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Cancer Trends Progress Report – 2011/2012 Update

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> Tobacco Company Marketing Expenditures
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Tobacco Company Marketing
Prevention: Policy/Regulatory Factors

Tobacco advertising and promotion increases Americans’ tobacco use.

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Reported Annual Cigarette Advertising and Promotional Expenditures

Tobacco advertising and promotion are causally related to increased tobacco use. Cigarettes are one of the most heavily marketed products in the United States. In 2008, the five major cigarette companies spent $9.94 billion to advertise and promote cigarettes. The recently enacted Family Smoking Prevention and Tobacco Control Act, signed into law on June 22, 2009, provides the U.S. Food and Drug Administration (FDA) with broad authority to regulate tobacco product advertising. This legislation removes most federal preemption constraints on the ability of states and communities to restrict the time, manner, and place of tobacco advertising and promotions.

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Combined cigarette annual advertising and promotional expenditures by the five (six in 2007) major U.S. cigarette manufacturers, adjusted to 2008 dollars, as reported by manufacturers to the U.S. Federal Trade Commission (FTC).

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Period – 1970–2008

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Reported annual combined expenditures for advertising and promotion for cigarettes (adjusted to 2008 dollars using the gross domestic product implicit price deflator) increased in most years between 1970 and 2003. Since 2003, adjusted combined expenditures have declined.

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Most Recent Estimates

In 2008, adjusted combined annual expenditures for cigarette advertising and promotion totaled $9.94 billion.

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Healthy People 2020 Target

There are no Healthy People targets for reducing tobacco company marketing expenditures.

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Groups at High Risk for Being Targeted

The tobacco industry has strategically targeted various groups, including youth, young adults, and specific racial and ethnic groups. Much tobacco advertising targets the psychological needs of adolescents, such as popularity, peer acceptance, and positive self-image. Advertising creates the perception that smoking will satisfy these needs. Even brief exposure to tobacco advertising influences adolescents’ attitudes and perceptions about smoking and smokers and adolescents’ intentions to smoke. Strong and consistent evidence from longitudinal studies indicates that exposure to cigarette advertising influences non-smoking adolescents to initiate smoking and to move toward regular smoking.

In 2006, U.S. District Judge Gladys Kessler found the major U.S. cigarette companies violated the Racketeer Influenced and Corrupt Organization (RICO) statute, noting specifically that the companies “marketed and advertised their products to children under the age of 18 and to young people between the ages of 18–21, in order to ensure an adequate supply of ‘replacement smokers,’ as older ones fall by the wayside through death, illness, or cessation of smoking.”

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Key Issues

Most of the cigarette industry’s advertising and promotional expenditures are directed toward price discounts, which accounted for about 72 percent of total marketing expenditures in 2008. Tobacco advertising has been dominated by three themes: providing satisfaction (taste, freshness, mildness, etc.), allaying anxieties about the dangers of smoking, and creating associations between smoking and desirable outcomes (independence, social success, sexual attraction, thinness, etc.).

As cigarette advertising is curtailed in some traditional media, cigarette companies are exploring the use of new or non-traditional media for distributing pro-tobacco messages and images, including the Internet and cigarette packages. The tobacco industry has become increasingly sophisticated in applying market research to population segments to design products, messages, communication channels, and promotions more aligned with the needs and susceptibilities of particular market segments. This research results in more efficiency, greater reach, and increased effectiveness for marketing activities aimed at target populations.

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Additional Information on Tobacco Company Marketing Expenditures

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