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598 STATEMENT OF JOHN E. O'TOOLE, CHAIRM_a`;, FOOTE, CONE 5 BELDING COALMNAICATIONS, INC. Mr. Chairman, members of the subcommittee. Thank you for allowing me to appear today in this consideration of H.R. 5653. `My name is John E. O'Toole. I am chairman of the board of Foote, Cone Fi Belding Communications, Inc., the fourth largest U.S. advertising agency -- ninth largest worldwide -- with 34 offices in 19 countries. Our New York office works on special product assignments for Lorillard and one of our Chicago accounts is Brown F, Williamson International Tobacco. Foote, Cone 6 Belding is the successor agency to Lord & Thomas, one of the oldest U.S. advertising agencies, which for many, many years from the turn of the century worked with the American Tobacco Company. Before I address the proposed legislation, it would seem appropriate to discuss for a moment the theory and purpose of advertising. Eighty years ago the generally accepted definition, was "keeping your name before the public." In 1904, a bright young employee of Lord B Thomas, Albert Lasker, and a former Royal Canadian Mounted Policeman named John F. Kennedy who became a Lord 6 Thomas copywriter, redefined the mission of advertising in a way that was to affect our industry and indeed all of those industries offering the public goods and services from that day to this. -4 Advertising, as Lasker ar : print." This realization c completely. It added the conc the salesman, thus producing z advertising industry a potent taught businessmen throughout their products and stimulate t and nations. : Advertising, then, is sal paid space and time of mass me with which a salesman must be sale. In the old days it migt a new type of praduct, as Albe ^ew blended cigarette. Today, ?ersuades.the smoker to try arn of what our research tells us low tar, perhaps, or flavor, o If I, as a smoker, try a b=and, because a magazine ad h and fuller in flavor than thos a second, third or fourth -= my old one. Through advert ~ try a product.

< office works on special a of our Chicago accounts :co. Foote, Cone 8 Belding , one of the oldest U.S. ny years from the turn of acco Company. , lation, it would seem theory and purpose of ally accepted definition, 1. In 1904, a bright Lasker, and a former ?ohn F. Kennedy who _ined the mission of our industry and indeed )lic goods and services 599 -2- Advertising, as Lasker and Kennedy defined it, is "salesmanship _n print." This realization changed the course of advertising completely. It added the concept of persuasion, the prime role of the salesman, thus producing a creative explosion that made the advertising industry a potent force in the American econom.• and taught businessmen throughout the world how advertising could move their products and stimulate the economies of their own cities and nations. Advertising, then, is salesmanship, functioning in the paid space and time of mass media. It is based on the information with which a salesman must be equipped to make a person-to-person sale. In the old days it might have persuaded a consumer to buy . a new type of prodnct, as Albert Lasker did with American Tobacco's new blended cigarette. Today, however, cigarette advertising persuades.the smoker to try another brand. It does so on the basis of what our research tells us smokers are seeking in a cigarette -- low tar, perhaps, or flavor, or the right balance of each. If I, as a smoker, try a pack of cigarettes not usually my brand, because a magazine ad has persuaded me that it is richer and fuller in flavor than those I now smoke, I do not have to buy a second, third or fourth pack if I find the product not up to my old one. Through advertising I make an informed choice to try a product.

600 -3- It has been said that the new rotating labels proposed by H.R. 5653 will enable the smoker to make a more informed choice. And here we come to the crux of my testimony here today. Say that it is decided that a brand of cigarettes selected to carry what I will call the pregnancy warning is my brand. Say that among the brands that must under the system to be created by the Federal Trade Commission carry for the first year what I shall call the heart disease warning is the favorite of my next-door neighbor and friend. Now I am not of a mind to bear a child. Much as my wife and I love our two daughters, we do not really care to add another child to our family now. And my neighbor, who has the lowest blood pressure on the block, knows of no one in his family for generations back with any hint of heart'disease. Sf I rea3 on my pack everty time I reach for a cigarette that smoking and pregnancy don't mix -- if my neighbor makes mental note that the Congress has mandated the heart warning every time he picks up his pack -- are we being informed of anything that is pertinent to us as smokers? Aren't we and millions of smokers to whom the warnings on their favorite brands have little or no relevance in effect being misled? If, conversely, I am worried about heart disease because I know of a family tendency toward coronary occlusion, need I shop for the brand whose advertising does not mention diseases of the heart? Should the woman, who is especially conscious of cancer because her mother, or best friend, or a person with whom she works have all had cancer, search for a brand that speaks only of heart disease? When the Congress decid labelled as potentially dang then appeared in advertising legislation states, that "th that cigarette smoking may b( accounts, except the FTC's, t has been effective in spreadf in effect, deceptive advertis smoker that he is in danger c spontaneous abortion by smoki This is a gamble that I do no FTC, which has for several ye: warnings, should take. As an advertising man of too, about another gamble invc advertising copy themes, illus into public print or on the ai without the principals being c all its connotations will be r advertiser intended it. The t. here a week ago has revealed t' on the effect of the various wz

