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CUNN NGHAM & WALSH 875 NOITFH MJCHIG~N A~ :NUE CH C~GO, L 63611 ,~2) 9a3 949: .;~ ,, January 8. 1982 Mr. Mark Schofleld BRBW~I & WILLIAMSDN TOBACCO C[}gPORATIOH Re'- RALEIGH in Feature F~lms ~'L., RALE:GH advertising featured in genera] fica] lyl We reCOrll~l~nd sgerlding a ~IdXilru~ Be featured in at least g films. : I BACKGROUND AI Ci~rette~ a~ Props Dear Mark: We have an outstanding opportunity to have RALEIGH cigarettes or release movies. Spool- of $20M over a year to Recentl~ there have been a number of hlgh-visibillty feature fi~ms in which ~re or more oF ~qe cenLr~1 Ch~racte~ smoke a 3a~CU]B~ brand Of Cigarettes, This ~as peon happenin9 be:ause ciDare~e manufacturers nave been P~Y~9 ~or t~e exposure. Followi~ ~re ~olile notBble examples: "i' Movie ActoHCharacter Brand Continental Divide" ~eba Belushi Marlboro "Superman II" Margot Kidder Marlboro "Pennies From Reaven Steve ~a~tin Camel "Pr~nce ~f th~ City" Treat Nilliams Merit ~r & key supporting Mar1~oro p]ayer~ . I'Abscence of Malice" S~II~ :ields CarleLo~ Particiuation " nuvfes I$ not limited merely to a~tors smoklng a particular brand. :or example, "Superma~ I]" also included a classic fight scene im vbich ~u~e~man dnd ~ne bad ~U~S ~hr~ ~ M~rlboro ~rucK bdck and F~rLY C:~ at each ~tner on Lexington Avenue. This truck ~as pro- ~-~ duced sele~ £or the m~vie and e~isEs mo~bere else, P~ There are ot~er i~stances of ~igarette advertising ~ervlng as part of tb~ ~eenery [c,f. t~Nei~hbor~", "Pennies From H~aven"). ~ '"

Mr. Mark Schofield January B, 1982 Page Z B. 2. Not only cigarettes use movies for the message. Copperbone~ Bud~eis~r~ Coors~ Apple gomputers~ Kawasaki, United Airlines and American Airlines are a few other sponsors who have recently bought into films. Some Movie Facts I. The lead time between seeking product placement in a film a~d finally appearing ol s~re~i1 is quite l~ng - 12-18 mo~ths. From a g~ decision it takes 3-6 mont~s tc secure an appropriate placement situation. From there, it takes an addlbior~al 9-12 months to shoot, edit, print and release th~ film. 2. A typical movi~ h~s a life cycle of 2-2½ yea~s do- mestically. It is released first to tFe~tres, next to cable TV and finally to commercial IV. During its life cycle and through ~his distribution sequence, the typical film will cenerate lO0 million (I) impressions. 31ockbusters are o~ course higher, far insL~nce, "Smukey arld lIl~ BmndiL" has uver 250 millio~ viewer impressions and i~ still being re-run on conmercial TV. If. RECOMMENDATION The Ag@ney recommends spendin] $2OM over a year to employ Unique Product Placement (UPP) to have RALEIGH cig~rett~s/~dvertisin9 appear in at least g films. &. Upon our c~ntracting UniqJe Produce Placement, it will begi~ canvassing film producers to~ard uncovering properties which are felt to fit our demogr~phfo guidelines (e.g., n~ ch~]d- ren's movies, no ~men-oriented movies}, gu~in~ this can- vassing, UPP ~i]l determine ~hich films are open to cigarette placement. We will then receive a ~r'ecis ~ith credits for emch film opportunity. It is then our go/no-go decision depending ~n ou~ ~eeling toward the film's expected psycho- graphic a~geal and imag~. 3. It is f~n~ionaily inoperative to ask UPP ~o search ~or truck~ and/or eoantry and western and/or "good*ale-boy" movies. There are s~mpiy not that many of them made and even among thes~ our opportunities are limited. C~ F~ ~n F~ Gm

