PAPA JOHN'S BLASTS RIVAL PIZZA HUT'S AD IMAGERY: COMMERCIAL USES FOOTAGE FROM SMALLER CHAIN'S SPOT

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Papa John's is hopping mad over a commercial from rival Pizza Hut that uses footage from the smaller chain's advertising without permission.

"It is extraordinarily upsetting

. . . It is an infringement," said Syl Sosnowski, VP-marketing for Papa John's. He said the chain is exploring all options, including a lawsuit: "It's all in our attorneys' hands right now."

A Pizza Hut spokesman said the chain has not been contacted by Papa John's about pulling the spot, adding, "We will address that if it happens." But, the spokesman added, "Our legal department would never have let that ad out of the building if they had any concerns about it."

WAR ESCALATES

The commercial battle is just the latest in an ongoing war between Pizza Hut, which leads the $21 billion restaurant pizza category, and fourth-ranked but fast-growing Papa John's.

Pizza Hut filed a lawsuit in federal court in Dallas six months ago charging Papa John's with unfair competition and deceptive advertising. The suit, which has not been resolved, seeks $12.5 million in damages and legal fees. It followed complaints by Pizza Hut to the National Advertising Division of the Council of Better Business Bureaus. As a result of those complaints, Papa John's tweaked an ad about tomato sauce to settle the dispute.

Now, Pizza Hut is turning the tables, taking direct aim at its smaller rival in advertising. The new Pizza Hut commercial claims Papa John's doesn't use fresh dough for its pizza. The spot begins with shots of Papa John's delivery trucks and includes grainy footage of Papa John's founder-CEO John Schnatter declaring, "We never use dough made the same day."

The commercial broke Jan. 15 in Dallas and Atlanta, and has since been launched in St. Louis. It was created by an undisclosed regional agency, not Pizza Hut's national shop BBDO Worldwide, New York.

OUT OF CONTEXT

The footage of Mr. Schnatter was taken from a Papa John's spot that began airing last month, Mr. Sosnowski said, adding that the snippet was taken out of context by Pizza Hut. The Papa John's commercial shows Mr. Schnatter strolling in an orchard with his daughter as he tells her about making pizza.

"You'd never drink wine the day they crush the grapes or eat a green banana. And that's the secret to Papa John's traditional dough," he tells the girl. "We give the yeast several extra days to work its magic. We never use dough made the same day like some folks."

One advertising attorney said in his 30 years of practice he can't remember ever seeing a spot in which a marketer uses such footage from a rival's ad.

"I don't know if I've ever seen the use of a CEO of a competitor in one's advertising without their permission," said Leonard Orkin of Kay Collyer & Boose.

Papa John's, the fastest growing pizza chain in the slow-growing business, started the competitive ad battle in 1997 with an ad featuring Pizza Hut founder Frank Carney touting his new role as a Papa John's franchisee. The campaign, from Fricks/Firestone, Atlanta, is themed "Better ingredients. Better pizza."

Papa John's spent $15 million on measured media in the first nine months of 1998 compared to Pizza Hut's $95 million, according to Competitive Media Reporting.

`BULLYING THE SMALLER GUY'

Mr. Sosnowski said he believes Pizza Hut is using its new commercial in part to divert Papa John's attention and resources from its core business. "They don't care whether they will win or not. It is their way of bullying the smaller guy," he said.

Countered Pizza Hut's spokesman: "If you want to call it aggressive, that's your decision. We feel we have to take remedial action to set the record

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