Omnicom cuts ties with embattled e-cigarette maker Juul
Omnicom Group has ended its relationship with embattled e-cigarette maker Juul Labs, according to a person with direct knowledge of the matter. The move comes amid a growing backlash over vaping, which has been blamed for a mysterious lung injury causing hundreds of cases of illness and 12 deaths.
Omnicom representatives declined comment. Juul did not immediately respond to a request for comment.
Juul on Wednesday announced it would suspend all broadcast, print and digital advertising in the U.S. and also refrain from lobbying the Trump administration over its proposed vaping restrictions, which includes a ban on flavored e-cigarettes. Juul also announced former Altria Group executive K.C. Crosthwaite as its new CEO, replacing Kevin Burns.
Omnicom’s DDB began working for Juul about a year ago, with media buying handled by Omnicom Media Group, according to people familiar with the matter. Questionable influencer marketing practices that have been cited by congressional investigators occurred before DDB came on board, they said.
DDB’s work began airing around December and includes testimonials from Juul users. Juul last ran TV ads on Sept. 26, according to ad-tracking service iSpot. One ad includes a woman who self-identifies as a former pack-a-day smoker who expresses relief about no longer smelling like smoke.
Juul is facing intense scrutiny amid a growing public health crisis related to vaping. The Centers for Disease Control and Prevention on Friday reported 805 cases of lung injuries related to vaping across 46 states, including 12 deaths. The CDC notes that “no single product or substance has been linked to all lung injury cases.”
But once high-flying Juul has taken the brunt of the negative publicity surrounding the epidemic, with regulators targeting the company for its marketing practices. The U.S. Food and Drug Administration in early September sent Juul a warning letter alleging that it was improperly marketing its products as less risky than traditional tobacco products without gaining the necessary approvals to do so.
At the same time, the Federal Trade Commission has opened an investigation into Juul over potential deceptive marketing, including using influencers to target minors, according to a report in late August by the Wall Street Journal. In a statement to Ad Age in August, Juul said it had “never marketed to youth.”
But the company expressed regret at the time that its first marketing campaign in 2015, while targeted to 25-to 34-year-olds, “was executed in a way that was perceived as appealing to minors.” The social media campaign, called “Vaporized” was created by an internal team and two ad firms, Brooklyn-based Grit Creative Group and Canadian-based firm Cult Collective.
Grit’s 2015 work included identifying 280 influencers in New York and Los Angeles to “seed Juul product” over three months, according to documents released in July by a subcommittee of the House of Representatives Committee on Oversight and Reform as part of an investigation into the youth e-cigarette epidemic. Grit’s contract called for it to collect $10,000 in fees, according to the scope of work document released by the subcommittee.
Grit in a statement to Ad Age on Friday said: "When Grit was hired byJuul to assist in its launch, our mandate in any marketing efforts was to engage with 'existing smokers only' and only individuals 24 years of age and older.