ng labels proposed by a more informed choice. ony here today. Say ttes selected to carry my brand. Say that em to be created by the rst year what I shall orite of my next-door ind to bear a child. ers, we do not really ow. And my neighbor, block, knows of no one .ny hint of heart disease. for a cigarette that neighbor makes mental .eart warning every time rmed of anything that and millions of smokers -ands have little or , conversely, I am )w of a family tendency )r the brand whose the heart? Should the icer because her mother, ! works have all had ily of heart disease? 601 A'hen the Congress decided in 1965 that cigarettes should be labelled as potentially dangerous -- and when the warning label then appeared in advertising in 19'2 -- it was, as the 1965 legislation states, that "the public may be adequately informed that cigarette smoking may be hazardous to health." From all accounts, except the FTC's, the label on packs and in advertising has been effective in spreading that word. Would it not be, in effect, deceptive advertising now implicitly to tell the smoker that he is in danger of heart disease or she chances a spontaneous abortion by smoking specific brands of cigarettes? This is a gamble that I do not think the Congress, or indeed the FTC, which has for several years advocated rotating explicit warnings, should take. As an advertising man of 30 years' experience, I am worried, too, about another gamble involved in this bill. Very few advertising copy themes, illustrations or headlines nowadays get into public print or on the air without adequate research, without the principals being convinced that the message and all its connotations will be received in the manner in which the advertiser intended it. The testimony and o,uestioning of witnesses here a week ago has revealed that there has been no research on the effect of the various warnings proposed in H.R. 5653.

602 Testimony before the full Commerce Conm'_ttee in 1965 fron psychology and marketing experts on the or'g`na'1y proposed warning label warned of the dangers of overstatement. One witness, the chairman of the department of marketing at Nctre Dame, told the committee that to overstate the dangers of smoking could lead to an undermining of the effectiveness of warnings in use in connection with other products. "We all know the story of the boy who cried wolf," he said. "If warnings on cigarette packages portrayed smoking as a more serious or immediate danger than our experience confirms, we would soon come to attach little significance to.the warnings." _ A licensed psychologist and associate dean of the graduate school of business administration at Michigan State University went even further in his caution to theScommittee. Referring to the FTC's proposed warning requirement then in 1965, with its reference to "death from cancer and other diseases," he said, "in my judgment, a warning expressed in such language would, by virtue of its distastefulness and intended shock effect, precip- itate a far greater backlash than a quieter, more restrained warning statement." His fear was echoed in 1977 by psychologist Daniel Horn, the longtime head of the government's anti-smoking bureau, the National Clearinghouse for Smoking and Health, and a pioneer in e_'ccat'_on aga ~%ea:th warnir s:re^gth in t s:rong it bec :^e health wa I should : wrote last ,oo,c in whick a: ty means c ,c.::d like tc A~vertising I c-sumer Inf ::cn" is what '':ese staffer 1.^ .: e: "The Tas V:th a univer .•..'ormation. -o be a valua s`own that ai --t not use . .=Droving the =r relevant _ ='ange behavi ... 0'7 0-82--

