We have concluded in the past that television was a better way of advertising our products. Now we will have to take a careful look at all of the opportunities that we have in this area.

So, it will take some time and I certainly will say that we at Philip Morris will be mindful of some of the views you have expressed with respect to our behavior.

Senator Moss. In the House hearings, Mr. Cullman, Dr. Eugene Levitt, who I believe testified on behalf of the cigarette industry, testified that children were attracted to their cigarette brand by coupons. Would you give me any comment on the intention of the industry in this field of coupons?

Mr. CULLMAN. That rather surprised me, although he did testify for the industry. All of the research I have studied indicates that coupons are more interesting to ladies in their middle years, family groups, really, and it would appear to me that the experience of coupons in the United States so far has not indicated they are a really consequential effective means of inducing new brands or promoting existing brands.

There are a number of fairly large cigarette brands that have had coupons on them for many years. In the last 4 or 5 years many of the major companies, in addition to the major one that already has coupons, have attempted to popularize coupon cigarettes and I think I can say that even as it relates to our competitors, they have all been singularly unsuccessful.

So, I would say the coupon has not been an important force so far. And I think we could take the experience of stamps and other devices such as that, this doesn't seem to be too attractive in the United States.

Senator Moss. I understand that magazine publishers maintain an informal quota, limiting the promotion of liquor in relation to other ads in their magazines. Would you support a voluntary agreement by magazine and newspaper publishers to maintain present ratios of cigarette to noncigarette advertising?

Mr. CULLMAN. Well, it is a new idea to me, frankly. I would say that it would depend on their own levels of the art. But having been relatively out of this media for some time, it doesn't apear to be a move that would be unattractive.

It depends on their levels, it seems to me. We certainly would approach that constructively.

Senator Moss. Of course the publication-if the publication had the informal quota maybe you wouldn't be able to buy more space. But I just wondered if this sounded unacceptable to the industry at this point.

Mr. CULLMAN. Well, I can't speak for the industry as I have tried to say, and I don't mean to avoid the direct question in that way.

I think you can understand that even though we have representatives of all of the companies here, they would be very unhappy if I in any way tried to express their points of view on this except as related to the statements I have made.

I think something like that would be of questionable value because we go in and out of magazines from time to time. Some issues would have very little advertising and others more.

So it would surprise me very much if cigarette advertising would be really a significant percentage of the total magazine advertising in

our society. When I look at automobiles and all of the appliances and all of the many products that are being offered to the public, it seems to me that cigarettes could take their proper place.

Senator Moss. Well, because of the large amount of money that would be freed up in the event that the cigarette industry ceased to advertise on television and radio-I am interested of course in whether that money would flow at once into a great acceleration of advertising in other media.

So, I would like to ask the representatives of the various companies who are here if they could each furnish me for the record-to put in the record a statement indicating the intention of that company regarding the increase in expenditures for magazines and newspapers and billboards and point of sale advertising in the event that the other advertising goes out.

Mr. CULLMAN. I would like to comment on that. Without appearing to be facetious, although $250 million is a lot of money, and even divided among the six companies it is still a lot of money, but spread over our country in newspapers, magazines and billboards it would surprise me if anybody but a real student could perhaps detect the difference.

Money can be spent very, very rapidly in all of the various media we have. Newspapers, magazines, billboards, et cetera. That money will go very rapidly and will not be in my opinion very noticeable.

(See p.-.)

Senator Moss. Do you think the percentage of increase in display would not be noticeable or greatly noticeable if all of that money flowed into the other types of advertising?

Mr. CULLMAN. I don't think it would be dramatic if it were spread relatively evenly over all of the media that have previously not received any cigarette advertising.

Newspapers, for example, still get the largest amount of dollars in advertising in the whole United States. They exceed television by quite a considerable degree.

Senator Moss. Even at the present time?

Mr. CULLMAN. At the present time. It is roughly twice what television is.

Senator Moss. That is interesting. I guess because we only read one newspaper, and we see all networks-that doesn't seem a reasonable differential. But you undoubtedly have the figures right there.

If you do have those figures and could furnish them for the record, I think it would be helpful.

