Who needs lobbyists? See what big business spends to win American minds
Forget lobbying. When Washington, D.C.’s biggest trade associations want to wield influence, they often put far more of their money into advertising and public relations, according to a new Center for Public Integrity investigation.
Take, for example, the American Petroleum Institute. The oil and gas industry trade group spent more than $7 million lobbying federal officials in 2012. But that sum was dwarfed by the $85.5 million it paid to four public relations and advertising firms to, in effect, lobby the American public — including $51.9 million just to global PR giant Edelman.
From 2008 through 2012, annual tax filings show, the API paid Edelman a staggering $327.4 million for advertising and public relations services, more than any other contractor.
It’s been well-publicized how much industry spends on lobbying the government, but little is known about how much money goes toward influencing the public. In an effort to find out more, Center for Public Integrity reporters examined the tax returns for trade associations that spent more than $1 million on lobbying in 2012. The IRS requires the groups to report their top five contractors.
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Of $3.4 billion in contracts reported by the 144 trade groups from 2008 through 2012, more than $1.2 billion, or 37 percent, went toward advertising, public relations and marketing services, more than any other category. The second-highest total, $682.2 million, or 20 percent of the total, was directed toward legal, lobbying and government affairs.
By industry sector, the biggest clients of PR, marketing and ad services were energy and natural resources associations.
The public relations industry is on a growth tear while the number of federally registered lobbyists is actually shrinking. Public relations work, unlike lobbying, is not subject to federal disclosure rules, and PR and advertising campaigns can potentially influence a broader group of people. In addition to Edelman, among the other major players are President Barack Obama’s go-to ad agency GMMB, “issue-advocacy” firm Goddard Gunster and government policy specialists Apco Worldwide.
While not a complete accounting of spending, the analysis provides a glimpse into just how important the public relations industry is to groups seeking to influence public policy.
Related: Where money does the real talking
Big energy leads spending
Boosted by the $327.4 million-worth of contracts Edelman inked with the American Petroleum Institute — consistently the largest contracts the Center found in five years of collected data — the energy and natural resources industry outspent every other sector on advertising and public relations.
The API, Growth Energy — which represents ethanol producers — and other energy and natural resources trade groups collectively spent more than $430.5 million on PR and advertising to help burnish their image between 2008 and 2012.
It’s not clear how much of the total went into the bank accounts of the PR and advertising firms and how much was passed on to media companies. Edelman declined to comment with Center reporters for this story. Edelman likely left some of the work for the API to its Blue Advertising subsidiary, which offers media planning and placement in its services and discloses work for the oil giant on its website.
Related: What industries spend for your attention
Other top energy and natural resources interests included the National Fisheries Institute, which represents seafood harvesters, wholesalers and retailers, and the National Biodiesel Board, whose members take recycled cooking oil and animal fats and turn them into fuel.
Business associations — led by the U.S. Chamber of Commerce — represented the second largest industry category, together paying PR and advertising firms at least $214.9 million from 2008 through 2012. The U.S. Chamber, the nation’s biggest lobby and a prolific spender on political ads, paid $173.5 million to its top advertising firms during the five-year period.
In 2010 and 2012, all five of the trade group’s top contractors were advertising agencies.
The U.S. Chamber paid Republican media-buying firm National Media Research, Planning & Placement more than $60.8 million for advertising services in 2009 alone. National Media, based in Northern Virginia, researches voter demographics and behaviors and places ads in key media markets.
Related: American Petroleum Institute ad
Another top advertising contractor for the U.S. Chamber was Revolution Agency, which the trade group paid more than $38.2 million from 2010 through 2012.
Revolution is a Northern Virginia-based advocacy firm that possesses the “Creativity of Madison Avenue” and the “Strategic Discipline of a Political Campaign,” according to its website. Its partners all formerly worked as staffers or consultants for Republican lawmakers, and the firm’s clients have included business groups and the telecommunications industry.
The agency was behind a public affairs campaign targeting the proposed Consumer Financial Protection Bureau, an agency birthed out of the 2008 financial crisis. The campaign on behalf of the U.S. Chamber included a TV ad that attacked the proposed bureau as a “massive new federal agency that will create more layers of regulation and bureaucracy.”
The finance, insurance and real estate sector ranked third in contracts with advertising and PR agencies, paying $184.5 million to contractors, including favorites the Most Organization, a West Coast advertising agency, and Locust Street Group, a “grassroots” advocacy firm. The sector was led by the National Association of Realtors and America’s Health Insurance Plans.
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The Most Organization, based in Orange County, California, earned more than $116.7 million from 2010 through 2012 for its work to promote the National Association of Realtors in a national advertising campaign.
Fourth in PR spending based on top contracts was the food and beverage industry, which paid out $104.5 million from 2008-2012. Big spenders included the American Beverage Association, which has been shelling out millions to try and keep cities and states from taxing sugary drinks.
Rounding out the top five industries for PR and advertising spending was communications and electronics, led by CTIA — The Wireless Association, which represents telecommunications companies like AT&T Inc. and Verizon Communications Co. Also in that category: the Software Alliance.
Steve Barrett, editor-in-chief of trade magazine PR Week, says it’s clear why trade associations rely so heavily on PR and advertising.
Related: Methodology
“They certainly want to influence the general public,” he says, “because the general public will then influence the politicians, the lawmakers or the regulators in that particular industry.”
Edelman leads PR firms
The Center for Public Integrity’s analysis includes the top five contractors for each trade association. Annual totals need to be at least $100,000 to be reported. The Center for Public Integrity looked only at trade associations that spent more than $1 million on lobbying in 2012, according to the Center for Responsive Politics. [See Methodology.]
Edelman’s lucrative contracts with the American Petroleum Institute helped the PR giant earn $346.8 million, significantly more money from top trade associations than any other advertising or public relations firm, according to the Center for Public Integrity’s analysis. But the oil industry trade group wasn’t the firm’s only client.
Related: Why industry is trying to tell you how to think
Others included the Business Roundtable ($9.9 million), a group of CEOs who advocate for business-friendly policies, the Software Alliance ($2.5 million) and the Grocery Manufacturers Association ($1.8 million).
There’s more to this story. Click here to read the rest at the Center for Public Integrity.
This story is part of Consider the Source. Seeking to ‘out’ shadowy political organizations flourishing in the wake of the Supreme Court’s Citizens United ruling. Click here to read more stories in this investigation.
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Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.
