CIG AGREEMENT: R.I.PFOR MARLBORO MAN, OLD JOE

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The tobacco industry's historic $360 billion settlement agreement sets the stage for equally momentous changes in cigarette marketing.

The deal, announced Friday, still needs congressional approval. Congress is not expected to consider it before September.

If the agreement wins approval, Joe Camel and the Marlboro Man will be gone, along with any number of advertising practices that have been the backbone of marketing efforts in the 1990s.

The Winston Cup, Marlboro Miles and giveaways of lighters, T-shirts, hats and other merchandise with brand logos are all banned under the agreement, aimed broadly at resolving class-action liability suits against the tobacco companies.

POP SEVERELY LIMITED

Point-of-purchase materials would be severely limited, with self-service displays of cigarette packages gone and signage restricted to b&w text. Direct marketing materials would be limited to text.

Outdoor advertising would be gone entirely, and Internet marketing would be banned.

Essentially, the deal calls for tobacco companies-including Philip Morris Cos., R.J. Reynolds Tobacco Co., B.A.T and Lorillard Co.-to accept all restrictions proposed by the Food & Drug Administration and some major additional limits. The deal would give FDA oversight, contrary to the decision in a recent tobacco industry lawsuit. The loss to the POP industry alone would top $700 million. Tobacco marketers spend even more than that to distribute catalogs full of branded merchandise.

Magazine advertising would be restricted in titles that reach more than 2 million underage readers or have a youth readership of 15% or higher. Tobacco marketers could run b&w ads in such publications, but are expected to cut titles like Sports Illustrated from their media buys unless the magazines develop adults-only editions.

A SILVER LINING

Although media would lose big money as a result of the changes, there could be one silver lining. The final deal announced Friday calls for the tobacco industry to fund a $500 million annual "counter-marketing" campaign and have no role in its creation or media scheduling.

The campaign would be administered by a national board that could hire an ad agency or contract with states to do their own advertising. Most of the advertising is expected to be on TV, and attorneys general, in announcing the agreement, pointed to hard-hitting anti-tobacco campaigns in Massachusetts and California as models for the effort.

A MAJOR VICTORY

Attorneys general and lawyers suing tobacco companies called the deal a major victory.

"This is the most historic public health achievement in history," said Mississippi Attorney General Michael Moore.

While some health groups concurred, other consumer groups promised to fight the agreement.

"This is a premature rush to judgment," said Ralph Nader of the Center for the Study of Responsive Law. "This is a deal dead on arrival in Congress."

He cited congressional concerns that the deal would give FDA new powers, as well as concerns from some liberal groups that the settlement doesn't go far enough.

Advertising groups had a mixed reaction. While the deal removes a thorn in the side of advertising, executives warned it poses some major threats to other industries.

In an obvious slap at the ad industry's successful federal court challenge of new FDA regulations on tobacco, several sources said the final agreement negotiated by the states would make it impossible for the industry to challenge just the ad restrictions.

Ad groups could challenge the whole tobacco deal and risk a public outcry or not challenge anything, they said.

"A constitutional challenge [on advertising] brings down the whole package,"

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