Tobacco Documents Online

(gst ye?r, said a Carter Hawley Hale sp ~kesman. Its four specialty- store chains generate only about 2596 of Carter's revenues, but are respon.o' le fo- almost halt its oper- ating pt. ats. Boutiques are matching dis- counts offered by their larger counterparts and hyping services unavailable through major retail- Dancer, Dorland ~ deal 6ff? By STEWART ALTER Acquisition negotiations be- tween Saatchi & Saatchi Co.'s Dor- land group of agencies and Dancer Fitzgerald Sample appear to have broken down. The break-off in negotiations would be the second recent setback to Saatchi's ambitious agency-ac- quisition plans. Following a week Ted Bates, Michael Becker go separat• ways. Page 2. of intense negotiations this month, Ted Bates Worldwide rejected an offer from Saatchi to buy the giant Bates agency network for a price reported to be $400 mlllion-to-$500 million. The DFS-Dorland talks began a few months ago (AA, Sept. 23) and seemed likely to lead to a deal, con- (Continued on Page 70) with "special tissue paper, bags and boxes." And it's tying in its 012 children's stores with a pre- Christmas screening of Walt Dis- ney's "101 Dalmatians" in New York. • Banana Republic, a subsidiary of The Gap, San Bruno, CaL, which sells safari-look clothing, is offer- ing discounts for buying more than Monday, December 16, 1985 tisi Crain's Intemational Newspaper of Marketing ng Japanese will face powerful new competitor GE, RCA build electro By BRIAN MORAN General Electric Co.'s planned acquisition of RCA Corp. will create a consumer electronics marketing powerhouse equipped to accelerate the battle against mounting foreign competition. The merger will combine two companies that last year had total worldwide sales of $38 billion ($28 billion from GE and $10 billion from RCA). The $6.28 billion deal would be the largest non- oil merger ever. The merged GE-RCA would jump immedi- ately, into the ranks of the nation's 15 leading advertisers, with a combined budget of $441 million ($239 million from RCA and $202 mil- paying off. Benetton said Christmas, 1985, sales are 25% ahead of last year. Lou Lattimore, a Dallas-based men's clothing store that pits itself against Neiman- (Continued on Page 71) Benetton is one of several bou- tique chains cutting into depart- ment store sales this Christmas. lion from GE). RCA and GE ranked 33rd and 37th, respectively, among 1984's largest national advertisers, according to ADVERTISING AGE'S list of "100 Leading National Advertisers" (AA, Sept. 26). What may be the biggest jewel in the mega- merger is GE's acquisition of the NBC television and radio networks and stations, said to be worth $2.8 billion on their own. GE joins Capital Cities Communications, which earlier this year acquired the ABC networks and stations, in an historic ownership shuffle among the Big Three networks. CBS Inc. fended off a takeover at- tempt by Ted Turner, but Laurence Tisch, chairman of Loew's Corp., now owns 25% of the AMA toba~c~ ad bill readied By STEVEN W. COLFORD WASHINGTON-The first legisla- tive effort to back the American Medical Assn.'s proposed ban on tobacco advertising may appear in Congress as early as this week. Sen. Bill Bradley (D., N.J.), often mentioned as a potential presiden- tial candidate for 1988, is working on a bill to impose some type of constraint on tobacco advertising, a staff aide said. Sen. Bradley has not decided •whether to seek a total ban or merely try to eliminate "image" advertising for tobacco products, the aide said. The AMA, which last week rec- ommended a full ban on tobacco advertising, said it was being courted by many lawmakers who wish to sponsor an AMA-supported bill on the issue. Rep. Tony Coelho (D., Cal.), however, told the three major ad associations last week that he fore- sees no congressibnal action until 1987 at the earliest, even though ad-ban legislation might be intro- duced soon and be followed, per- haps next spring, by hearings. Efforts to snuff out tobacco ads pit the AMA's formidable lobbying power against that of advertising, to- bacco, media and civil liberties groups. AMA contends it wants to "educate" the public about the harms of tobacco use and that positive com- munications about the products must cease if it's to succeed. The First Amendment, which (Continued on Page 68) -- - Last Minute News HHCC wins with 7-Eleven DALLAS-Southland Corp. has named Hill, Holliday, Connors, Cosmo- pulos, New York, to handle creative for its 7-Eleven stores. Young & Rubicam previously handled. The assignment follows an extensive re- view that began with more