Tobacco has always been a difficult issue for the advertising industry because, while adland likes the tobacco giants’ cash, it finds the whole business just a little distasteful.
This image problem is something the tobacco industry itself feels keenly, which is why Philip Morris – best known for Marlboro cigarettes – is changing its name to avoid all those nasty tobacco stains sticking to its corporate image.
As of this week Philip Morris wants to be known as Altria and it will be spending big bucks – industry estimates suggest at least 20-million British pounds – trying to tell the world about its new moniker. It will also be spending millions to run a high-profile television advertising campaign in the United States, touting the company’s support of worthy causes. There is also a new corporate tagline: ”Altria – where people and performance make the difference.”
”Philip Morris’s problem is twofold,” says Tom Blachett, deputy group chairperson at Interbrand, a global branding consultancy operating mainly in the US and Europe. ”Firstly, cigarettes are, if you’ll pardon the pun, a business with no future. Lots of cigarette companies are looking at ways to separate out the tobacco side of their operation because it is seen as an industry in long-term decline. Secondly, it’s a business which can only really damage a company’s image. So the name change is about removing the opprobrium.”
This is something Philip Morris has been aware of for some time. One internal document discovered during tobacco-industry litigation proceedings was dated March 20 1990 and read: ”Top Secret: Operation Rainmaker. We must immediately change the name of either Philip Morris USA or PM Companies.” Another document suggested that a name change supported by a heavy PR push around the food and beer side of the company would help.
Philip Morris, you see, has spent a lot of time trying to become something other than a cigarette company. It purchased Nabisco for $19-billion and owns food giant Kraft and Miller breweries. Despite having Maxwell House and Kraft cheese on its roster of brands, however, tobacco still makes up 61,2% of the company’s $90-billion income.
It is tobacco’s high margins that have given Philip Morris a market capitalisation of $115-billion, nearly double that of General Motors and Ford combined. It owns 51% of the US cigarette market – with Marlboro’s 40% share making up the bulk of that. Changing the name of the holding company – which the company officially says is to ”create some clarity around the corporate entity” – is the first step in its bid to be seen as a global packaged-goods company.
”One of the strategies of the tobacco industry in the 1970s and 1980s was diversification,” says Allan Brandt, professor of medical history at Harvard University. Now the industry is in a period of re-evaluation. Where you place tobacco and how you maintain public image is partly a marketing strategy that they’re trying to resolve.”
While Altria sounds like some sort of medical procedure shouted out on ER, the beauty of the name – created by WPP Group’s Landor Associates in San Francisco – is that it means absolutely nothing. ”The name Altria does distance non-tobacco units from their controversial cigarette sibling,” says Don Pettit, president/CEO of brand consultancy Sterling Group. ”But the name and the logo isn’t as much connected to where the company came from and what the company is. It is an abstraction and it’s not an abstraction that’s obvious to the consumer. Even if you buy Philip Morris’s explanation that it’s an aspirational name and that they want their companies to reach higher, it’s not inspirational and does not really connect with what their businesses do.”
The question is, of course, will it work? ”These guys are some of the best marketers,” says Craig O’Keefe, CEO of Interpublic Group, Chicago. ”They’re creating an incredibly clean holding company. When you say this new name, you’re no longer saying tobacco. It’s got to help the stock, it’s got to help the image base.”
There are many people in the US, however, who are determined that it won’t work. The Campaign for Tobacco Free Kids (CTFK) has already started taking full-page ads in newspapers, magazines and business titles in the US, proclaiming: ”No matter how often a snake sheds its skin, it’s still a snake. After decades of marketing to kids, deceiving the public and manipulating its products, Philip Morris now wants to hide from its past. But it can’t hide this: more kids still smoke Altria’s Marlboros than all other brands combined. Philip Morris may be changing its name, but it’s not changing its ways.”
It is an uneven battle. Philip Morris is the second-largest advertiser in the US, spending 2,6-billion British pounds across all its brands in 2000. CTFK is funded by donations and has a tiny ad budget. But it is employing some classic protest techniques – placing speakers at Philip Morris’s annual general meeting to ask shareholders not to use the Marlboro image to target kids. It’s also lobbying politicians and talking to journalists. But it is an uphill struggle.
We did try to contact Philip Morris to talk about the name change, but the US office referred us to the London office, which referred us on to the Brussels office. The phone number they gave us never answered. It just kept ringing. However, Jay Poole, vice-president corporate communications at Philip Morris Management Corp, has given a statement to the US advertising bible Advertising Age in which he denies the move is about distancing the parent company from tobacco.
”Nothing could be further from the truth,” he says. ”Philip Morris USA and Philip Morris International are two terrific operating companies. Changing the name as the new CEO Louis Camilleri arrives presents an opportunity to create some clarity around the corporate identity.” When it comes to marketing the new company, he is a little vague. ”I don’t think we’ve made any decision yet on how we want to characterise Altria Group going forward. We’re kind of in a new place.”
The new place, of course, being one where ”people and performance make a difference”. Is this a message that the public and the sharp minds of financial analysts will accept? ”I don’t see why not,” Blachett of Interbrand says, with a laugh. ”It’s like teaching children. You just repeat and reinforce something until they accept it. In the end, with enough money spent, that’s what people will do.”