Mr. Mark $chofield January 8, l~BZ Page 3 b. We will have mo control over how the cigarettes and/or advertising Daterial$ are used other than to require proper usage and no disparagement. Once we havP com- mitted to a specific Film we have absolutely no editorial control. We will cut a deal with UPP whereby they will Begin to be paid only after it has delivered the firs~ film or at least demostratee ~uhstantial positive activity. Ne will pay them $5.000 at the end oF month 3 unless we are dissatisfied with their efforts, in which case we ~ill cancel at no Cost. This procedure ~ill recur every third month. We corsider placement in 9 films during the first twelve morBh$ to be a reasonable expectation; uPg ~oncur~. A~ noted earlier, it will take 3-4 m3nth~ to ~evelop the first placement. After tbi~ however~ subsequent placements wil! not take ~early as lo~g Since there will be ~ome familiarity between us and the film produce rs. Ill. RATIONALE A. Dy eppear~ng in movies, RALEIGH will be receiving mn implied third party emdorsemeat. In the movie context this endorse- ment is considered very impactful since unlike the passive exposure of advertising and PR, the movie exposure require~ a ~ro-active role for the viewer (i.e., the viewer musz~ to the theatre and aJZa3{to watch the films). B. Although the placement may not be consistent with RALEIGH's Image, th~ plac~m~nt~ will almost ~ertainly be consistent w~th some psycho frcmcwork into which the viewer wants to project. Tile Brand can BEcome identified with something or someone that is desirable to a specific viewer set. C. RALZIGH has the opportunl~y to compete head on with Camel and Marlboro in this unusual media opportunity before being pre- empted. Currently, as muted earlier, the~e are a number of cigarette brands involved in film placement. Based on con- versations with product placers, it appears the frequency of cigarezte placement is rapidly growing and potential properties are becoming increasiagly dlfficult to locate. If the Brand does not act soon, this particular area of unusual media may become urbJyable. F~ Ol F~ C~

Mr. Mark Schofield January g, 1982 Page 4 E. E. G, H. The risk to the Brand is quite low - a top of ~20~ annually. 7~rthermore, if we are not satisfied after the fir$~ three mDntbs, We have nDt spen~ ~ny ~oney at all. There is al~ays the possibility that the Brand may become a key element in a blockbuster movie (c.f. Marlboro in "Superman if"). The cost efficiency is incredibly low. Ii we spend $20M to appear in 9 movie~ each with viewer~hip of 1OOM~ our cost-per-thousand is 2.2¢~ Assume that our placements are in movies that bomb, that in~tead of log~ per film, ours generate only 5MM vCewers each, 1/20 the norm. [yen for this disasterous c~se~ RALEIGH CFM ~ould be 44.4¢. This is ~till roughly half of 3C-~Feat and 1/18 of IP4/C. There is n~ way to measure the impact of a filo placement versus standard unit~ in corv~ntiona] media; the placement form will be different for each inzid~nt~ Based on this writer's observa- tions, the plac~m~nt~ would cover a r~alm ~anging from small space ROb tD gO-second prima-time TV. While not corsdiered ovem~helming powerful in regard to Impact a~d recall, the overall effect of a program nf fil~ plazem~nt can only ~e to add to the impact and ad reca~] g~rated by the Branc's base marketing p~an. Given fi]m'~ distr!bution system, the gra~d would be virtually g~ranteed electronic exposure 2½-3 years after commitment. Product placement firms oth~r than gPP have been reviewed, however, ma~y have gubiou~ roputations and some of th~ re~i~Ider ~Ir~dy h~ndl~ ~IgB~e~es. UPP has ~ fln~ reputation, a solid track record and they are available. Attached a~ a gPP fact sEeot~ let~or~ of praise f~Gm p~udu~ers and clieriLs, and sb~lIs from v~rlou~ films they h~ve been involved ~ith. It i~ a complete, impressive package. (continued) C~

Mr. Mark Schofield Ja~aur~ 8, 1982 Page 5 IV. NEXT STEPS ~eBsfl advise b~ as snort as you cam wh~th~r we c~n proceed. Time is tight since UPP has be~n cpproached by "another clgBrezze company' (we believe it to be Amerlcan), but they bavQ agreed to wait a reasonable tire t( ~eBr back From us. We ncpe to have a decision by January 22. Please call if you have any questiors. Cordially, Don~i~ O'D~m~ell encl /nrl CC: K. Dally ~, Dearth E. H&nnuII S. Hatcher u Mayors R. ~arker Pittmzn FL Vail