The Health Insurance Association of America

One of the most fascinating trends of the past several years is that of political consulting firms' setting up subsidiaries to contract out work with businesses. Political firms have merged with Madison Avenue advertising shops or have created their own operations to tap into this lucrative market. In the midst of the Clinton administration's push for health-care reform in 1993, a little-known trade association in the insurance industry changed forever the work of consulting with private-sector clients. The Health Insurance Association of America (HIAA), opposing the Clinton administration's plan to overhaul the nation's health-care system, began a campaign to sway public opinion against the White House's proposal. In July 1993, the trade association debuted a series of advertisements depicting a fictional suburban couple expressing their concerns with the administration's health-care proposals.

Months before this, the HIAA had retained the services of Ben Goddard and the Malibu, California-based agency Goddard-Claussen/First Tuesday to shape its ads, settling finally on those depicting a husband and wife seated at their kitchen table. The ads themselves were masterful. The anxieties of this suburban couple played out in the settings of their living room and kitchen. The now-famous series of television ads, starring actor Harry Johnson and actress Louise Clark, highlighted what the commercials claimed were specific passages in the White House's reform proposal, such as community ratings, price controls, and, in the words of the fictional character Louise, " rationing, you know, long waits for health care and some services not even available."

Though several ad formats were tested with focus groups, including one using celebrities discussing problems in the health-care system, from the beginning the familiar suburban couple at their kitchen table " resonated very powerfully with people in focus groups around the country, " according to Ben Goddard.(n2) Inasmuch as the intended audience for the commercials had been targeted as women over the age of thirty, explained Robin Toner of the New York Times, " it was not an accident that Louise was so dominant." (n3) The actress playing Louise was depicted discussing the health-care plan with her coworkers in the glass-doored offices of a business emblazoned with the name Harry and Louise Enterprises. A schoolteacher, Louise's fictional sister, is shown in her elementary classroom, with the words health care dimly visible on the blackboard in the background, an ambitious lesson plan for a classroom of elementary school students. This advertisement series ended with a fifteen-minute ad depicting the fictional characters Harry and Louise engaging in a question-and-answer session with William Gradison, president of the HIAA and a former Ohio congressman.

The first HIAA advertisements aired in July 1993, months before President Clinton formally unveiled his health-care reform package.(n4) Once the ads were on the air, pollsters with Goddard-Claussen/First Tuesday conducted daily and weekly tracking polls to show how the public was responding to the advertisements and to develop a second series of spots. The polling, explained Susan Neely, the HIAA's senior vice-president for public affairs, " was the cutting edge of our whole campaign" (Barnes 1995: 1331). The strategists with Goddard-Claussen/ First Tuesday used focus groups, surveys, and tracking polls to gauge the public reaction to the advertisements. In its focus groups, the agency found that many viewers perceived the Harry and Louise characters to be an unsympathetic couple with little appreciation for the difficulties that most Americans have affording adequate medical care.(n5) Responding to these early focus groups, the firm released a new series of advertisements with a larger group of family members and neighbors (including Harry's fictional brother, who decries " community ratings" in health insurance, a character described in HIAA literature as " an under-thirty yuppie").(n6) An African-American actress portraying a fellow employee at the fictional Harry and Louise Enterprises also became a counterpart to the actress playing Louise, as they discussed the implications of healthcare reform for their business.

Ad spots produced by Goddard-Claussen/First Tuesday for the HIAA aired almost entirely in small- and mid-sized media markets, as well as in the Washington, D.C., market. Nearly 90 percent of the HIAA's advertising budget was spent on markets outside of the capital (West et al. 1996: 58). Advertisements aired in Montana, North Dakota, Georgia, Tennessee, Oklahoma, California, Missouri, and Louisiana, as well as New York City. " They moved the needle not just inside the Beltway but across the country, " explained consultant Carter Eskew (Barnes 1995: 1331). Cable television networks, including the Cable News Network and other news-oriented networks, also aired the ads.

In all, the HIAA spent nearly $15 million on the campaign, using the latest in polling, advertisement production, and media buying, which, as the association's Susan Neely explained later, " allowed a little old trade association to have an impact way beyond its size" (Barnes 1995: 1331). Its advertisements, writes Barnes, " sold many companies and trade associations as never before on the value of expert political advice" (1995: 1331). The advertisements also were thought to have compelled the White House and congressional Democrats to withdraw their proposed reforms only weeks before the November 1994 election and to prompt the Democratic National Committee to initiate an unprecedented series of early advertisements in July 1995, well over a year before the 1996 presidential election.