-3 Committee in 1965 .roc -3 origir.a'_1y proposec overstatement. One t of marketing at Notre tate the dangers of smoking fectiveness of warnings In "We all know the story of ' warnings on cigarette 3erious or immediate danger i soon come to attach aate dean of the graduate Kichigan State University he committee. Referring to t then in 1965, with its ther diseases," he said, "In uch language would, by ended shock effect, precip- ;uieter, more restrained )sychologist Daniel Horn, the ~i-smoking bureau, the nd Health, and a pioneer in 603 education against smoking. Dr. Horn said, "I was always for the health warning [but] I was always concerned really about tne leve_ of strength in the health warning', part'_y because `_f a warning is toc strong it becomes counterproductive." He added that he did not see the health warning as "an important source of education." I should like to conclude with some comments from a book I wrote last year called "The Trouble With P.dvertising...," a book in which I presented an affirmation of advertising arrived at by means of a critical view from the inside. The portion I would like to tell you about is from a chapter entitled "What Advertising Isn't," in which I noted a 1979 FTC staff report, "Consumer Information Remedies." What Dr. Horn would call "educa- tion" is what the commission staff writers call "consumer information." These staffers, in discussing }iow to evaluate consumer information, wrote: "The Task Force members struggled long and hard to come up with a universally satisfactory definition of the value of consumer information. Should the commission consider a mandatory disclosure to be a valuable piece of information, for instance, if it were later shown that although the consumers understood the information, they did not use it when making purchasing decisions? Is there a value in improving the oualitv of market decisions through the provision of relevant information, or is it necessary for the information to change behavior to have value?" 95-077 0-82-39

604 I wrote that "the ensuing 'remedies' make it clear that the staff really judges the value of mandatory disclaimer by the degree to which it changes consumer behavior in the direction they are seeking." I pointed out that I'm a consumer and I resent government officials wondering what to do with me next if I understand but choose to ignore a disclaimer they've forced an advertiser to put in his ad? It's my God-given right to ignore any information any salesman presents me with -- and an ad, remember is a salesman. What's this about changing behavior? "Well, mine," I wrote, "is going to change if the employees of a government I'm paying for are talking like that out loud. It's going to get violent," I wrote. These FTC persons -- indeed, with all due respect, Mr. Chairman, perhaps even you and the members of the subcommittee --'do not understand the nature of advertising, just as the professional critics of advertising, the journalists, consumerists, academicians, don't understand that advertising is not journalism or education and cannot be judged on the basis of objectivity and exhaustive, in-depth treatment. Thorough knowledge of a subject cannot be derived from an advertisement but only from a synthesis of all relevant sources: the opinions of others, reports in newspapers, magazines and, increasingly, television - -n the case of cigarette a he may seek in terms of ta t^at it is not just the wa: nas gotten across the mess< -n 1965 and then in 1969. Society, the American Lung ciation in spreading abroac Mr. Chairman, members your time and patience. I tc vote upon H.R. 5653 that derived from an advertiseme public is already thoroughl health. Listing specific c :o overkill and discriminat u7ich, in the roulette syst Ccm:.ission, may be forced t relevant to most smokers.

04 -iedies' make it clear that the andatory disclaimer by the degree :or in the direction they are uier and I resent government :1 me next if I understand but 've forced an advertiser to put : to ignore any information any a ad, remember is a salesman. r? "Well, mine," I wrote, es of a government I'm paying . It's going to get violent," with all due respect, Mr. Chairman, f the subcommittee -- do not ng, just as the professional lists, consumerists, academicians, is not journalism or education and bjectivity and exhaustive, ct cannot be derived from an hesis of all relevant sources: newspapers, magazines and, 605 increasingly, television -- even the advertising of competitors, which in the case of cigarette advertising gives the smoker the information he may seek in terms of tar and nicotine levels. I might add, too, that it is not just the warning on the pack and in advertising that has gotten across the message that the Congress decided upon, first in 1965 and then in 1969. iIt is the efforts of the American Cancer Society, the American Lung Association and the American Heart bsso- ciation in spreading abroad the purported dangers of smoking. Mr. Chairman, members of the subcommittee, I thank you for your time and patience. I hope you will remember when it comes time to vote upon H.R. 5653 that thorough knowledge of'a subject cannot be derived from an advertisement and that by all reports, the American public is already thoroughly aware that smoking may be dangerous to health. Listing specific dangers of individual brands can only lead to overkill and discriminate against manufacturers of those brands which, in the roulette system to be devised by the Federal Trade Commission, may be forced to bear the label most explicit -- and most relevant to most smokers. 0