Tobacco Makers Increase Promotional SpendingMarch 20, 2001
Research Summary
Although cigarette makers must adhere to advertising restrictions under the 1998 nationwide tobacco settlement, they still have managed to increase their promotional spending, Reuters reported March 15.According to a Federal Trade Commission (FTC) report, cigarette manufacturers increased promotional spending 22.3 percent in 1999.
Under the tobacco agreement, companies had to curtail certain types of advertising, such as outdoor billboards and branded promotional items like cigarette lighters. As a result, cigarette companies turned their promotional efforts to print ads and direct mail.
As stated in the FTC report, advertising in newspapers increased 73 percent to $51 million in 1999, while advertising in magazine rose 25.5 percent to $281.3 million, and direct-mail advertising increased by 63.8 percent to $94.6 million.
Cigarette makers also increased payments they made to retailers for shelf space and other in-store and point-of sale promotional considerations.
The FTC report showed that the $8.24 billion spent by the tobacco industry on advertising and promotions in 1999 was "the most ever reported by the major cigarette manufacturers."
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