From the collapse of bipartisan support for the administration's health-care proposals, the White House was reminded of the importance of shaping public opinion on legislative issues through television advertisements, a lesson also not lost on a host of businesses wanting to further the techniques of issue management and public relations. " As he struggled to come to terms with the 1994 Republican sweep of Congress, " wrote Alison Mitchell of the New York Times, " President Clinton made one point to anyone who would listen: he had lost the fight to overhaul health care, the centerpiece of his agenda, because his opponents went on television and defined his program." (n7) Vowing not to allow this to happen again, the White House went to work with the Democratic National Committee to tout the accomplishments of the Clinton administration on the nation's airwaves with a series of commercials in July 1995 that would be used to help shape the election contest months before his Republican rivals began airing their own advertisements.

The 1996 Election and the Marketing of Political Consultants

Millions of dollars are spent annually by corporations to chart the forces moving that most elusive of creatures, the American consumer. Billions more are spent on advertisements to sell everything from health insurance to prescription drugs to mouthwash. With the average household in America watching television nearly seven hours a day, businesses realize that they must know with greater accuracy the needs of their customers and how to reach them through advertising.

Politicalconsultants make up an industry of literally hundreds of firms, employing thousands of people and annually bringing in hundreds of millions of dollars. Nearly every campaign retains the services of these professionals. A growing number of firms offer all of the consulting services under one roof, combining public opinion research, advertising, and strategy into a form of consulting that has come to dominate contemporary American politics. Simply collecting and keeping track of the advertisements of a rival is now a large part of the work of a campaign. Where candidates once coveted relationships with voters in their districts, they now purchase lists of these same voters on CD-ROMs and data files on the Internet as part of the new arsenal of consulting and campaign technologies.

Public relations, advertising, and polling work for private clients and businesses has been a growing part of the landscape of Washington-based political firms. Having long taken on business clients to solve what is known as the off-year problem, political professionals have marketed themselves more aggressively to corporations and businesses in the past decade, blurring the lines between political consulting, advertising, and public relations. " We also try to make life safer for corporate America, " Republican consultant Bill McInturff explained to BusinessWeek (Fitzgerald 1996: 10). Each year for the past several years, Campaigns and Elections, the National Journal, Advertising Age, and related publications have documented the growing use of politicalconsultants by businesses.

The recent connections between political consulting firms and private-sector clients can be attributed to many different factors. New restrictions on lobbying, particularly the gift ban passed by Congress in 1995, have prompted some of the nation's largest businesses to shift to advertising and public relations. As John Stewart of National Media Incorporated, a Republican consulting firm that works with dozens of businesses, explains, " It is harder to lobby in a traditional sense" (Teinowitz 1997: 28). Businesses have also realized that issues must be won in the congressional districts before they can become more important in the context of lobbying and government relations. One consultant explains, " What corporations are beginning to see is that advertising sets a context to prepare the ground for a lobbyist's visit. You have to get a critical mass of the public interested to get on any politician's radar screen" (Teinowitz 1996: 28). Corporations, for these and other reasons, now regularly include large expenditures of advertising, polling, and public relations dollars in their lobbying budgets.

Although the bulk of political consulting firms concentrate nearly all of their efforts on working with the campaigns of elected officials, a small but growing number of consultants have offered their polling, media buying, and public relations services to a new group of business clients, a trend that began in the early 1980s and became more pronounced after 1995. In the aftermath of the 1996 election, as reporters and journalists directed more attention to evaluating the Clinton reelection effort, journalists began to uncover the continuing trend of politicalconsultants ' plying their trade with businesses. Although ethical issues and questions of conflict of interest between these consultants and their business clients became the center of much of the journalistic coverage, less remarked upon was the extent to which the distinction between political consulting, advertising, and corporate lobbying had become even more indiscernible in the wake of the 1996 election.

The White House polling team of Mark Penn and Doug Schoen, as well as the firm of Squier, Knapp, and Ochs Communications in Washington, were involved in Clinton's reelection effort. Penn, Schoen, and their staff carefully analyzed the electorate for all discernible trends of possible relevance to the campaign. Working late into the evening, the pollsters interrupted weary suburbanites, using questionnaires on issues ranging from their opinions of the presidential candidates to their favorite magazines and music and their television viewing habits.(n8) Meticulously analyzed, these polls formed a startlingly accurate portrait of the electorate, one dissected into lifestyle cohorts and message clusters.

Aided by technological innovations, the White House and the Democratic National Committee shifted many of its resources to advertising in local markets. QRS NewMedia, a firm operating in conjunction with the Clinton reelection staff in Washington, used databases to analyze the audiences of local news broadcasts, allowing the campaign to pick a station or program in a market for interviews with the candidates or their spokespeople based on the makeup of its audience. Although such media tours have been a commonplace practice over the years, QRS coupled this with careful analysis of the audiences in these local markets to help shape the new terrain of political campaigning.

In the wake of the 1996 election, several of the figures associated with the White House found themselves under more scrutiny for their work as consultants with some of the nation's largest companies. The access of these consultants to the Clinton administration after the 1996 election became a story in the White House inasmuch as these consultants and pollsters continued to keep many of their private-sector clients and appeared unwilling to disclose publicly the full extent of their activities on behalf of their business client portfolios.

