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.

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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.