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SUBJECT: Communi'c;ati'ons Task Force Conc1'usions and Recommendations TO: The Tobacco Institute Executive Committee .I Pursuant to your December 29 letter of'instruction, a Communications Evaluation Task Force was convened in February and' elected the undersignedi as chairman,. Siince February, the Task Farce has devised' a study plan, gathered documents, data and communications products„ evaluated data, met to consider the, assigned'task, prepared aidraft report, and reached conclusions and recommendations. The majority of the Task Force believes that sufficient analysis and evluation has been carried' out to reach valid' conclusions and recommendations. However, one Task Force member, Paul Gibson (Philip Morris): bellieves that additional analysis, evaluation and'critique of specific communication products such as The Tobacco Observer, brochures, pamphlets, TV tapes, etc.,, should be carried' out. Gibson also believes that the Task Force should spell out in detail the specific communication objectives and goals that should be undertaken by the Institute., (A suggestedilist of goals submittediby Gibson is attaehed as: Enclosure li). The m~3ar~Ey of the Task Fon~~e he~ the view that further analysis of specific products,qsas unncessary and would unduly delay progress whi'le providing little or no information bearing on fundamental conclusions or recommendations. With regard to the specification of a detai ed and specific listing of objectives, the majorit e that such a list ~__s-ineed ? ecessery, Eut sTiould be formulated over time wiE~hi~n the oversight of a newly constituted communications committee as improved communiications capabil'ity is developed within the Institute. Following are conclusions and' recommendations of the Task Force:. Conclusions • The Communications Problem -- The scope, difficuity:and complexity of issues facing the tobacco industry have,9 outstripped the communications capabili'ty of the Institutie,4 This in turn has led tor,isappoi'ntment and frustration on the part of'member c mpanies at the Institute"s perceived inability to arry out sustained 'x~l, ~ and'effective public,communication on behalf'of the industry, notwithstanding a high vel of financial' support ($10.04 million in 1983).

-2- • Adequacy of the Current Lonq-TermCommunications Plan.-- The present plan is so broadly stated that almost any, activity could be incorporated wilthin the plan and be fully justifi'ed., The plan lacks specificftyr and concreteness. For example,, one of the goaTs states„ . to support the Institute's overall mission by helpi'ngito achieve measurable favorable changes in popular attitudes through highly targeted communi~cations programs." Although laudable,, this goal is highly unrealistic. Popular attitudes regaxding tobacco issues are deep seated and quite unlikely to change in response to exposure> to mediated communications., Attitudes change at a glacial pace:over an extended period of time after exposure to many compelling messages which,are perceived as relevant to actual events (i.e., a sudden scien i ic breakthrough in the primary, health area)!. • Products -- The communications products of the Institute vary widely from very good to~nearly worthless. They also:vary in cost from quite modest to gold plated. Although the products reliate to issues facing the industry they have not been produced in support of specific proactive programs, but rather as resource material to beused by member compani~es. Use of the products by member companies varies by company and by specific product, but many of the pamphlets and'brochures are quilte effective and are widely usedlin answering consumer questions. • A Ouick Fix Versus Sustained Program Capability -- Oni the whole,, the Institute's communications effort can be characterized as reactive. Communications activity is generally driven by the actions of such organizations as GASP, ASH, Congressional committees, health organizations and the Surgeon General., Consideri'ngithe current size of the public relations division and how thin1y they are spread, this orientation is probably inevitable. • Staffing andlOrganization -- The public relations divifsion ofthe Institute is woefully understaffed and not we1D-organized considering the size of the task before it and the fact that the industry group is probably: starting a concerted communications effort 25 years late. Of 17people assignedlto the public relations division, 11 can.be considered communications professionals. Of the 11, eight or 72 percent are fuTly, committedto two effective program elements -- publications and the, speakers program., This leaves three people to carry out a broadly based and sustained program of public communications., Both the publications and speakers programs are currentl}r conductedlat the minimum essential! level., The speakers program should'probably be doubliedior perhaps even triplied., Without specifying a number, the professional staff needs to be substantially increased in size and reorganized along functional lines to enable it to carry out a much:more broadly based communications program.

