FTC: TOBACCO AD SPENDING UP, DESPITE CURBS ON MARKETING

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The Federal Trade Commission reported March 13 that in the wake of the agreement tobacco makers signed with states attorneys general in 1999 imposing new curbs on marketing, tobacco companies still spent 22.3% more on advertising and promotion than in 1998.

The bulk of the increased spending went for slotting fees and value-added promotions. The FTC said tobacco makers spent $8.24 billion in 1999, the latest year for which figures are available, with $3.54 billion or 43% of their spending going toward slotting fees, up from $2.88 billion in 1998. Retail value-added promotions, which can include three-packs-for-the-price-of-two packaging, increased to $2.56 billion from $1.56 billion.

While the pact forced tobacco companies to discontinue using billboards to market cigarettes, tobacco makers increased their advertising in magazines and newspapers. Newspaper spending in 1999 grew to $51.0 million from $29.4 million the previous year, while magazine spending grew to $377.4 million from $281.2 million.

Copyright March 2001, Crain Communications Inc.

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