Come March, the FDA will decide whether tobacco companies can continue marketing menthol cigarettes. Thousands of advertisers who have a separate ethnic marketing strategies for any product that has health implications should be watching closely. So listen up, folks with ties to food, alcohol, soda, diet supplements and pharmaceuticals: There but for the grace of the federal government go you.
Everyone knows that Lorillard (LO) has for decades targeted its Kool and Newport menthol brands at the black community, sometimes with a comic lack of subtlety, as in this ad from the 1970s (right). But Lorillard has simply done exactly what most other major advertisers have done, regardless of the product: Segment their advertising so that some (or all of it for certain brands) focuses on minorities.
Lorillard's specific problems are that its product causes cancer and menthols are more addictive than regular cigarettes. Thus its general problem is the accusation that it targeted blacks and not whites with a more dangerous product. (In fact, this isn't quite true. Menthols aren't per se more addictive than other cigarettes. They're just tastier and easier to smoke. Thus they're harder to kick and easier to go back to.)
That subtlety is likely to get lost, however, as Lorillard lobbies to keep menthols legal. The Wall Street Journal reports that the company is pushing the line in black news media that a ban on menthols would create a large illegal trade in the cigarettes (note that the WSJ's copydesk avoided the term "black market"), and that would add an unnecessary burden to local law enforcement.
In other words, Lorillard is saying that its own best customers are criminals in waiting. For a company that already faces the accusation that it's racist because it advertised more dangerous products to blacks, that seems like exactly the worst argument it could have come up with.
But let's give Lorillard the benefit of the doubt for a second and ask whether it's true that the advertising of Lorillard and other tobacco companies created demand in the black community for menthol cigarettes. This fascinating study of historic internal company documents in the journal Nicotine & Tobacco Research shows that it's a genuine chicken-and-egg issue. Early on, companies noticed a small difference in preferences between blacks and whites, and then simply altered their targeting to adjust for it. The effort was self-reinforcing:
In 1953, Philip Morris commissioned the Roper organization to conduct a general survey of Americans' smoking habits. The only menthol cigarette on the survey and the only one of any importance in the early 1950s was Kool. The Roper survey showed that only 2% of White Americans preferred the Kool brand. By contrast, the survey reported that 5% of African Americans preferred Kools (Roper, 1953). This small difference in preference was successfully parlayed by Brown & Williamson executives, and later by the tobacco industry as a whole, into the 70% vs. 30% difference that we see today between Black and White menthol smokers, respectively.By 1974, the industry was fully segmented, but companies displayed little internal knowledge of why blacks liked menthols. A 76-page research brief on the topic by the William Esty Co. had only this to say about the issue:
In 1974, before the introduction of lights, Black-menthol smokers, to a greater degree than their White counterparts, believed menthol cigarettes were less hazardous/irritating than other cigarettes. This may help explain why lights have not done as well among Black menthol smokers as they have among the general smoking population.The false notion that menthols were healthier was not, in fact, created by tobacco companies. It was an unintended consequence of the FTC's regulation of tar content. In 1957, according to the N&TR study, consumers became concerned that tar was bad for them and began migrating to less tasty, low-tar filtered cigarettes (in industry parlance, the "Tar Derby"). In 1961, the Republican-administered FTC relaxed its tar regulations and consumers returned to more flavorful brands with filters. That played into Kool's hands:
Kool was one of the main beneficiaries of the ending of the Tar Derby in 1961; people could put down their nonfiltered cigarettes and pick up a filter-tipped Kool to get more taste, flavor, and strength.
Many people assumed that menthols had less tar; however, nothing could be further from the truth. Not only were Kools' tar and nicotine content comparable with the leading nonmenthol brands, but by the mid-1960s, Brown & Williamson's menthol offering contained more tar and nicotine than either of its main menthol rivals, Salem or NewportFrom that point on, companies increased their marketing efforts for menthols by targeting blacks, and as black smokers responded ... well, the rest is history. (As for the original reason why the black community initially showed a slight preference for menthols, it turns out Dave Chapelle was right: nobody knows.)
Which brings us back to the original point for any company with minority targeted advertising: Your intent is irrelevant, as is the notion that you merely responded to demand. If your product has negative health effects and you're advertising it to minorities, there's really no difference between Big Tobacco and you.