Texas shop may win big in tobacco settlement

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Texas' $15.3 billion settlement with tobacco marketers is likely to send billings for a small Austin agency soaring--once state officials decide how the money will be spent.

Sherry Matthews Advertising & Public Relations, a shop with less than $20 million in annual billings, could stand to see a big infusion.

Matthews last year won the Texas State Department of Public Health's new $300,000 tobacco education program, and its contract makes clear the agency will buy time and create advertising for any state anti-smoking effort, according to a department spokesman.

$200 MIL PILOT PROGRAM

The settlement calls for tobacco companies to fund a $200 million, two-year anti-smoking pilot program to include law enforcement, education and advertising. But no breakdown on that spending has been determined.

Florida, which reached an $11.3 billion accord with a similar $200 million pilot program, is spending about a third of that funding on advertising.

The Texas accord requires tobacco marketers to remove their outdoor boards within four months and allows for the state to take over the boards.

Current creative from the Matthews agency for the existing tobacco education program warns underage youth that they can be fined $500 and lose their driver's licenses if they are found with cigarettes. It's expected that creative would be adapted for any expanded campaign.

DOWNPLAYING CHANCES

Ms. Matthews, a former GSD&M VP who formed her own agency in 1983, downplayed the likelihood that the shop will pick up an additional $60 million to $70 million in anti-tobacco business, noting that a number of decisions have to be made first.

She noted that because of low compensation on the business, it would be unlikely other agencies will compete.

Under Mattthews' tobacco ad contract, the state gets media at the agency's cost, without commission, and pays only for agency time at rates of $40 to $150 an hour.

Copyright January 1998, Crain Communications Inc.

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