Advertising by the Federal Government: An Overview
Released: 2014-06-23T00:00:00

Background

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.

Unease with advertising can be magnified if the advertiser is the government, especially if an advertisement conflicts with widely held beliefs about government.

Many Americans believe that government was established to protect liberty, and that the essence of liberty is the freedom to think and live as one pleases (provided one does not harm others). Many individuals also believe that government should not needlessly or wantonly spend taxpayer money, and that citizens should be thrifty and self-reliant. In light of these beliefs, it is not surprising that controversies have arisen around government advertisements that

have attempted to dissuade individuals from using marijuana, have promoted the use of social service programs, are viewed as overly expensive or wasteful, or are perceived as possibly misleading.

However, not all government advertising is controversial. Few complain when the government advertises

federal agency job openings, competitions for federal contracts, or the sale of surplus government property.

These sorts of advertisements likely are viewed as part of government's duty to truthfully inform the public about its activities. As one of the Hoover Commission task forces wrote a half-century ago,

Apart from his responsibility as spokesman, the department head has another obligation in a democracy: to keep the public informed about the activities of his agency. How far to go and what media to use in this effort present touchy issues of personal and administrative integrity. But of the basic obligation [to inform the public] there can be little doubt.

Additionally, some government advertising has been mandated by law. For example, Congress established the National Youth Anti-Drug Media Campaign in a 1997 appropriations act ( P.L. 105-61 ; 111 Stat. 1272; 22 U.S.C. 1708). This statute directed the Office of National Drug Control Policy (ONDCP) to produce media campaigns to discourage illicit drug use.

And not all advertisements that tell people what to do are ill regarded. Few have criticized government advertising campaigns that have encouraged citizens to buy war bonds or avoid inadvertently setting forest fires.

Estimates of Government Advertising Expenditures

The Challenges

The federal government's expenditures on advertising are difficult to ascertain. There are at least two reasons for this: (1) there is no government-wide definition of what constitutes advertising and (2) there is no central authority to which agencies are required to report advertising-related expenditures.

Absent an agreed-upon definition of "advertising" or a government-wide reporting system for advertising expenses, agencies have had great discretion to budget their in-house advertising-related costs. The Government Accountability Office (GAO, then the General Accounting Office) brought this to congressional attention in 1977 after being asked to estimate government-wide advertising expenses:

There is no requirement that agencies identify advertising costs within their budgets. Also, budgeting of these costs varies by agency. For example, military recruiting advertising is budgeted under Operations and Maintenance for each of the military departments, and Energy Research and Development Administration recruiting is budgeted under Program Direction, Program Support. Energy Research and Development Administration public information is budgeted under … Program Support.

The challenges of defining advertising and, therefore, advertising expenses are significant. Hypothetical examples can be illustrative of the challenges.

An agency's "communications specialist" draws up a press release touting his or her agency's policy achievements of the past year, e-mails copies of it to newspaper editors around the country, and holds subsequent telephone interviews with reporters. An agency hires a private advertising firm to help it work with Ad Council to produce a public service announcement that discourages dangerous behaviors that inflict large costs on society and the government. The announcement is run on radio and television stations at no cost to the agency, and the agency's head delivers public speeches on the subject in 10 cities throughout the United States.

The questions these examples provoke include the following:

Do these activities constitute advertising? Or might any of these examples be more accurately characterized as public notification, media relations, or public education activities? How should an agency account for the government employee time and agency resources (in-house expenses) related to these activities? In accounting for costs, should an agency also tabulate any benefits (or return on investment) of the communications?

One Approach to Estimating Government Advertising Expenses

Despite these challenges, an estimate of the federal government's expenditures on contracts for advertising services can be derived from utilizing data from the Federal Procurement Data System (FPDS).

The FPDS has some significant limitations as a data source for agency advertising expenditures. The FPDS does not include expenditures by the legislative or judicial branches or the U.S. Postal Service. Moreover, the FPDS does not include any agency in-house expenses related to advertising. Finally, without agreement among agencies over what constitutes advertising, any contracting data drawn from FPDS must be viewed with considerable caution.

According to FPDS data, federal agencies spent $892.5 million on contracts for "advertising services" in FY2013. ( Figure 1 )

The five agencies that spent the most for advertising service contracts in FY2013 were

the Department of Defense: $419.0 million; the Department of Health and Human Services: $197.4 million; the Department of Education: $128.8 million; the Department of Veterans Affairs: $61.8 million; and the Department of Transportation: $43.0 million.

Restrictions on Government Advertising

Generally speaking, there are few government-wide restrictions on government advertising. Furthermore, no single agency is charged with tracking and overseeing the advertising expenditures of federal agencies.

Some restrictions on agencies' advertising expenditures may be found in annual appropriations acts, the U.S. Code , and the Code of Federal Regulations . For example, the Department of Defense has been prohibited from using appropriated funds to pay the costs of advertising by any defense contractor (10 U.S.C. 114 amendments); and 7 C.F.R. 12 contains guidelines for government advertisements promoting blueberries, honey, and mohair, among other agricultural products. For many decades, annual Treasury appropriations laws have contained prohibitions on the use of funds for the purpose of "publicity or propaganda purposes not authorized by the Congress."

A fuller statement of the limitations on government advertising may be found in GAO's Principles of Federal Appropriations Law, Volume I . Though not an independent source of legal authority, Principles does provide some guidance as to what may be viewed as improper and/or illegal agency use of appropriated funds for agency activities that might be construed as advertising. Principles begins with the 1919 federal anti-lobbying law (18 U.S.C. 1913) that prohibits agencies from using government funds to pay for advertisements that are designed to sway Members of Congress. Principles also describes the prohibitions against "publicity and propaganda" included in appropriations acts since 1949, the limitations on informational activities by agencies, and the prohibition of government use of "publicity experts." Principles notes,

Whether an agency's appropriations are available for advertising, like any other expenditure, depends on the agency's statutory authority. Whether to advertise and, if so, how far to go with it are determined by the precise terms of the agency's program authority in conjunction with the necessary expense doctrine and general restrictions on the use of public funds such as the various anti-lobbying statutes.

Under the "necessary expense doctrine," an agency may use a general appropriation to pay any expense that is (1) necessary or incidental to the achievement of the underlying objectives of the appropriation, (2) not prohibited by law, and (3) not otherwise provided for by statute or appropriation. "Thus," GAO explains, "the Navy could exercise its statutory authorization to promote safety and accident prevention by procuring book matches with safety slogans printed on the covers and distributing them without charge at naval installations."

The Department of Justice is responsible for prosecutions under the aforementioned 1919 anti-lobbying law. Otherwise, oversight, investigation, and enforcement of appropriate practices regarding government advertising falls to agencies' inspectors general, GAO, and Congress.

It is unclear how vigorously the limits on government advertising are being enforced. It does not appear that the Department of Justice has indicted anyone for lobbying with appropriated funds. GAO has issued comptroller general opinions that fault agency use of appropriated funds for advertising. However, GAO reviews of agency advertising result only after congressional request, and its opinions are advisory—they do not have the force of law. Primary oversight of government agency advertising has been exercised by Congress. In recent years, it has examined some large advertising campaigns, often when some Members of Congress have perceived the advertisements as being overly promotional of a policy or program.