Companies spend huge sums on TV ads, sponsorships to boost e-cigarette sales

By: Stuart Elliott
NEW YORK: Electronic cigarettes may be a creation of the early 21st century, but critics of the devices say manufacturers are increasingly borrowing marketing tactics that are more reminiscent of the heady days of tobacco in the mid-1900s.
With US smokers buying e-cigarettes at a record pace – annual sales are expected to reach $1.7 billion by year’s end – e-cigarette makers are opening their wallets wide, spending growing sums on TV commercials with celebrities, catchy slogans and sports sponsorships.
Those tactics can no longer be used to sell tobacco cigarettes, but are readily available to the ecigarette industry because it is not covered by the laws or regulations that affect the tobacco cigarette industry. The e-cigarette industry is also spending lavishly on marketing methods that are also still available to their tobacco brethren, including promotions, events, sample giveaways and print ads.
The Blu eCigs brand, which recently added actress Jenny McCarthy to its roster of star endorsers, joining actor Stephen Dorff, spent $12.4 million on ads in major media for the first quarter of this year compared with $992,000 in the same period a year ago, according to the Kantar Media unit of WPP. And ad spending in a category that Kantar Media calls smoking materials and accessories, which includes products like pipes and lighters in addition to e-cigarettes, has skyrocketed from $2.7 million in 2010 to $7.2 million in 2011 to $20.8 million in 2012.
In the first quarter of 2013, Kantar Media reported, category ad spending soared again, reaching $15.7 million compared with $2 million in the same period a year ago. In fact, that $15.7 million total exceeded the spending for ads in major media for tobacco cigarettes, at $13.9 million, according to Kantar Media.
“It is beyond troubling that e-cigarettes are using the exact same marketing tactics we saw the tobacco industry use in the 50s, 60s and 70s, which made it so effective for tobacco products to reach youth,” said Matthew L Myers, president of an organization in Washington, the Campaign for Tobacco-Free Kids, that has fought for decades against aiming cigarette ads at minors.
“The real threat,” he added, “is whether, with this marketing, e-cigarette makers will undo 40 years of efforts to deglamorize smoking.” Makers of e-cigarettes counter that their marketing efforts are legal and intended to reach adults – particularly, they say, adults who smoke tobacco cigarettes.
“Our company is being built on branding,” said Elliot B Maisel, chairman and chief executive at the Fin Branding Group in Atlanta, which last month began running TV commercials for its Fin e-cigarette to accompany other initiatives like print and online ads. The company plans to spend more than $8 million this year to take advantage of “the opportunity to build a great American iconic brand,” he added.
Joana Martins, vice-president for marketing at Fin Branding, described the Fin ads as aimed at “adult smokers, 25 to 44, who are tired of being ostracized” and would be receptive to a pitch that “it’s OK to smoke again.” That is reflected in the campaign theme, “Rewrite the rules.”
There is another reason that e-cigarette makers are appropriating the marketing playbook of tobacco cigarettes beyond the proven effectiveness of tactics like advertising on TV and sponsoring race cars: Giant tobacco companies like Lorillard and Reynolds American, which sell traditional smokes like Newport and Camel, are entering the e-cigarette category alongside smaller, entrepreneurial outfits like Fin Branding. Big Tobacco’s arrival is coming through acquisitions (eg Lorillard bought Blu eCigs in 2012) and startups (eg Reynolds American is introducing an e-cigarette named Vuse).
A selling point in a campaign for Vuse that began this week in Colorado is that it is “designed by tobacco experts” to deliver “a perfect puff every time,” said Stephanie Cordisco, president of the RJ Reynolds Vapor division of Reynolds American in Winston-Salem, NC.