. On the one hand, advertising is beneficial insofar as it provides information. On the other hand, advertising (be it private or governmental) often attempts to persuade individuals to alter their behaviors,” Kosar wrote. “Unease with advertising can be magnified if the advertiser is the government, especially if an advertisement conflicts with widely held beliefs about government.”

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