than 70 agencies and ended with two finalists including W.B. Doner & Co., Detroit. The budget is estimated to be in the $2 million range. Camelot Communications continues to handle spot tv buys; Southland handles 7-Eleven radio and print~uys in-house. Falcone takes DDB helm in New York NEw YonK-Doyle Dane Bernbach's office here, in a top-level shift of management, has promoted Peter Falcone to president from vice-chair- (Continued on Page 8) compar W hil will res ident 'v - said it 1Tinker' questic statiom those s tions, ~, 72.) GE= combin sumer Drug = fill in fo An Advertising Age round Nrw Yoax-Should me, companies have to kick th cigaret ad habit, help may co in the form of a prescription. Pfizer Inc. is searching fo consumer agency to handle vertising, targeted directly consumers in mass media, several of its prescription dri The brands include Procardi drug to treat angina pecto Feldene, an antiarthritic, = Minipress, an antihypertensi Such a move raises the p. pect that the $20 billion r scription-drug industry may come a major new source oa business. Pfizer's search for a sho; handle an initial $15 millio, print_ and .later. nossibly, i TIMN 01356117

,~.. ~ iinesa,= ,ean a thin°s es go M1but it short co are s shel- dium 3 ban, of the (inne- ~ wnqn .loe i neismann oroKe nis ieg in a Nov. i a game against me New York Giants, Health & Tennis Corp. of America was forced to scramble to rework a print ad featuring the Washington Redskins' quarterback. Los Angeles-based HTCA already had shipped the ad to Sports lllus- trF, . d Mr insertion in its Super Bowl-week issue. HTCA's agency, J. Wai.ar Thompson USA, was given four days to rewrite the copy that now focuses on Mr. Theismann's resiliency rather than his durability. AMA it for (Continued from Page 1) while guarantees freedom of speech, is 6. The the primary shield cited by the ansit- American Advertising Federation, such American Assn. of Advertising v sta- Agencies and Assn. of National h are Advertisers. Other groups on the ads at pro-advertising side are the er ad- American Civil Liberties Union, American Newspaper Publishers ready Assn., Magazine Publishers Assn. idver- and Tobacco Institute. ckage "If I was running a cigaret com- t Out- pany, I'd like to take this argument r Net- all the way to the Supreme Court, t seq.) because I believe we could win it )anies. and I think tv advertising would be , exec back in the picture for cigarets," cer of said Four A's president Leonard Hasn't Matthews. Congress banned ciga- zo ad- ret advertising on radio and tv in n out- 1971. epart- Mr. Matthews, who once han- idver- dled cigaret accounts as Leo Bur- oking nett Co. president, said he tried un- 'S successfully in the 1970s to con- vince Philip Morris Inc., New York, to carry a challenge of the The AMA acknowledged a "big fight ahead for years to come" in its quest. But general counsel Kirk John- son said several lawmakers are ready to aid the AMA goal of ban- ning tobacco advertising in all media as well as high-profile pro- motions such as the Virginia Slims tennis tournament, product place- ments in films, skywriting and street-corner handouts. The physicians group believes its call for a tobacco ad ban is on solid medical and.legal footing. Calling tobacco the nation's foremost health problem, AMA trustee Ron- ald Davis said cigaret advertising "has the capacity to deceive... to show smoking as socially accept- able...a symbol of athletic prow- ess. "Because of that ability to de- ceive, we believe we can't take a chance with the public's health," Dr. Davis said at a news confer- ence. "We believe the burden should be on the cigaret adver- tisers to show that their advertis- ing plays no role" in inducing peo- ple to smoke. Cigaret advertisers have con- tended their messages merely in- duce. brand-switching and rein- force brand loyalty. The AMA included advertising for smokeless tobacco in its ad-ban resolution and endorsed cigaret- like health warnings for smokeless .labels. The AMA's ultimate goal is a tobaccoless society by the year 2000. To mount an effective argument for banning all tobacco ads, it would be necessary, based on pre- vious Supreme Court rulings, to show that a significant state issue is involved; that a ban serves that state interest, and that a ban is the least restrictive method of serving that interest. On another issue, the AMA's 371-member house of delegates also came out last week against di- rect-to-consumer advertising of prescription drugs. That recommendation, reflect- ing the AMA's concern that con- sumer advertising can't provide complete information to patients, contrasts with the Food & Drug Administration's liberalized atti- tude toward consumer advertising for some prescription drugs (AA, Dec. 9). The AMA took no action on a third advertising issue, referring for future consideration a set of resolutions constraining alcohol ads. The resolutions, ranging from an outright tv and radio ban to al- lowing ads only during certain viewing hours, are not expected to get much future attention, one well informed AMA official said.