Commentary

Reason.org
September 15, 2006

Privatizing Ohio's Government Marketing...Just Do It!
Much of state's advertising and promotional work is corporate welfare
By Geoffrey Segal and Jack Furney

Marketing is a powerful tool used to promote a product, and in most instances proper marketing defines a products' success or failure. We've all heard the slogans, and when done effectively, consumers directly relate those marketing slogans to a particular product. When you hear, "Just Do It" you automatically think of Nike. And in the 1980's when you heard "Where's the beef?" you thought Wendy's (and probably still do so to this day). No question, marketing is a powerful tool…as well as a powerful and competitive private enterprise.

But the key word here is product. Private companies provide and sell products and government provides services. When's the last time you saw a government's successful marketing campaign? Nothing comes to mind?...you get the idea.

The marketing industry is a multi-billion dollar business that has thousands of companies nationwide. In Ohio countless marketing agencies co-exist.

So with a viable, solvent local and nationwide market, why does the State of Ohio conduct its own marketing campaigns? Simply, government shouldn't be in the "marketing" business. Now, some public awareness campaigns fall within the core functions of government. However, why would government agencies engage in their own marketing activities? Or worse, why would government pay for marketing efforts on behalf of private enterprise?

These efforts belong in the private marketplace—they should be paid for by the industries that benefit from the ads, not the taxpayers.

A further fundamental question is, "Why is government competing with a sound private sector market" that performs these functions as its sole core function and can undoubtedly "just do it" better, cheaper and faster?

Believe it or not, the State of Ohio not only has a Department of Commerce and a Department of Development, but it also conducts various marketing efforts within individual agencies. As detailed in the 2005 Ohio Piglet Book published by the Buckeye Institute and Citizens Against Government Waste, Ohio State spending to market or promote (i.e., subsidize) private sector businesses exceeds, at a minimum, $30 million.

Simply put, these pork dollars amount to nothing but corporate welfare.

The State of Ohio should re-empower the private sector to promote its own marketing activities. After all, it is in their best interests to do so.

Further, every state marketing dollar saved should be either redirected to private sector businesses that have paid into the marketing fund(s), through tax cuts, or into core government functions. The State of Ohio should be focused on its own solvency and core functions rather than subsidizing private sector businesses' marketing efforts.

Florida's tourism industry is second to none. However, in 1996 the State of Florida eliminated its own Department of Commerce, ironically under the direction of then Commerce Secretary and current Florida Governor Jeb Bush to re-empower the tourism industry to market their own products and initiatives. And Florida, as well as the tourism industry, has benefited exponentially. In 2000, Florida even privatized its "welcome centers" and as a result saved taxpayers more than $1.8 million. After more than 10 years since the abolishment of its own Department of Commerce, Florida's tourism industry has flourished and the state has remained as a top tourist destination to visitors worldwide. It's not just Florida either, other states are getting into the privatization game. Just last year, Ohio's neighbor, Indiana, privatized their commerce department. The new corporation has been billed as a more "nimble and effective" organization by Indiana Governor Mitch Daniels.

No one would or could argue that it is more important for Ohio to solve its own budget challenges and concentrate on its own core functions rather than serve as a clearinghouse for corporate welfare marketing. Maybe the state could afford some of those pork projects identified in the piglet book if they stopped handing out corporate welfare in the form of free marketing.

Geoffrey Segal is director of government reform at Reason Foundation and Jack Furney is a policy analyst at Reason Foundation. An archive of Segal's work is here and Furney's archive is here. Reason's government reform research and commentary is available here. This column was originally published by Buckeye Institute.