Spending on Traditional Advertising Continues Decline

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WASHINGTON ( -- The tobacco industry continues to spend less on traditional advertising but more in other promotional activities, according to a new report issued by the Federal Trade Commission.

Based on 2002 figures, the annual report said cigarette marketers spent a total of $12.47 billion on advertising and promotion in 2002, an overall 11% increase.

Traditional advertising spending dropped dramatically, from $212.8 million in 2001 to $156.6 million in 2002, a 60% decline.

Youth prevention ads
Tobacco makers also reported an additional $74.2 million spent for anti-tobacco ads intended to reduce youth smoking, down slightly from the $79.4 million spent in 2001.

Meanwhile, overall spending for promotional activities rose to $9.66 billion, from $4.45 billion in 2001.

The FTC added some new categories in its latest report, saying tobacco makers spent $219 million for adult-only entertainment, reflecting sponsorship of concerts, bars or other events at locations where only adults are usually found. Another $34.1 million was spent to reach a more general audience. The FTC report also said companies spent $109.7 million on sports and sporting events, a 0.8 % decrease from 2001.

Promotional giveaways
Value-added promotions, such as "buy one, get one free" offers, or promotional giveaways represented spending of $1.32 billion, down from $4.76 billion. Part of the decrease may represent some clarifications by the FTC as to which category tobacco makers are to report those results, not actual spending decreases.

The FTC also includes the value of discounts or giveaways as part of its promotion numbers. It said discounts represented $7.87 billion or 63.2% of the total. The FTC's report last year didn't break out discounts.

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