Ad restrictions said to be needed to save kids
WASHINGTON--Forget about Bob Dole. President Clinton is making Joe Camel his target for the 1996 election. The president last week gave the Food & Drug Administration the go-ahead to assert regulatory power over tobacco. The FDA in turn announced a stunning series of regulations, including severe limits on outdoor, magazine and point-of-purchase ads and event sponsorships.
And while pro-advertising forces worried that the proposal amounted to a ``de facto ban on all ads,'' FDA Commissioner David Kessler held out the possibility that the measures might not go far enough.
The president repeatedly told a White House news conference his concern was the nation's children. ``When Joe Camel tells young children that smoking is cool, when billboards tell adolescents that cigarettes may make them thin and glamorous, then our children need our wisdom, our guidance and our experience,'' the president said.
Advertising and tobacco groups quickly filed suit in U.S. District Court in Greensboro, N.C. The tobacco industry suit challenged the FDA's right to regulate tobacco. The ad industry suit took a similar tack and also said the plan violated the First Amendment.
``This lawsuit is not about youth smoking. The lawsuit is about whether, in defiance of 80 years of clear precedent, David Kessler and the FDA can regulate cigarettes,'' said Steve Parrish, Philip Morris Cos.' senior VP-corporate affairs, speaking for the major tobacco companies who jointly filed the suit.
Philip Morris Cos., which like R.J. Reynolds Tobacco Co. has pushed for better regulation of tobacco sellers, suggested there were inconsistencies in the proposed regulations. Senior VP-Corporate Affairs Ellen Merlo said the FDA is saying everyone who buys cigarettes has to be 18, but then limiting point of purchase merchandising to just b&w text advertising.
The Freedom to Advertise Coalition, comprised of the Association of National Advertisers, the American Association of Advertising Agencies, the American Advertising Federation, the Magazine Publishers of America, the Outdoor Advertising Association of America and the Point-of-Purchase Advertising Institute, filed a suit against the FDA and Dr. Kessler.
``He is contradicting what his own agencies have learned over the last year,'' said Hal Shoup, exec VP of the Four A's. ``It's not fair because it is not going to accomplish anything.''
ANA Exec VP Dan Jaffe warned that the proposal would open the door to regulation of many other industries. ``They have piled one unconstitutional provision on another, from outdoor advertising to tombstone to the 1,000-foot restriction,'' he said. ``We are going to have to argue each case and address the seven to eight multiple issues in the courts.''
``What is it about colors that get kids to smoke?'' he asked. ``Why is any picture, any illustration . . . It is so broad, so untargeted . . . this is crushing censorship behind trying to protect young people.''
The FDA and White House covered a broad base in the 250 pages of restrictions published in the Federal Register on Friday and open for comment for 90 days. For instance, there was not only a requirement for the tobacco industry to put up the cost of a $150 million anti-smoking ad campaign, but of a complete media plan. Health & Human Services Secretary Donna Shalala said an advertising executive worked with the FDA in preparing the regulations.
The regulations seem to clearly suggest that an anti-smoking campaign alone could significantly impact underage smoking and note results in several states that have paid to run ads even as the anti-smoking spots have generally disappeared from TV nationally.
Debate on just how much tobacco ads target and influence young people intensified late last week, when RJR noted the Federal Trade Commission conducted two separate investigations into such charges against tobacco marketers, and that several congressional committees have conducted investigations. No action resulted in any of those cases.
``It is clear that after a thorough review of company documents and company responses to direct questioning--that is the facts, not intuition--the FTC concluded that it had no basis to proceed,'' said RJR in a statement to Advertising Age.
There were some early indications that the FDA rules might not end up quite as hard and fast as they seemed. Publishers who could clearly demonstrate that a specific copy of a magazine was mailed to adult-only households might be able to drop in tobacco ads with imagery for those subscribers even if the publication's overall readership was greater than 15% youth.
At least one knowledgeable observer said the tobacco and advertising industry's attempts to wrest control away from the FDA may not be easy, because the FDA regulated tobacco not as a drug, but as a drug delivery system for nicotine.
``If you called it a drug, it would be a problem,'' said Alan Bennett, an experienced FDA lawyer with the Washington firm of Fox Bennett & Turner which has no tobacco or advertising clients. Mr. Bennett said claiming tobacco was a drug would force the FDA to assert tobacco companies were making effectiveness claims that might be difficult to prove.
``This is sort of clever. This provision [for a device] looks a lot more flexible. I don't think it's a slam dunk for the tobacco companies.''
The specific rules, however, may be much more fightable. Drug companies are generally reluctant to sue the FDA over advertising restrictions fearing reprisals, so the FDA's authority hasn't been much tested.
The potential financial impact on marketing is difficult to determine. While the FTC has reported more than $6.2 billion was spent on tobacco marketing in 1993 (the last year for which figures are available) much of that refers to slotting allowance or the value of coupons. Tobacco companies spent $443 million on measured advertising in 1994, according to Competitive Media Reporting, with $276 million spent on magazines and $121 million spent on outdoor.
In 1990 the FTC investigated whether Joe Camel and rivals advertising reached ``an audience whose numbers include a substantial number of people who cannot legally purchase cigarettes.'' The FTC took no action.
A second investigation begun in 1992 at the request of anti-smoking activists that looked just at Joe Camel ended in June 1994 with the FTC commissioners voting 3 to 2 against a complaint, saying ``the evidence ... is not there.''
Officials of advertising organizations and tobacco makers were critical of the FDA regulation, the First Amendment issues and some of the specific regulations.
Several charged that some of the issues the FDA and the President presented as fact--including that advertising's was purposely designed to influence children--had been examined extensively by the FTC, which found no evidence it was true.
Nat Walker, director of public issues for R.J. Reynolds Tobacco Co., noted the irony of the FDA taking action to prevent the company from using the Winston Cup in its racing sponsorship names when compared with Winston's share of legal age younger smokers.
``We've been doing this racing for 30 years. (If they were right) you'd think we'd have more than a 1.2% share,'' he said.
Whatever the final monetary impact, it won't be the first time a medium has had to learn to live without tobacco ads. The category represented about 7% of TV advertising in 1970; then, on Jan. 2, 1971, it was gone.
``It probably cost the TV networks a year of growth,'' said Jay Nelson, an analyst with Brown Bros., Harriman & Co., New York.
But it is unclear what the effect was on cigarette smoking--particularly among youths.
``There's a school of thought, that says that when the ads were pulled from TV, the cigarette companies actually came out ahead, because they also pulled their anti-smoking ads,'' said Mr. Nelson. ``Under the Fairness Doctrine, the tobacco companies had to run ads warning people about the dangers of smoking and some of those messages were very powerful. They said things like each cigarette smoked cuts eight minutes off your life.''
Whatever the cause, Mr. Nelson said cigarette sales volume actually increased slightly in the years following the ban.
Jane Hodges and Joe Mandese contributed to this story.
Copyright August 1995 Crain Communications Inc.