Big Tobacco Raises DM Spending

American cigarette manufacturers have begun direct mail efforts and sophisticated database management as they find themselves weaned out of the general advertising marketplace.

After a nationwide ban on outdoor billboards for smoking-related products took effect last month and as the firms face growing resistance from newspapers and magazines, they are left with little choice.

Steve Kottack, a spokesman for Brown and Williamson, said the company will expand its direct mail and will place its toll-free number on all packages so consumers can contact the company with questions. Kottack said the company will focus on “building a database of consumers [it] can communicate with.”

Brendan McCormick, a spokesman for Philip Morris, told DM News that direct mail will definitely be increased for their products.

“Direct mail is one of the options open for us, including direct marketing through event sponsorship.”

McCormick would not disclose the amount of money going into current direct mail campaigns, but according to a direct marketing specialist in New York, many of the pieces of direct mail that tobacco companies are beginning to mail cost more than $1 each and maybe as high as $2 for packages with tipped-on coupons and multiple insertions.

Both companies are sending out their mailings this month, but neither would reveal specifics of their campaigns.

According to Priya Narang, senior vice president and media director at Dewitt Media, New York, it's difficult for the companies. “Building awareness and growing a market by trying to reach out to a young audience through direct mail alone is very hard,” she said.

The move toward direct mail comes at a time when general advertising is closing its doors. Last week the New York Times joined a growing list of major publications and announced it will no longer accept tobacco advertising as of May 1.

Some analysts suggest that the Times' announcement could only mean one thing: Most other newspaper publishers will follow suit, ultimately leaving tobacco companies with only glossy magazines to turn to as their key venue for marketplace messaging.

And some analysts say that increased tobacco advertising in magazines will likely be short term. Many publishers are now facing increased scrutiny by anti-smoking activists who are already taking a hard look at circulation audit reports for indications of young adult readers. And even though magazine publishers are not legally required to refuse tobacco advertising, the eventual erosion of that venue, as any astute direct marketing analyst knows, leaves only one logical alternative: direct mail.

But Martin Feldman, a tobacco analyst at Salomon Smith Barney, New York, said in published reports that he believed the decision by the New York Times to ban cigarette advertising would have no effect on the rest of the industry. “I don't see cigarette advertising in newspapers particularly meaningful anyhow,” he said.

“But the tobacco companies will go there because they have too few options,” Narang said.

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