Business review; Banning advertising for cigarettes
From the national educational radio network here is a Business Review ASSOCIATE PROFESSOR ROSS Wilhelm of the University of Michigan Graduate School of Business Administration presents his views in the commons of business and economic activity. Recently the Federal Communications Commission announced a proposal to ban all cigarette advertising except certain low tar nicotine brands from radio and television. In a six to one decision the commission argued that such advertising is not in the public interest and the ban will take effect on July 1st when the federal cigarette labeling and advertising Act of 1965 expires. The 1965 act which added the health warning to cigarette packages specifically prohibits the FCC from regulating cigarette advertising on health grounds. The move to ban side John advertising is the second major move by the Commission against the tobacco industry in recent times of course. The first was the action to force broadcasters to run anti-smoking commercials on an equal time with cigarette ads cigarette advertising is an
important although not a major source of advertising revenues for the broadcasting industry. About two hundred million dollars a year are spent on television ads which is about 7 percent of national television revenues and about 23 million dollars a year are spent on radio. The total spending on radio and television advertising however is about 83 and a half percent of the money the tobacco companies spend on advertising. It's not possible to forecast what action the Congress will take in response to the FCC order. A number of bills have been introduced into the Congress which would in effect extend a modified version of the 1965 act. It does seem likely that the Congress will do something to modify the commission's authority in this area. Considering the large numbers of people who have a direct economic stake in the tobacco industry and also considering that most smokers seem to be fed up with the actions of government and the anti-smoking reformers who keep Dunning the world with the same old tale one does get sick and tired of having someone to keep carping and them at him about something
like smoking when the smoker has heard the same story a thousand times before. I do wonder how many smokers keep on smoking simply because they respond negatively to the incessant efforts to persuade them to stop smoking. This of course raises the real question as to the probable effects of the proposed ban on advertising over radio and television. Will the ban have any impact upon the total consumption of cigarettes. I doubt it is due many in the cigarette industry. The first and most obvious thing which probably will occur is that the total amount spent by the cigarette companies and other advertising media will increase. It seems likely that the ban will be a blessing for newspapers magazines and other print media as well as for outdoor advertising and transportation advertising. It seems likely that the number of billboards for instance advertising cigarettes will increase which should gladden the hearts of those opposed to this industry. The ad impressions transmitted by the tobacco industry through the non-electronic advertising media probably will offset any tendency for the
total cigarette sales to decline. The ban on cigarette ads over the airwaves also will largely silence the anti cigarette propaganda. The ban on television and radio advertising will most likely have the effect of reducing the total spending on advertising by the cigarette industry. It seems likely that even an increased schedule of advertising in the print and other non electronic media would not absorb the two hundred twenty three million dollars now being spent on television and radio. If this is the case and if total sales do not decline significantly and if the relative competitive positions of the firms remain pretty much as they are then it's likely that the profits in the tobacco industry will rise significantly. That's tobacco common stocks might be an interesting speculation. In addition since the tobacco companies have been diversifying themselves into other industries quite widely over the past five years the added profits probably will be used to acquire additional diversification. On this basis the band might not be unwelcome by the shareholders of the tobacco companies nor their management.
- Business review
- Producing Organization
- University of Michigan
- National Association of Educational Broadcasters
- Contributing Organization
- University of Maryland (College Park, Maryland)
- AAPB ID
- Episode Description
- In program number 402, Ross Wilhelm talks about a possible ban on cigarette advertising.
- Other Description
- This series, hosted by Ross Wilhelm, focuses on current news stories that relate to business and economic activity.
- Broadcast Date
- Media type
Producing Organization: University of Michigan
Producing Organization: National Association of Educational Broadcasters
Speaker: Wilhelm, Ross, 1920-1983
- AAPB Contributor Holdings
University of Maryland
Identifier: 61-35c-402 (National Association of Educational Broadcasters)
Format: 1/4 inch audio tape
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- Chicago: “Business review; Banning advertising for cigarettes,” 1969-03-04, University of Maryland, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC, accessed October 23, 2021, http://americanarchive.org/catalog/cpb-aacip-500-pk07237g.
- MLA: “Business review; Banning advertising for cigarettes.” 1969-03-04. University of Maryland, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Web. October 23, 2021. <http://americanarchive.org/catalog/cpb-aacip-500-pk07237g>.
- APA: Business review; Banning advertising for cigarettes. Boston, MA: University of Maryland, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Retrieved from http://americanarchive.org/catalog/cpb-aacip-500-pk07237g