E-Cigarette Sellers Break Out Big Tobacco's Old Playbook Aug 4th 2013, 22:23
Filed under: Advertising & Marketing, Tobacco
By MICHAEL FELBERBAUM
RICHMOND, Va. — Companies vying for a stake in the fast-growing electronic cigarette business are reviving the decades-old marketing tactics the tobacco industry used to hook generations of Americans on regular smokes.
They’re using cab-top and bus stop displays, sponsoring race cars and events, and encouraging smokers to “rise from the ashes” and take back their freedom in slick TV commercials featuring celebrities like TV personality Jenny McCarthy.
The Food and Drug Administration plans to set marketing and product regulations for electronic cigarettes in the near future. But for now, almost anything goes.
“Right now it’s the wild, wild west,” Mitch Zeller, director of the FDA’s Center for Tobacco Products, said in a recent interview with The Associated Press.
Electronic cigarettes are battery-powered devices made of plastic or metal that heat a liquid nicotine solution, creating vapor that users inhale. Users get their nicotine without the thousands of chemicals, tar or odor of regular cigarettes. And they get to hold something shaped like a cigarette, while puffing and exhaling something that looks like smoke.
So far, there’s not much scientific evidence showing e-cigarettes help smokers quit or smoke less, and it’s unclear how safe they are. But the marketing tactics are raising worries that the devices’ makers could tempt young people to take up something that could prove addictive.
The industry started by selling e-cigarettes on the Internet and at shopping-mall kiosks. It has rocketed from thousands of users in 2006 to several million worldwide who have more than 200 brands to choose from. Some e-cigarettes are stocked in prime selling space at the front of convenience-store and gas-station counters — real estate forbidden to the devices’ old-fashioned cousins.
Analysts estimate sales of e-cigarettes could reach $ 2 billion by the end of the year. Some say the use of e-cigarettes could pass that of traditional cigarettes in the next decade. Tobacco company executives have even noted that e-cigarettes are already eating into traditional cigarette sales.
The debate over marketing tactics is intensifying as the nation’s largest tobacco companies roll out their own e-cigarettes in a push to diversify beyond their traditional business. People are smoking fewer cigarettes in the face of tax hikes, smoking bans, health concerns and social stigma, though higher prices have helped protect cigarette revenue.
Companies like NJOY and Blu Ecigs are advertising on TV, forbidden for cigarettes for more than 40 years. LOGIC has placed mobile billboards on taxis in New York City. Swisher International Inc., maker of Swisher Sweets cigars, is sponsoring race cars promoting its e-Swisher electronic cigarettes and cigars and has a two-year deal to become the official e-cigarette of the World Series of Poker.
Blu, which was acquired by No. 3 U.S. tobacco company Lorillard (LO) last year, also has sponsored an Indy car and the 2013 Bonnaroo music festival, and its website features a cartoon character nicknamed “Mr. Cool” boasting the benefits of its e-cigarette – evoking the days of Joe Camel.
Decades ago, celebrities like actor Spencer Tracy, baseball player Joe DiMaggio and even future President Ronald Reagan shilled for brands like Lucky Strike and Chesterfield.
Now, NJOY features rocker Courtney Love in an expletive-laced online ad and counts singer Bruno Mars among its investors. Actor Stephen Dorff is featured in Blu’s TV commercials.
In Blu’s latest campaign, McCarthy, who was recently named a host on the talk show “The View,” says she can use the e-cigarette “without scaring that special someone away” and can avoid kisses that “taste like an ashtray” when she’s out at her favorite club. The commercials are set to start airing nationwide next week.
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Tobacco marketing has been increasingly restricted. TV commercials for cigarettes were banned in 1970. Later legal settlements and new regulations took ads off billboards and banned event sponsorships. Cigarette marketing can’t use celebrities or cartoons. While they must include health warnings, companies can still advertise cigarettes and smokeless tobacco in magazines that don’t have a large youth readership.
The electronic cigarette ads push the same themes as old cigarette ads: sophistication, freedom, equality and individualism, said Timothy de Waal Malefyt, a visiting associate professor at Fordham University’s business school and former advertising executive.
That’s the problem, tobacco opponents say.
“The ads, themes and messages are precisely the same [as those] used by the tobacco industry for decades that made those products so appealing to young people,” said Matt Myers, president of the Campaign for Tobacco-Free Kids. “For an industry that wants to project itself as helping to solve the tobacco problem, they’re behaving just like the tobacco industry in its worst days.”
Reynolds American (RAI), owner of the nation’s No. 2 tobacco company, has said it plans to use TV ads to promote a revamped version of its Vuse brand electronic cigarette that it launched last month. Altria Group (MO), owner of the nation’s biggest cigarette maker, Philip Morris USA, has declined to detail its marketing strategy for its first electronic cigarette under the MarkTen brand set to launch this month.
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The makers of e-cigarettes defend their strategy.
“It’s huge for us in that it allows us to continue a conversation we’ve been having with consumers for over four years,” said Jason Healy, the founder and former president of Blu and now a brand spokesman. “There’s the potential here that e-cigs could do a tremendous amount of good, more good than anything anyone has done on the anti-smoking side since anti-smoking was invented.”
Healy said that as long as the marketing remains responsible, it should continue. But he said, “there’s always going to be idiots that want to push that boundary.”
There are a few limitations on marketing. Companies can’t tout e-cigarettes as stop-smoking aids, unless they want to be regulated by the FDA under stricter rules for drug-delivery devices. But many are sold as “cigarette alternatives.”
Many companies restrict sales to minors but only a couple of dozen states have laws banning it. And while some are limiting offerings to tobacco and menthol flavors, others are selling candy-like flavors like cherry and strawberry – barred for use in regular cigarettes because of the worry that the flavors are used to appeal to children.
One of the toughest issues the FDA may eventually have to deal with is whether lightly regulating electronic cigarettes might actually be better for public health overall, if smokers switch and e-cigarettes really are safer.
If that’s true, it “sure looks like the good would far outweigh the bad,” Zeller said. “But we need the evidence to know how this is going to play out.”
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