-3- • Process and Procedlures -- A systematic approach~too process and proeedures of'institutional communications is lacking, wiithi.n the Institute. Communications goals are not arrived at through analysis nor are resources committed based upon the setting of priorities. Specific plans and' programs other than the broadl g,eneral plani referred to earlier do not exist. Job descriptions are vague and lacking in specificity. There is little evidence of systematic reporting of results, assessment of those results by senior staff and the relatilngiof those results to the issues faced. Since there is no systematic measurement of' results and' no assessment of' results against stated goals, there ils little that can be concluded concerning either the overall effectiveness or the focus of the current org.anization. A suggested, process is attached as Enclosure 2. • Clearance -- The present method for clearance a:ndireleasee of industry vi!ews on important matters is~cumbersome and slow. More often than not, i'ndUstry, viewpoints are so general and mild' by the time they survive member companies clearance that they are not very effective. They are also so late in being expressed that they miss the news cycle completely where the opposition''s view has already been strongly expressed. . Budget -- The current budget of the public relations divilsion is substantial (currently in excess of $10 millionY. Although the charter establishing the Task. Force speci'lfically excluded consideration of advertising, the fact that more than 70 percent of the current publi~c re'latfons budget i~s expended for advertising reflects a disproportionate alTocation of' current funds avaiLable.. If the Institute had an organization and staff of sufficient size to carry out fundamental broadly based cornmunicat'ions, the expenditure of $7 million plus forr advertising would not seem unusual, but considering inadequacies of current staffing and organization„ the advertising expenditure seems unusually high. . Communications Oyersiqht -- Present and past organization of the Institute's Communications Committee has been dominated both im,membershipiand orientation by marketing and sales personnel rather than professional communicators. This has narrowed the focus of this committee and'perhaps Limited its effectiveness in providing the kind' of counsel that might have resulted in a more broadly basedl, proactive communications program. Insteadlof advertising becoming an integral part of an overall communications effort, it currently iis the pred'ominant part of the communications effort i'n terms of budget allocatibn. ~ do;== ~ W C~1 S 0:1 ro I

r -4- • Information Resources -- The Institute currently has a highly sophisticated and presumably effective means for assembling, col1latilngi and1retrievring resource material concerning the issues faced' by the tobacco industry. This does not, however, extend to the i'nclusion, on a systematic!basils, of the results of scientific research underwritten by the Council for Tobacco Research. There i's little evidence that scientific data is being evaluated on alcontilnuing basis for possible use in, communications except for a yearly review by, the Institute''s scientific staff of CTR°'s annuali report. As a resuS't, scientific data that might be expiioited may be going unused. The Task Force acknowledges that this is a highly deli~cate subject area with legal implications and with implications of propriety from the standpoint of exploiting!scientific data in the popular press. But even the fact that the member companies have supported, research with funding in excess of' $100 million is not widely known. Recommendations 0 Begin at once to buildlthe strength, capabiliity of the public relations diivision. An experienced, senior ~, communications executive should be sought, one with a ~yrf' proven communications operations track record:, and with, he capability to build a staff,, design an organization ~a nd' carry out a highly sophisticated proactive program of N',~,~ ~~Y communications on behalf of the industry. This recommendation should not adversely reflect on the performance of any current staff'ers, all of' whom have given dedicated and faithful service to the Institute. This recommendationidoes not anticipate discharging people, but rather addling capability and redirecting effort . Reconstitute the Communications Comm4tteeAto include a predomiinance of broadly exper:iencedipublic communicators. Include on the Committee sufficient experienced advertisingi people to make up an advertising /// sub-committee to provide advice, counsel and'oversight over a vertising programs of the Institute. Charge the A~n~.!/.~ ,, ~,, I!A;v-- I.ummunicat1ons uommi!ttee witn oversignt or instiLuee, communications and to work with the new communications ~~C/ , head inideveloping proactive plans and programs. Charge ^/'/,1~~~ the Committee with carrying out a yearly objective ~~ analysis of communications programs effectiveness and with making a report of such evaluation directly to the Ihstitute"s,Executive Committee. 0 Utilizing either inside professional staff or outside counsel„ evaluate the effectiveness, use and' dissemination of all communications products to see which should be retained, update6, redesigned or disconti~nued.

