Tobacco Giant Puts the Kibosh on Magazine Ads

Philip Morris has not bought a magazine ad in 2002. The cigarette industry’s dominant player says it’s cutting back significantly for the rest of the year in what could be a last call for its paid media advertising. Even though tobacco’s print ad expenditures are tiny, compared to the $6.6 billion spent on retail incentives
like promotional allowances in 1999 (the most recent figures available from the Federal Trade Commission), Philip Morris’ pullback is hardly good news for magazine publishers suffering through a stagnant ad economy. Philip Morris accounted for $114.7 million of the $267 million the tobacco industry spent on magazine advertising in 2001.

Moderator Comment: How can retailers (especially convenience outlets) offset the loss of cigarette sales?

Publishers, like retailers, need to find ways to generate revenue in addition to cigarettes. [George
Anderson – Moderator]