The second coming of tobacco marketing is pouring millions into adland, a new report confirms. Last year, the largest e-cigarette makers spent nearly $60 million combined on advertising and promotion, with marketing budgets at some e-cigarette companies growing by more than 100 percent year over year, according to a report released in April by American Senator Dick Durbin.
Lawmakers are concerned that e-cigarette companies’ marketing strategies are targeting young people, a tactic from Big Tobacco’s old playbook that anti-smoking advocates spent years trying to stop. The report from Senator Durbin, who was joined by a consortium of other democratic members of Congress, urges the American Food and Drug Administration to “promptly” issue regulations around the booming e-cig industry. It also calls upon e-cig makers to refrain from certain kinds of marketing, including radio and TV ads.
E-cigarette revenue in the US has doubled every year since 2010, the report adds, with sales expected to hit $2 billion in 2013. However, the industry is currently unregulated, allowing manufacturers to advertise their products in any way they see fit, including on TV, where a four-decade federal ban has prohibited cigarette ads.
The new report surveyed eight of America’s largest e-cigarette companies. Six provided marketing data, which showed that they spent a combined $59.3 million on marketing and promotions in 2013. Five companies increased their ad spending by 164 percent in 2013, when compared with 2012. One company boosted its marketing budget by 300 percent, while another grew its ad spending by 352 percent, according to the report. E-cig makers are “using a broad range of marketing techniques employed by traditional cigarette companies to entice young people to use their products,” the report claims.
Marketing techniques include not only TV, radio and print promotions, but also social media tactics, celebrity endorsements and events, arenas where large numbers of young people can be exposed, even if they aren’t the primary aim. Lorillard’s Blu E-cigs use product placements in movies, the report reveals. “E-cigarette companies are taking advantage of the regulatory vacuum that exists to market their products to the youth,” it notes.
E-cigarettes are not intended for children, says Phil Daman, president at Smoke Free Alternatives Trade Association (SFATA), a trade group that represents the e-cig industry. “We encourage responsible marketing directed to those above the age of 18 years,” he says in a statement. “SFATA does not support and our industry does not use youth-oriented product marketing.”
Meanwhile, a Reynolds American spokesman says in an email that the nation’s second-largest tobacco firm supports prohibiting youth access to e-cigarettes. A spokesman for Altria Group, the largest tobacco company in the US and maker of Nu Mark e-cigarettes, says in an email that the it supports “appropriate marketing regulations that allow e-vapor companies to communicate to adult vapors, respect adult consumer choice, while, at the same time, reducing the exposure of e-vapor marketing activities to unintended audiences”.
Companies included in the survey were Altria, R.J. Reynolds Vapor Company, NJoy, Logic, VMR, Lorillard and Green Smoke. One company, Lead by Sales, maker of White Cloud e-cigs, did not respond to the survey questions. Two companies, Altria and Green Smoke, which Altria bought during the survey process, did not provide complete responses, according to Senator Durbin’s office. The report does not break out spending by company, because the eight surveyed companies were promised confidentiality, a spokeswoman for Senator Durbin says.