FTC Reports Tobacco Marketing Steady, Exceeds $9 Billion – Efforts to Fight Tobacco Use Must Intensify

Statement of Matthew L. Myers, President, Campaign for Tobacco-Free Kids

Mar. 23 2016

WASHINGTON, DC – The Federal Trade Commission’s latest reports on tobacco marketing – showing expenditures of nearly $9.5 billion in 2013 – send another warning sign about our nation’s kids and health. The FTC’s reports are a timely reminder that the tobacco companies are as relentless as ever in marketing their deadly and addictive products, often in ways that entice kids. We must remain vigilant to combat this torrent of industry marketing. We are fortunate to know what policies work – now we have to implement them aggressively.

The $9.5 billion the industry spent to market cigarettes and smokeless tobacco amounts to more than $25 million each day or $1 million every hour. While cigarette marketing expenditures dipped slightly from $9.17 billion in 2012 to $8.95 billion in 2013, marketing spending by the smokeless tobacco industry climbed over 15 percent to $503.2 million, the second highest annual total ever.

While the U.S. has made enormous progress in reducing smoking, tobacco use remains the nation’s No. 1 cause of preventable death. It kills more than 480,000 people and costs the nation about $170 billion in health care bills each year. These deaths and costs are entirely preventable if elected officials fight tobacco use as aggressively as the tobacco companies market their deadly products.

Key findings from the FTC reports issued yesterday include:

  • Smokeless tobacco marketing has more than tripled from $145.5 million spent in 1998 to $503.2 million in 2013. As with cigarettes, price discounts made up the largest category, accounting for 56.2 percent of all smokeless tobacco marketing.
  • The small cigarette marketing decrease was caused primarily by a drop in spending on price discounts (discounts paid to cigarette retailers or wholesalers in order to reduce the price of cigarettes to consumers), which still account for over 85 percent of all cigarette marketing. Spending on price discounts dipped slightly from $7.8 billion in 2012 to $7.6 billion in 2013.
  • Cigarette company spending in magazines grew an eye-opening 81 percent from 2012 to 2013 to over $50 million – likely related to R.J. Reynolds’ return to the medium in 2013 after a 5-year hiatus. The tobacco industry often advertises its products in magazines with large youth readerships.

The huge sums the industry spends on price discounts are especially troubling, making tobacco products more affordable and appealing to price-sensitive kids. The 2012 Surgeon General’s report, Preventing Tobacco Use Among Youth and Young Adults, concluded that “the industry’s extensive use of price-reducing promotions has led to higher rates of tobacco use among young people than would have occurred in the absence of these promotions.”

The FTC reports follow a Centers for Disease Control and Prevention (CDC) report from January that showed alarming levels of youth exposure to electronic cigarette advertising. Based on data from the 2014 National Youth Tobacco Survey, the CDC report found that nearly 7 in 10 middle and high school students – more than 18 million young people altogether – see e-cigarette advertising in stores, online, in newspapers and magazines, or on television and in movies. The FTC reports do not include expenditures for e-cigarette marketing.

To counter the industry’s price strategies, the federal government and the states must increase the price of tobacco products by raising tobacco taxes. The states must significantly increase tobacco taxes, as health advocates have proposed in California, Colorado, Maryland, North Dakota and Pennsylvania – and like Nevada did last year. Congress should approve President Obama’s proposal to increase the federal cigarette tax by 94 cents per pack and similarly increase taxes on other tobacco products.

States and localities should also prohibit tobacco price discounts, as Chicago did just last week and Providence, Rhode Island, and New York City have also done. These discount bans have been upheld by federal courts. The evidence couldn’t be clearer: Increasing the price of tobacco products is one of the most effective ways to reduce smoking and other tobacco use, especially among kids.

The federal government and the states must also fund robust mass media campaigns that counter the tobacco industry’s marketing barrage.

The U.S. Surgeon General has called for running such campaigns “at a high frequency level and exposure for 12 months a year for a decade or more.” The CDC’s media work, along with the Food and Drug Administration’s and Truth Initiative’s campaigns aimed at youth and young adults, are important steps toward meeting this recommendation, but still amount to just a fraction of tobacco marketing expenditures.

The CDC in January launched the latest round of its hard-hitting, proven-effective Tips from Former Smokers (Tips) advertising campaign, providing the sustained commitment needed to win the fight against tobacco. The five-year-old Tips effort has proven highly cost-effective at helping smokers quit and saving lives. The new ads started on January 25 and are running for 20 weeks on television, radio, billboards, online and in magazines and newspapers.

Finally, the states must also do their part by increasing funding for tobacco prevention and cessation programs, including media campaigns. The states this year will collect $25.8 billion in revenue from the 1998 tobacco settlement and tobacco taxes, but will spend less than two percent of it – $468 million – on tobacco prevention programs. That means tobacco companies spend $20 to market tobacco products for every $1 states spend to reduce tobacco use.

As these FTC reports show, the tobacco industry continues to spend billions to promote its deadly and addictive products. We must do our part to protect kids and help make the next generation truly tobacco-free.


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