In May 1997, the Washington Post detailed Penn and Schoen's work with some of the nation's largest corporations, including AT& T and Texaco.(n9) The pollsters continued to have access to the White House while working for a growing roster of corporate clients, including Avis, Eastman Kodak, Honeywell, Nynex, Procter and Gamble, and Sony. Penn, Schoen, and Berland Associates have worked as consultants with the White House, the Democratic National Committee, congressional leaders, and prospective candidates, including with Hillary Rodham Clinton in her Senate campaign, and, until October 1999, with Vice-President Al Gore in his presidential campaign, while continuing to expand their portfolio of corporate and foreign clients, including Microsoft, the Personal Communications Industry Association, and the Central American Bank for Economic Integration.

In February 1997, Alicia Mundy of Media Week documented that the advertising and media buying team from the Clinton campaign was also plying its skills with some of the largest businesses in America, most notably as part of a multimillion-dollar public relations campaign for Proctor and Gamble (Mundy 1997). The former White House advertising team used its expertise with buying advertisement time in local markets as part of a public relations campaign by Procter and Gamble. As a representative of Squier, Knapp, and Ochs Communications explained to MediaWeek, " That's why political firms are geared up for this kind of image battle, we can do faster turnaround on ads, respond quicker, we know all the media markets, we know which interest groups have more power with the press, and we know the media" (Mundy 1997: 26).

The Communications Company, a subsidiary of Squier, Knapp, and Ochs Communications, signed on a roster of corporations in the months following the November 1996 election. The firm used the same advertising and media buying team from the 1996 Clinton campaign, led by Jamie Sterling, to buy television time for businesses, including Proctor and Gamble. The Communications Company also signed on with America Online, Florida Crystals, and Ameritech.(n10) That these pollsters and media buyers are on retainers by large corporations is only the latest of the traffic across the lines of campaigning and industry in the 1990s.

The Democratic firms described here are not the only political firms involved in working with both those holding elective office and private businesses. In 1995, National Media, a Republican consulting firm with close ties to the 1996 Dole presidential campaign, decided to become semiautonomous from political candidates and to work more carefully with businesses on advertising, polling, and public relations. Market Strategies, a Michigan-based political firm with a long record of work for Republican candidates, also opened an office in Washington in 1995 to work exclusively with business clients. In February 1995, the Republican consulting firm of Gannon, McCarthy, and Mason in Washington was retained by the Competitive Long Distance Coalition as a part of its two-year lobbying effort on telecommunications legislation, " a reinforcement, " in the words of John Persinos of Campaigns and Elections, " of a new trend whereby industry groups enlist pollsters and media consultants to wage political campaigns over legislative issues" (1995: 34). From utility deregulation to global warming to computer encryption technology, Republican firms have been as active as Democratic firms in seeking out clients in the business community.

The so-called media tours are yet another area in which politicalconsultants have marketed their expertise with businesses and private clients. Mark Steitz, former communications director of the Democratic National Committee, founded QRS NewMedia in the 1996 reelection effort of the Clinton campaign to arrange interviews with the candidates and their spokespeople in local markets. QRS NewMedia is now expanding to include clients from private businesses. Describing its work as " targeted efforts in a fragmenting media market, " QRS offers its services to businesses interested in working with local television producers in markets across the country. " There are a lot of people in the [business] world that spend a lot of time trying to get on television. Up until now, " explains Steitz, " they have focused on getting on national television. But local television is exploding. We have an opportunity to help them get on better" (Teinowitz 1996: 24). Using what is known as the System for Targeting Earned Media, QRS has worked with a small but growing number of business clients, including the Body Shop, Disney, and Polo Ralph Lauren, as well as LISA Engage, a coalition of businesses and agricultural interests that lobbies for free-trade legislation.

The convergence of politicalconsultants and marketing and corporate public relations is one of the most important trends to reshape advertising not only in the United States but also around the world. The techniques of marketing in politics are of interest to parties abroad, which in recent years have turned to the kinds of techniques innovated in the United States. In the 1997 U.K. general election, the Labour Party turned for assistance to Penn and Schoen's team and other American campaign strategists and politicalconsultants. Experts in polling, campaign strategy, and advertising from the United States have plied their skills to political candidates around the world, from the former Soviet Union and Eastern Europe to Israel, Mexico and Latin America, and Asia. In 1999, Democratic consultant James Carville played a part in the Israeli parliamentary elections. Pollster Stanley Greenberg and advertising specialist Robert Shrum worked closely with Labour Party candidate Ehud Barak, who was elected prime minister of Israel. In the weeks that followed, Israeli businesses, including a leading cellular telephone company, were reported to have approached Carville for strategic business and marketing advice, a seemingly irrefutable indication that the intermingling of political campaigning, advertising, and private-sector marketing is now an international phenomenon.