Matthew Kandrach – President, CASE
July 4, 2020
Despite lawmakers’ public calls for national unity during this unprecedented public health and economic crisis, staunch policy disagreements on everything from lockdown orders to protests have widened the country’s political divide to its most troubling state in years. That’s why, when 74 members of the U.S. Senate and over 240 members of the U.S. House still manage to form a consensus on policy guidance, it deserves the full attention of everyone in the capital.
These majorities of both the House and the Senate recently sent two letters to the Trump administration that emphasize the importance of advertising to protect the public during this pandemic. Boasting wide bipartisan support from both ends of the political spectrum, the letters encourage President Trump and Office of Management and Budget (OMB) Acting Director Russ Vought to expedite the use of pre-approved funds across federal agencies to be used for public awareness campaigns on local media outlets.
As the president of a consumer organization that is devoted to the singular cause of promoting consumer interests, I cannot stress enough how beneficial the White House adhering to these members’ advice would be to safeguarding the public’s welfare. Misinformation, public fear and deception from bad actors have become hallmarks of this pandemic. Public awareness campaigns from federal, state and local governments can counter these negative externalities, benefitting everyone’s health, economic security and safety in one fell swoop.
Perhaps no point underscores the need to inform the public in a timelier fashion better than today’s abysmal consumer sentiment numbers. Despite rising slightly since May, the sentiment index (which measures consumers’ optimism about the economy) is still sitting at a paltry 78.1 percent, compared to 98.2-percent at this time last year. Inaccurate reports on blogs and social media, not to mention public confusion stemming from oft-changing governmental lockdown policies, continue to make consumers hesitant to shop in stores and patronize their local restaurants.
Advertising has always been known to improve consumer confidence and economic conditions in downturns. During the rebound from the 1981-1982 downturn, for example, advertising is credited with increasing sales by 256-percent. The benefits it would yield during a pandemic-caused recession would likely surpass any statistical benefits the country has seen from advertising in the past. By providing the latest re-opening benchmarks and sound scientific based guidance on safely re-engaging in the market, the government can help to alleviate the public’s concerns.
Aside from bolstering consumer sentiment, COVID-19 public awareness campaigns from the government can also be instrumental in reducing the fraud cases that have risen dramatically against America’s most vulnerable citizens. The Federal Trade Commission (FTC) has already fielded nearly 50,000 unique instances of COVID-19-related complaints, many of which have targeted the nation’s elderly. The scams have ranged from callers who pose as government caretakers and take their Medicare and Social Security numbers to the peddling of forged World Health Organization (WHO) testing kits online. These COVID-19 related cases have already cost consumers over $36 million, and if the government does nothing, that total will increase by tens of millions more before the year’s end.
Government public awareness campaigns that target this fraud would protect the American economy from additional and completely avoidable harm. Advertising in this fashion represents a foolproof way to protect the public safety and economy in a way that both sides of the political aisle should be able to support.
These agencies’ ad budgets have already been approved and set aside, so Washington can complete these campaigns without needing to spend much more. That being said, with trillions already being spent on COVID-19 relief, it may also be prudent for the White House and Congress to consider making supplementary investments in the advertisement market to protect the efficacy of the stimulus funds it has already allotted to get the economy running.
To that end, Sens. Mitch McConnell (R-Ky.), Chuck Schumer (D-N.Y.) and the rest of Congress should consider making portions of businesses’ advertising spending an allowable, forgivable expense within past and future relief packages. Federal, state and local governments should also consider beginning ad partnerships with hard-hit sectors, including airlines and restaurants, to help build consumer confidence within these critical industries. Either of these supplementary ideas would help significantly in boosting employment and economic activity in all regions of the country.
At a minimum, however, the White House should seize on this easy opportunity to protect the interests of U.S. consumers by looking at the advertising ideas that strong bipartisan majorities of both chambers of Congress have already proposed. Operationalizing existing government public awareness campaigns might not seem like a trailblazing policy proposal, but it will bring significant returns on investment during this time of great need at no cost to taxpayers. Here’s hoping that OMB and the rest of the Trump administration see as much value in doing so as has the legislative branch.
