'Conceivably, they may think they have everyone who is even thinking about smoking a cigarette on their mailing lists, and they may think it’s cheaper and attracts less flack to stick to direct mail, promotions and point-of-purchase.'


Big Tobacco kicking
its magazine habit

Philip Morris yanks $s from 80 titles, in big retreat

By Jeff Bercovici

When tobacco advertisers quit billboards three years ago, as part of an anti-smoking settlement with the states, those ad dollars very quickly migrated to magazines. At the time, it appeared they would remain.
   They are now again in flight, this time out of magazines too. It is unlikely they will come back.
    After eliminating dozens of magazines from its media plans in 2000, Philip Morris is cutting again. 
    These newest cuts are both greater in extent and different in nature from those of two years ago. Whereas the earlier purge was aimed at getting out of magazines with large numbers of underage readers, the current reduction is motivated not by political or regulatory concerns, at least not primarily.
    Rather, the company appears to have decided that it is no longer very cost effective to market its products through magazines.
    Moreover, R. J. Reynolds, the No. 2 tobacco company, will most likely follow suit, and may even have begun to do so already.
    While Philip Morris is keeping silent about its long-term marketing strategy, its current actions fuel speculation that it may be positioning itself for a total or near-total exit from magazines within the next few years.
    Details are scarce, and confusion is rampant. Publishers are saying very little, whether for fear of alienating Philip Morris or because they themselves don't yet know how they figure in the company's plans.
    What's known is that Philip Morris USA, whose brands include Marlboro, Parliament, Virginia Slims and Merit, is running no magazine advertising in the early part of the year.
    Furthermore, the company has eliminated a large number of titles--some 80 in all, according to industry sources--from its 2002 media plan.
    Playboy, Maxim and Esquire are said to be among the titles cut, although none of them responded to a request for comment. Two of their competitors, Gear and Stuff, confirm that they have been dropped.
    A Philip Morris spokesman says that the new cutbacks are the result of a business decision rather than a political or moral one.
     It was the latter types of consideration that prompted the company’s June 2000 announcement that it would stop advertising in 42 titles whose audiences consisted 15 percent or more of readers age 18 and under, in keeping with guidelines suggested by the Food and Drug Administration.
     Among the titles denied Philip Morris dollars at that time were People Weekly, Better Homes & Gardens, Entertainment Weekly, and Vogue. The company also reaffirmed its decision not to advertise in magazines like Sports Illustrated, Rolling Stone and Spin, which were determined to have significant youth appeal.
    "The standard that we adopted [in 2000] still applies, but we've made some decisions based on our business priorities that will result in our advertising in fewer magazines this year," says spokesman Tom Ryan.
    He declined to comment further on the strategy behind the reductions, pointing out only that Philip Morris has decreased its overall ad spending by about 50 percent since 1999.
    Getting out of magazines may be attractive to Philip Morris for both economic and political reasons, says Prof. Richard A. Daynard, president of the Boston-based Tobacco Control Resource Center.
    For one thing, the company already relies far more heavily on promotions and point-of-purchase displays than on print advertising. Moreover, its brands, especially Marlboro, already have so much market share that the benefit of advertising them in print may be negligible.
    "Conceivably, they may think they have everyone who is even thinking about smoking a cigarette on their mailing lists, and they may think it’s cheaper and attracts less flack to stick to direct mail, promotions and point-of-purchase," says Daynard.
    Meanwhile, he notes, "They’re still getting hammered in lawsuits, and in the cases where they’ve lost, they’ve been ordered to pay huge punitive damage awards." An ad stoppage, he says, would allow Philip Morris’s lawyers to claim to juries that the company has mended its ways.
    But if Philip Morris gets out of magazines, will its competitors do likewise?
    Not necessarily, says Daynard.
    "I think for a while the other tobacco companies would think that this is a great marketing opportunity," he says. "The rest of the cigarette companies are very suspicious of Philip Morris because they've watched it gobble up their market shares. The other companies may think this is yet another trick by Philip Morris."
    In 2000, Philip Morris USA spent $216 million in magazines, according to CMR. Full-year numbers for 2001 aren't yet available, but spending in the first nine months of last year totaled about $81 million, putting the company on pace for about $108 million.
    No. 2 cigarette maker R.J. Reynolds has acted similarly, spending $119 million in magazines in 2000 but only $38 million in the first nine months of 2001.
    At least one publisher says R.J. Reynolds also appears to have cut its print spending dramatically in the first half of this year.
    Brown & Williamson, the third-largest tobacco seller, actually stepped up its magazine spending last year, spending nearly as much in the first nine months of 2001 ($22.4 million) as in all of 2000 ($23.8 million), according to CMR.
    The company, a subsidiary of British American Tobacco, reportedly plans to spend the same this year as last.
    Tobacco spending in magazines was 36 percent lower in 2001 than in 2000, according to a spokeswoman for the Magazine Publishers of America.
    The Publishers Information Bureau stopped listing Cigarettes, Tobacco & Accessories as a category in its monthly press releases in 2001 as the category fell from 13th to 16th in terms of spending.
    In the first three-quarters of last year, Philip Morris spent most heavily in Time, Family Circle, Woman's Day, and Playboy and Ladies' Home Journal, according to Competitive Media Reporting.
    Time led the list with more than $8 million worth of Philip Morris money, Family Circle got about $7 million worth and Woman's Day took in a little more than $6 million. New York, Vanity Fair, Southern Living, Maxim and Yahoo Internet Life were also in the top 10.

February 7, 2002  © 2002 Media Life

-Jeff Bercovici is a staff writer for Media Life.

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