Tobacco Documents Online

to dissemination of a single warning statement or to a serie~ of rotational warnings. There is no reason to consider these suggestions since the Commission disposed of .the issue in the 1981 Consent Judgments. But when the staff's proposals are scrutinized, it is difficult to regard them as serious remedial solutions. If anything, the alternatives proposed seem to be predicated on the conclusion that only the most draconian plan would provide an acceptable billboard disclosure. i. The staff requirement that a percentage of billboards should be dedicated solely to the warning is unworkable. In order to assure a clear and conspicuous disclosure, the staff suggests that cigarette advertisers should dedicate a fixed number of billboards to advertising copy that consists solely of a health warning. Their recommendation implies a View that the demand for outdoor advertising space is relatively elastic due to the fact most alternative mass media are foreclosed to cigarette advertising. In fact, the implementation of the staff's proposal wpuld drastically increase the cost of outdoor adverhising and would effectively eliminate cigarette advertising in the outdoor medium. Advertisers select a particular medium for a variety of reasons. Although every mass medium has unique characteristics and limitations which influence that selection process, there are relatively few factors that differentiate the print-based media that remain available for cigarette advertising. Indeed, advertising copy used in different print media often is essentially the same The principle distinguishing factor is the number of opportunities a• -i0- Ti05390084

given billboard, newspaper, magazine or direct mail advertisement provides for exposure for a particular message. It is self-evident that cigarette advertisers will continue to use the outdoor medium only so long as comparative costs- of audience exposure remain within competitive bounds. But implementation of a requirement that a cigarette advertiser must dedicate as little as twenty five percent of contracted billboards solely to the dissemination of a warning disclosure would increase the cost of cigarette advertising on billboards beyond the point where the medium could be cost effective visa vis alternative media. The net.effect of this would be little more than to force a shift of cigarette advertising dollars from outdoor into alternative media where the desired • level, of exposures could be secured without any significant additional expenditures or inconvenience. Indeed, implementation of the requirement would, alone create such substantial regulatory disincentives for cigarette advertising in outdoor advertising that it would effectively eliminate this advertising from ~he medium. For advertiser.s confronted with the choice of whether to contract for 25% more billboards in order to publish a free-standing warning or instead to simply switch from outdoor to an alternative medium where they need not accommodate the warning separately, the choice seems clear. Either way, the regulation would prohiSit c~gare££e in the outdoor medium. -ii- T105390085

2. The staff proposal for a rotational warning system could not be accommodated within current operational constraints The impact of the staff's recommendations is even more extreme when their additional suggestion for the quarterly rotation of a series of different warning statements is considered. For example, in the case of painted bulletins, which carry. considerable cigarette advertising, we estimate compliance with the rotational proposal would increase costs by an additional fifty percent. Because of the labor-intensive characteristics of these painted units, they have a very low operating margin. The economics of these signs is based entirely on the efficiencies derived from the fact that they are extremely durable and can be posted in different locations over a protracted period, usually at least twelve months. The staff's rotation scheme would destroy these economies because it would require that each unit must be returned to the billboard paint studio quarterly in order to repaint the warning banner or, under one s~aff alternative, the entire s~gn. But cost considerations aside, we seriously queition whether the staff's rotation scheme could be accomplished at all because of the operational problem "that it would impose. At present, there is probably no outdoor advertising company in the U.S. with a physical plant of sufficient size to handle the increased level of work that would result from such a regulation. Outdoor advertising production capacity is generally planned and constructed in terms of the anticipated number of sign units that must be serviced. There is very little -12- TI05390086

flexibility fachored in because substantial regulatory constraints on the locations available for billboards keep the number of signs owned by outdooradvertising companies at a relatively constant level. Stated simply, there is no. room in most billboard plants to accommodate the greatly increased work load entailed by the staff's rotational scheme. Obviously, the cost of necessary of plant expansion could not realistically be allocated through the rates charged to cigarette advertisers. 3. The staff's recommendation to change the text of the warning and to adopt a new glyph format would undercut the effectiveness of the current warning language. The Staff Report focuses on theinterrelated questions of whether the text of the current warning should be revised and the length shortened for use on billboards. The Commission's Gui•delines Concerning Fuel Economy Advertising ForNew Automobiles, 16 CFR 259.2(a)(i)., provides significant precedent for ordering a truncated billboard disclosure. But the OAAA strongly believes that it would in fact be counterproductive to replace the current Surgeon General's warning with a new warning text in outdoor advertising. In order to be effettive, outdoor advertising copy must be gener~ in character, and should capitalize on preexisting symbolic impressions that. people already intuitively understand and recognize. The staff's suggestions are at cross-purposes with this basic fact. Substitution of the present text with a new warning, or series of warnings would severely undercut the Unique characteristics which make the current warning an effective outdoor advertising disclosure. Indeed it is the very familiarity of •the -13- T!05390087

current warning, so objectionable to the staff, which assure~ - its strength as outdoor advertising copy. The central fact, which even the s~aff feels compelled to acknowledge, is that the Surgeon General's warning is deeply inculcated in our culture. The warning has, in and of itself, become an impressionistic and intuitive symbol. It is ideal billboa~d copy because, in essence, it has become a glyph. At best, this is the most the staff could hope to achieve over a protracted period of time through adoption of its outlandish logo proposal. It may be difficult for the staff to accept, but the Commission's banner format incorporating the Surgeon General's warning already prov{des the effective outdoor disclosure that they find so elusive." CONCLUSION The OAAA respectfully urges the Commission to reject the recommendations of the Staff Report and terminate its "inquiry. -14- T!05390088