Mr. CULLMAN. Yes; I do have them.

Senator Moss. You can furnish them after the hearing for the record.

Mr. CULLMAN. Of the $17 billion spent in 1967, $4 billion in newspapers, $1 billion in magazines, $580 million in business publications. So, that is almost $52 billion and television got $2.2 billion, radio $800 million. So, it is roughly twice as much in the newspapers and magazines and business publications. The total advertising in the United States, that is.

Senator Moss. Those are very interesting figures. We would like to have them in the record. Mr. Cullman, you agree that advertising should not be directed toward young people.

Isn't any association with romantic or heroic settings inevitably attractive to young people, regardless of the intention of the advertiser?

Mr. CULLMAN. Well, if you believe that romance is restricted to young people, I guess that is possibly true.

Senator Moss. I sometimes wonder if it should be reserved just for young people.

Mr. CULLMAN. Well, we get taken to task quite regularly for our cowboy being a symbol that the young people like. And we have done a lot of research on that, and we find the cowboy is way down the list of symbols that appeal to today's younger people.

I would say that I think romance covers many years of peoples' lives.

Senator Moss. Here is an advertisement I tore out of a magazine that seems to me to be a very direct appeal to young folks.

Mr. CULLMAN. Yes. Of course, I am more familiar with our own advertising.

Senator Moss. Naturally.

Mr. CULLMAN. We have only old cowboys.

Senator Moss. Well, there are a lot of them. They do tend toward this romantic appeal very largely. Don't you agree with that?

The CHAIRMAN. Turn the back around and show him the back.
Senator Moss. Yes.

The CHAIRMAN. Well, I don't think we should get into at what age you should lose romance. I think probably that many of us in this room and the dais too, here-let us not be jealous of this.

Mr. CULLMAN. Thank you, Senator Magnuson.

Senator SPONG. Also, Mr. Chairman, that cowboy is getting younger looking every year.

Mr. CULLMAN. Well, I think you know that we have taken a large number of steps which we thought did direct our advertising away from younger people, under the cigarette advertising code, some of which I have enumerated in my statement.

We do not show any models that either are or appear to be under 25 years of age and we don't show athletes-we don't have testimonials by athletes. And there were areas that we felt were important to young people and there may be others.

That is a matter of judgment and it is a very difficult one, too, as Senator Magnuson says. That girl you showed may be attractive to us older folks and not so attractive to the younger folks, I don't know.

Senator Moss. Would you be willing to cooperate with the Federal Trade Commission in revising your guidelines to make it clear that the advertisements utilizing the setting of attractive young people be banned?

Do you think the FTC should be the guideline setter in minimizing this field?

Mr. CULLMAN. Well, they certainly have exercised considerable discipline over the cigarette industry in the past. I think they understand our problems. And I think they are a logical place to go for deciding whether or not advertising is deceptive or whether it unduly misleads. I would like to feel that our own guidelines, our own code, would be sufficient.

I believe in voluntary control where it is possible, or else we might end up with advertisements without any background. I think you can conclude that almost any scene is romantic if you want to take some poetic license. That is the problem.

We try to portray our products in a generally attractive way and still make them adult.

Senator Moss. You indicated in your statement that under this third category, "smoking is an adult custom, cigarette manufacturers have taken a great many steps to avoid advertising directly to young people," and that is the line of questioning that I was following here a little.

We intend to show a film, excerpts from various tobacco commericials, later in this hearing, for the purpose of trying to make an assessment of whether it seems to us to be directed largely to young people or to entire young people to begin smoking rather than being directed to the adult community.

Mr. CULLMAN. Well, it would be very interesting, because when you take isolated cigarette commercials, it is very difficult to evaluate them as constrasted to a cross section of all of the commercials that the cigarette companies have been using.

We have been going through a very stringent control, I believe and I might say that I have just come across a new study by Alfred Pollack that demonstrates that cigarette advertising is way down the list in I think it was down around 3 percent of 996 teenagers, a group between the ages of 13 to 19 who were interviewed and asked what motivated tthem to smoke. And cigarette advertising, which is a reflection perhaps on our advertising, was way down the list, almost at the bottom of the list.