-5- • Charge &reorganized and larger staff with developing a more formal and systematic approach to the task of communicating. (Similar to the process diescribed in Enclosure 2Y. • Charge the Communications Committee to devise and'define the latitude of communications authority of the Institute staff'and executive leadership,Spe1T out with some precision the types and' content of communications which require member company approvali prior to public re1'ease., Once formulated, this clearance procedure wou;ldlbe submitted to the Executive Committee for approval and implementation. • Reallocate current budget dollars to provide for a larger public relations staff and' increased operating fund!s for fundamental communications activi'ties. This might be accomplished by means of a freeze on some part of the, remaining advertising budqefi so that as staff and program fund requirements are added',, it can be accomplished without additional member company assessments. A suggested' figure of $3 million could prudentLy be reservedifor this purpose. • Improve liaison between the Tobacco institute scientiEilc and technical staff and the Council for Tobacco Research by formalizing contact on a periodic basis (:ii.e., once per month visits). Results of the more frequent contact shoui'd' then be shared with the public,relations division for evaTuationiand possible exploitation. ~=

Enclosure 1 GOALS FOR THE TOBACCO1INSTITUTE'S' COMMUNICATIONS PROGRAM 1. Design a communications program so: that the Tobacco Institute aggressively fills the role of industry spokesman andia'cts as a communications buffer between the Tobacco Institute's member companies and its eritiics, including the mediia. 2. Design and maintai'n a program for generati'ng and dissem- inatingiinformatiion to support the Tobacco Institute's poliitical objectiives. 3'., Create an ongoing communi~cati~ons campaign that aggressively contributes to the basic dialogue on smokingl and health and bu~ilds specific programs to challenge any and all signif'- icant anti-tobacco actions., 4. Create an ongoing information campaign to increase public awareness of the economilc contribution of tobacco to our society and the pleasures that the use of tobacco briingis. 5. Improve the credibility of the tobacco industry by generating and disseminating information based upon objective research and analy,sis. 6. BuilTd an ongoing communi'catiions.campaign to help mol'd' public opinion against unwarranted government intrusion. 7. Deve:Lop a communications program to generate good' will among alil those who have any economic stake in the tobacco industry. B. Develop an early warning system to identify issues that might affect tobacco usage. 9. Buiildl a continuing programito facili~tate the exchange of information on legislative andlregul'atory matters between the Tobacco:Institute and iits members., 10. Identify and appeaii to those basic attitudes held by the Tobacco Institute's varied pubLics which could affect their views:on the use of tobacco.,

Enclosure 2 A typi~cal communications process in effect in many organizations might be describe6as folLows:, • Research -- To determine the dimensions, scope and nature of existing attitudes, opinions and information level'. • Issues -- An analysis to set forth the i,ssues to be addressed. • Resources"-- A determination of the resources available to address the issues stated in terms of people, money,, networkingi„ etc. • Objectives -- Brief statements in concrete, measurable terms of the objectives to be achieved by means of the overall commun~icationseffort., • Plans and' Pro_grams -- Specification of the strategy and tactics to be followed' to reach stated' objectives andi programs of specific activities to be executed. • Staff Work lans -- Specific actions, products andi output o each pro essi'onal staff member required to: appropriately execute programs., • Results Measurement,,Reporting, and' Assessment -- Weekly and quarterly reports of productivity against plans and, programs are required'from each professional staffer,, collated andisummarized for senior management review and evaluation. By doing,this, productivity, in specific terms can be assessed, staff effectivene:ss measured,and overall program effectiveness determi~nedi. Periodic reporting also permits adjustment to meet unforeseen events and to take advantage-of targets of opportunity. • Evaluation -- Evaluation of the total program should be accomplished subjectively by internaL senior management and'objectively by:outsid'e independent professional communicators. An examplei of an outside objective evaluation,might be the oversight provided byan industries communications committee. ~ ~ Gs C~7 ~ C~t CD T