TOBACCO BURNS UP OUTDOOR; OAAA REPORTS IT AS LEAD CATEGORY FOR FIRST QUARTER, UP 33.3%

By Published on .

It's no smoke. Tobacco is back on top in outdoor spending.

Tobacco marketers spent $31.6 million on outdoor in the first quarter, up a whopping 33.3% to make tobacco the top category and far outpacing overall outdoor spending's 10% gain to $400 million, Outdoor Advertising Association of America figures show. That big gain follows a 20.7% increase for tobacco for all of 1994 to $122 million.

At its peak in 1985, tobacco spending hit $211 million. Since then, outdoor has suffered along with other media as tobacco has come under increasing government and consumer group attack.

Outdoor board companies confirmed they've seen a gain. Executives at Gannett Outdoor Group, New York, reported a 6% rise in first-quarter tobacco spending, while Patrick Media Group, Chicago, said its tobacco revenue shot up 50% in the first quarter. "It's giving us an uplift we didn't anticipate," said Bill Wardell, senior VP-sales and marketing of Patrick.

Curiously, Philip Morris USA denied any significant increase in outdoor spending as did R.J. Reynolds Tobacco Co., which recently began launching unusual semi-permanent Camel outdoor boards in several cities, complete with neon signs.

While Competitive Media Reporting doesn't have as complete outdoor numbers as the OAAA, it reported Philip Morris' total 1994 media budget grew to $241 million from $120 million in 1993.

The outdoor numbers aside, tobacco advertising increases last year seem to be a return to more traditional spending patterns after an unusual 1993 when Philip Morris cut cigarette prices on "Marlboro Friday."

The cut prompted several marketers to replace traditional advertising with promotion or to use some of their ad budgets for price cutting.

Philip Morris' overall media spending increase last year came as it successfully moved to keep No. 1 Marlboro growing. Marlboro's share grew to 28.1% in 1994 and is continuing to grow, said John C. Maxwell Jr., an analyst with Wheat First Butcher Singer, Richmond, Va.

As recently as early 1993, Marlboro's share fell below 20%, according to some estimates.

American Brands Co. upped spending for American Tobacco to $44.1 million in 1994 from $19.9 million, perhaps in anticipation of its eventual $1 billion sale to B.A.T Industries, owner of Brown & Williamson.

The increase in spending comes amid some indications that the more than two decade long decline in tobacco smoking may be lessening.

"The rate of decline has decreased. It may be down as little as 1%" in 1994, Mr. Maxwell said. "Maybe they have gotten all the people who are willing to stop to stop." In 1993 consumption by volume dropped 1.5% and in 1992 it was down 2%, he said.

However, the Tobacco Institute says government figures continue to show regular consumption declines. "It's been going down 2% to 3% a year," a spokesman said. "..... We can just observe what the Centers for Disease Control reports."

While adults who smoke dropped from 42.4% to 25.5% from 1965 to 1990, virtually no change was recorded from 1990 to 1992, according to the CDC.

The institute spokesman calls suggestions that a decline in cigarette smoking has slowed "a reality not demonstrated by government statistics. Tobacco companies are forced to market to a shrinking pie."

The OAAA downplays tobacco's upward drift. "Tobacco is a smaller part of the overall picture than it used to be," said Diane Cimine, chief marketing officer for the OAAA. "A lot of things are converging, causing a fresh, bright future for this industry."

She cited entertainment/amusements, travel/hotels/resorts and automotive as top growth categories.

In this article:
Most Popular