Something like no more than 3 percent of those who responded said that advertising was a reason for either smoking or having started to smoke.

Now, this report was carefully developed and represents a cross section of the entire United States. And they are willing to state that it is significant. They feel, at least these 996 who responded, said that cigarette advertising was not a significant reason for smoking. Senator Moss. Maybe your advertisements are very subtle and the young folks don't know what started them. But that is a significant point that you make.

Mr. CULLMAN. We have that study, sir, if you would like to have it. Senator Moss. Yes, I would like that also to go into our files if you will supply it.

Senator Moss. I have one other question: What are the intentions of the cigarette companies that make small cigars now with respect to TV advertising? Are they included in this general statement this morning, or are small cigars in a different category?

Mr. CULLMAN. I have to say that we don't make any small cigars. They have been considered as cigars and it would seem to me that they do not fall under this offer to go off the broadcast media.

And they have not, I might say, in evaluating their significance, they have not proven to be a satisfactory substitute for cigarette smoking. Of course, a lot of the small cigars contain many of the same ingredients that cigarettes do. They are not essentially a very different product, except the paper.

Senator Moss. If the magazine and newspaper publishers undertake an advertising council or similar public service program on the hazards of smoking, would the cigarette industry exert economic pressure on them to discourage this?

Mr. CULLMAN. Here again I would have to say I can't speak for the cigarette companies, but we have always supported the Advertising Council, and it seems to me that that is an appropriate way of urging moderation in smoking and pointing out to people the possible hazards of smoking in a factual and fair way. I can say this, I wouldn't oppose it.

Senator Moss. On this question of the budget of the various companies, I would appreciate it if each of the companies represented here this morning would supply for the record their advertising expenditures in the various media for this past year; each form of promotion. If that could be done, I think that would be very helpful to our record.

(The requested information follows:)

Hon. FRANK E. Moss,

PHILLIP MORRIS, INC.

100 Park Avenue, New York, N.Y., July 28, 1969.

Chairman, Senate Commerce Consumer Subcommittee,
U.S. Senate,

Washington, D.C.

DEAR MR. CHAIRMAN: I have been informed that there may be some misunderstanding with respect to certain points I made during the course of my testimony on Tuesday, July 22. Because of the obvious importance of the matter, it occurred to me that it might be helpful to restate our position on these issues.

First, as I testified, there are "great differences" between the broadcast and printed media. Young people are exposed to broadcast advertising differently than they are to print advertising. It is well known that young people spend a great deal of time in viewing television and in listening to the radio; it takes an affirmative act on the part of the viewer or listener to avoid broadcast advertising. By contrast, much less time is spent by young people in reading newspapers and magazines, and an affirmative act is required by the reader to see and comprehend such advertising. Objections to cigarette advertising on the broadcast media based on appeal to youth do not apply to cigarette advertising in newspapers and magazines.

Second, in discussing future cigarette advertising on media other than television and radio, I stated:

"It is the intention of the cigarette manufacturers to continue to avoid advertising directed to young persons; to abstain from advertising in school and college publications; not to distribute sample cigarettes or engage in promotional efforts on school and college campuses; not to use testimonials from athletes or other celebrities who might have special appeal to young people; to avoid advertising which represents that cigarette smoking is essential to social prominence, success, or sexual attraction; and to refrain from depicting smokers engaged in sports or other activities requiring stamina or conditioning beyond those required in normal recreation."

As I testified, it is the intention of all nine companies for whom I spoke to follow these advertising and promotion principles, whether or not these companies are members of the Cigarette Advertising Code.

Third, in response to your question whether money presently spent on broadcast cigarette advertising "would flow at once into a great acceleration of advertising" in newspapers and magazines. I pointed out that following the elimination of broadcast advertising, the cigarette manufacturers will confront an unprecedented situation-they have advertised on radio for nearly forty years and on television for almost twenty years. None of the companies has had experience in recent times in merchandising its products without use of the broadcast media. Obviously, each company will need a period of time to adjust and to determine its advertising requirements. With respect to Philip Morris Incorporated, I testified that "it would surprise me . . . if we made any radical