Smoke and Mirrors: Philip Morris Swore off Using Print Advertising to Build Its Brands, but the Magazine Ad Habit Was Harder to Kick Than Anyone Imagined. (News Analysis)
Mnookin, Seth, Folio: the Magazine for Magazine Management
Six weeks after going cold turkey, Philip Morris USA, the country's dominant cigarette maker, admits it can't break the habit. Once again magazines will carry ads for Marlboro, Merit and Parliament. But this year is likely to be the second straight year the company cuts its marketing budget for print: the $114 million the company spent in magazines last year was almost 50 percent less than in 2000, when it spent $216 million.
And with Philip Morris USA making up more than 40 percent of the $267 million the tobacco industry spent in magazines last year, competitors and publishers look to the company's print budget as a gauge of where the industry is heading.
"You'll probably start seeing our ads appearing in a matter of weeks," says Brendan McCormick, manager of media affairs at Philip Morris USA. For competitive reasons, McCormick wouldn't give specifics, but he did say the company was talking to both weeklies and monthlies. "We're constantly reviewing our strategies."
Philip Morris USA's pullback from print during the first month and a half of 2002 inspired some barely concealed panic on the part of magazine publishers. For more than three decades, magazines and newspapers have been some of the last refuges for cigarette ads--ever since the tobacco industry pulled its spots off television in 1971. But lately, even print has become less hospitable. Philip Morris' massive drop in print advertising from 2000 to 2001 resulted from restrictions in 1998's Master Settlement Agreement, which the country's tobacco manufacturers signed with the Attorneys General from 46 states.
"Now we put no advertising in publications that go to more than two million youths, or that have more than 15 percent of youth readership," McCormick says, noting that the company also stopped advertising on the back covers of magazines. "That change single-handedly drove us out of about 50 publications and resulted in a reduction of our overall advertising by about 50 percent," he adds.
That downward trend looks almost certain to continue. The big-three American cigarette companies--Philip Morris USA, Brown & Williamson and R.J. Reynolds--are all relying more heavily on direct marketing. "Today, our primary focus is on consumer relationship marketing--that is, marketing to specific individuals who have confirmed that they are both adults and smokers," reads a corporate statement on Brown & Williamson's Web site.
While that's a bit of hot smoke--the makers of cigarettes, like all product manufacturers, depend on winning over new consumers rather than preaching to the converted--it does reflect the thinking in the industry. "It's just more cost-effective to go direct," says one tobacco company official speaking on the condition of anonymity. …