Quote from the New York Times:
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Joe Camel first appeared in the U.S. in 1988, in materials created for the 75th anniversary of the Camel brand by Trone Advertising. Trone is a mid-size agency in Greensboro, N.C., that Reynolds used on various advertising and promotional projects.
R. J. Reynolds to this day has denied Joe Camel was intended to be directed at children; the company maintains that Joe Camel's target audience was 25–49-year-old males and current Marlboro smokers. In response to the criticism, R. J. Reynolds instituted "Let's Clear the Air on Smoking", a campaign of full-page magazine advertisements consisting entirely of text, typically set in large type, denying those charges, and declaring that smoking is "an adult custom".
Internal documents produced to the court in Mangini v. R. J. Reynolds Tobacco Company, San Francisco Superior Court No. 959516, demonstrated the industry's interest in targeting children as future smokers. The importance of the youth market was illustrated in a 1974 presentation by RJR's Vice-President of Marketing who explained that the "young adult market . . . represent[s] tomorrow's cigarette business. As this 14-24 age group matures, they will account for a key share of the total cigarette volume -- for at least the next 25 years." A 1974 memo by the R. J. Reynolds Research Department points out that capturing the young adult market is vital because "virtually all [smokers] start by the age of 25" and "most smokers begin smoking regularly and select a usual brand at or before the age of 18.
In July 1997, under pressure from the impending Mangini trial, Congress and various public-interest groups, RJR announced it would settle out of court and voluntarily end its Joe Camel campaign. A new campaign with a more adult theme debuted: instead of Joe Camel, it had a plain image of a quadrupedal, non-anthropomorphic camel. This image is still used in advertisements for Camel today. As part of the agreement, RJR also paid $10 million to San Francisco and the other California cities and counties who intervened in the Mangini litigation. This money was earmarked primarily to fund anti-smoking efforts targeted at youth.
A less serious controversy exists in the form of the supposed "hidden" image within Joe Camel's face. According to a popular urban legend, the camel is designed to resemble male genitalia. This situation is lamented in the Pansy Division song "Touch My Joe Camel". In it the lead singer claims, "The company denies it all They say it's not a cock and balls Little kids, even they understand It's not a camel's face, but a sexual gland"