Big Tobacco Has Trimmed Billions from Advertising Campaigns

Tobacco companies spent billions less on cigarette advertising over a recent three-year period, showed a Federal Trade Commission study released Friday. The largest companies' collective marketing budget shrank from $12.49 billion in 2006 to $9.94 billion in 2008.

"We like that," Patrick Reynolds, executive director of the anti-smoking group Tobaccofree.org, told DailyFinance. "It reflects the decreasing amount of sales in the U.S. The amount they spend on advertising is in direct correlation to their sales."

But Reynolds was not overjoyed. Despite a ban on TV, radio and billboard advertising and an industry pledge to not target children, Big Tobacco is still able to allocate billions of dollars to spread the word on its products, Reynolds said. Reynolds is the grandson of tobacco magnate R.J. Reynolds (RJR). The younger Reynolds said he joined anti-smoking forces after his father, R.J. Reynolds, Jr., died of emphysema due to smoking the company's Camel and Winston brands.

The FTC report also illustrated Big Tobacco's shifting strategy. With print outlets becoming less attractive, major manufacturers devoted 72.1% of their marketing resources -- or $7.17 billion -- to provide discounts for retailers, the FTC said. The deals often mean that store owners agree to post behind-the-counter displays to boost sales, Reynolds said. Still, shipments to wholesalers and stores dipped from 350.5 billion cigarettes in 2006 to 322.6 in 2008, according to the study.

The FTC generally releases its tobacco figures every few years, and its time-frames tend to lag because it doesn't have enough money to keep up, a spokeswoman said to DailyFinance.

One trend that will certainly keep watchdog organizations on alert for the next round of statistics is the increase in smokeless tobacco advertising. Spending on brand awareness for smokeless tobacco rose from $2.59 billion in 2006 to $2.76 billion in 2008, according to a separate report.

The World Health Organization estimates that 500 million of the planet's current population will die from tobacco use.

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Louis

You would think that the cost of a pack of cigeretts would encourage a smoker to stop smoking. But sadly,it dosen't .
$ 4,50 a pack..Yipes !!!

August 01 2011 at 12:16 AM Report abuse rate up rate down Reply
abcadams1

As a former insider on this subject, I know first hand there is fraud in giving money to retailers. Many retailers, especially the retailers that come from Asia and the Middle East, pocket the money. The retailers say they will put the product on sale, they will keep the signs up, and as soon as the rep leaves the stores, they take the signs down and charge full price for the product - while pocketing the sale money for themselves. I believe the tobacco companies are throwing their money away by investing 72.1% of their money in product reductions. It is ineffective and stupid. That's another reason people are quitting smoking. There is no glamour in price reductions. Cigarettes are a status item. Where's the status when it is only price reductions. Status should come from advertising and beautiful people smoking the product.

July 31 2011 at 10:23 PM Report abuse rate up rate down Reply
dreamrider6

Hopefully this horrible industry will gradually die out.

July 31 2011 at 5:57 PM Report abuse -1 rate up rate down Reply
classof68gto

Insurance companies charge smokers more as they are at risk of setting their own house on fire by falling asleep while smoking in the house. It is not discrimination it is the risk the insurance has to take when they insure a smoker.

July 31 2011 at 4:46 PM Report abuse -3 rate up rate down Reply
1 reply to classof68gto's comment
WILD BILL

So if a drunk is opening his Big Mack and drops his cig is it the booze the trans fat or the cig that`s the problem? Only kidding i smoke and i wish they would do away with all of it.

July 31 2011 at 5:32 PM Report abuse rate up rate down Reply
classof68gto

It is the added taxes that make cigarettes so expensive not the companies that make them.

July 31 2011 at 4:43 PM Report abuse +2 rate up rate down Reply
mclkarim

Does that mean they will reduce their cigarette prices? I doubt it.

July 31 2011 at 1:56 PM Report abuse -2 rate up rate down Reply
Ike Reeves

How nice that RJ Reynolds has cut its advertising budget.
Anyone see the 60 minutes special on the tsunami of advertising aimed at children in third-world countries?
You may want to take a brief reflective pause before awarding cigarette companies their Nobel Prizes for achievements in health technology and humanitarianism. Just sayin' .

July 31 2011 at 8:55 AM Report abuse +1 rate up rate down Reply
1 reply to Ike Reeves's comment
WILD BILL

Those kids can`t buy cig`s they work 70 hours a week and only make $0.75

July 31 2011 at 5:35 PM Report abuse +1 rate up rate down Reply
Lee

Just lost another friend to lung cancer! It is very hard to watch a friend die.

July 31 2011 at 3:59 AM Report abuse +1 rate up rate down Reply
Chip

The ones who really need to trim their advertising budgets are the damn insurance companies. I'll have nothing to do with the ones that really saturate the airwaves. I name specifically Progressive, Geico, Allstate, The General, and State Farm.

July 31 2011 at 12:21 AM Report abuse +5 rate up rate down Reply
Kleestard

This is creating advertising jobs in the Obamanation...LMAO!!

July 30 2011 at 9:47 PM Report abuse -5 rate up rate down Reply