# s, na- tv-radio ban to the Supreme Court. ts for Before the advertising commu- : reve- nity begins countering the AMA's esents lobbying influence on Capitol Hill, reve- Mr. Matthews said, "we first have would to assess where the Congress d ban. stands, because maybe there is less .wspa- concern than one might think. ,tional After that, maybe we just have to concentrate on getting the facts to the congressmen" 2d re- ANA president DeWitt Helm th re- ~ sounded equally willing to join the illiayn battle. Scott "We're concerned and a little bit surprised that a group as sophisti- cated cated as the AMA is not more con- scious of the legal and constitu- tional issues involved," Mr. Helm said. "If they want to regulate sales instead of advertising-which I'm not suggesting-then that would on the seem to be the legal alternative, aides not banning the ads." Proponents of an ad ban are funch, "chiseling away at some of our iarket fundamental legal concepts," he :h of a warned. largest "And if that is the case, then ilvy & maybe the issue is ripe for the Su- y now preme Court to hear," Mr. Helm ort es- said. "Maybe we are going to have t. Unit to go through this fight to put the to 4.56 whole issue of advertisers' rights to rest." week Walker Merryman, vp-commu- rn tar- nications for the Tobacco Institute, .he re- called the AMA position an "egre- as the gious assault on First Amendment aot the rights" and said the American Is pro- Civil Liberties Union has volun- :)rands teered to carry tobacco's litigation burden, should the need arise. t By STEVEN W. COLFORD WASrnxcroN-The battle between the Internal Revenue Service and nonprofit publishers over the tax treatment of ad revenue reaches the Supreme Court next month. The Supreme Court is reviewing a U.S. appeals court decision won by the nonprofit American College of Physicians, Philadelphia, that overturned IRS policy toward magazines pyblished by "educa- tional" nonprofit organizations. Under a 1969 IRS ruling, non- profit organizations such as trade associations and professional socie- ties have been paying taxes on their ad income, just like their for- profit competitors in publishing. Among those supporting the IRS is the Assn. of Business Publishers, New York, representing for-profit publishers, which filed a friend-of- the-court brief. Oral arguments are scheduled before the Supreme Court Jan. 21. The tax-paying debate revolves around ACP's monthly magazine, Annals of Internal Medicine, which features ads for Valium, Maalox and other medical items. In the appeals court case, the court concluded the advertising was related to the organization's educational function and contrib- uted to its educational purposes by "appris[ing] internists of develop- ments in their field" and that ad revenues were related to the non- profit group's tax-exempt pur- pose.# Hines (Continued from Page 3) of new varieties." Oatmeal choco- late chip, oatmeal cinnamon, oat- meal raisin and peanut butter nut flavors were introduced this sum- mer (AA, Apri18). Grey Advertising, New York, is producing new tv spots and trade journal advertising for the conve- nience-pack line similar to ads used in earlier test markets. Tv spots •have begun airing in New York, Philadelphia, Detroit, Chicago and north-central Illinois, Ohio, Georgia, Dallas, Houston, and parts of North and South Carolina. These are "designed to show that the product can be pur- chased at a number of locations be- sides retail shelves," said the P&G spokesman. The tv spots, themed "Any- where, anytime, now you'll snack on Duncan Hines," show people eating Duncan Hines cookies while involved in such activities as fish- ing, skateboarding and working. Media spending for the conve- nience packs comes from P&G's estimated $15 million budget for the Duncan Hines ready-to-eat line. Advertising for Frito-Lay's Grandma's brand is handled by Foote, Cone & Belding, New York.# ....a_-...,, -.._..^-_.. ington, with sales of ; last year. The Hafts, who de, TIMN 0135612, te ~ .. `•. ... , ~~ v Yo1 importan faster wa ~ Of Just call (301) 26; W1': And keel D 1984 A~rri_^.