Two years not enough to undo industry’s 5-decade-old pr(part1 and 2)/ Newsbreak | 07/07/2009 8:28 PM


Cigarette companies skirt advertising ban

Part 1

Two years after the advertising ban on tobacco products was first implemented in the Philippines, its effects have yet to make considerable impact on the sales of cigarettes, indicating a long road ahead for the campaign to reduce the consumption of these products.
Financial reports of tobacco companies here showed that along with the decrease in advertising spending during the first year of the ban, cigarette sales also went down, but not much.
It will be too much to expect the ban to instantly make a dent on cigarette sales, say advertising specialists that Newsbreak spoke to, because the tobacco industry has saturated the mass media with their propaganda for the last 50 years.


Despite strong opposition from tobacco companies and their allies in Congress, the Philippines on June 23, 2003, enacted a law banning all forms of tobacco advertising. Republic Act 9211, the Tobacco Regulation Act of 2003, regulates the packaging, use, sale, distribution, and advertisements of tobacco products.
Beginning 2007, tobacco products can no longer be advertised in television, cable, radio, cinemas, and billboards. In July 2008, the advertising ban expanded to all forms of mass media—including newspapers and magazines—except “inside premises of point-of-sale retail establishments.”
The bill’s passage was said to be short of a “miracle,” according to Valenzuela Rep. Magtanggol Gunigundo, the proponent of the House version of the bill. “It took me two Congresses to realize RA 9211. I’m so happy. We were able to impose total advertising ban.”
Other anti-tobacco bills—notably the graphic health warning bill—are hitting snags in Congress.
Changing TV

The tobacco ad ban changed Philippine television. Viewers got a break from the images of celebrities and models sticking out cigarettes in between their fingers.
The Marlboro man, the cowboy, had always been the most recalled advertisement. It was the most unique, too. The other cigarette advertisements were all very similar. The ads notably featured top of the line cars, often speeding on racetracks or down the mountain. The car stops and shows the model pulling out a cigarette. On the passenger seat is a pretty and sexy woman shown to be impressed with the model.
“It was all image. It was aspirational. What else is there to do?” said an advertiser who was previously involved in creating ads for a foreign cigarette brand. With the influence of the Western culture, the tobacco company he worked for also had a policy of showing American models—never locals.
Before the ad ban, cigarette ads—along with hair products and mobile phones—dominated the commercial breaks.
In 2006, or the last year that tobacco advertisements were allowed in television and radio, the big players Fortune Tobacco Corporation, Philip Morris Philippines, and British American Tobacco spent P623 million, P677 million, and P70 million, respectively, in advertising and promotions.
Reduced consumption

The tobacco ad ban was aimed to “promote a healthful environment and protect the citizens from the hazards of tobacco smoke.”
Since above-the-line advertising—television, radio, and print—is the most effective tool to promote a product in the Philippines, anti-tobacco advocates believe that if you cut the exposure of consumers to these tobacco ads, consumption would decline.
“The advertising ban saves the youth from getting the idea that smoking is glamorous. All these ads are targeting the youth, when they are still in the exploration stage in their lives and they try all sorts of activities like smoking,” Gunigundo said.
According to records at the Securities and Exchange Commission (SEC), the country’s biggest tobacco player—Lucio Tan’s Fortune Tobacco Corporation—posted a decline in sales in the first year of tobacco ad ban. From P30 billion in 2006, it reported P29 billion in net sales in 2007.
Fortune Tobacco produces variants of cigarette brands Hope, Winston, Mark, Camel, More, Champion, and Fortune. It has licensing agreement with RJ Reynolds. The same financial statement Fortune Tobacco submitted to the SEC show that the company spent P259 million for advertising in 2007. It was down from P624 million in 2006 when there was no advertising ban.
Another tobacco player, La Suerte Cigar and Cigarette Factory, also reported a decline in sales. It reported P800 million in net sales in 2006 when it spent P13 million in advertising expenses. With the tobacco ad ban in 2007, La Suerte spent P2 million in advertising. Its net sales was down to P634 million.
Poor Economy

However, the ad ban may not be the only factor in the decline of cigarette sales.
“I’m sure the ad ban helped in reducing consumption, but it’s hard to tell by how much. The bigger factor is the economy,” said a tobacco industry observer.
“The lower sales cannot be attributed to the ad ban because of the complicated situation of the economy right now,” Gunigundo agreed.
British American Tobacco Philippine Limited (BAT) tells a different story. In spite of the ad ban, the distributor of Dunhill, Kent, Lucky Strike, and Pall Mall posted an increase in sales.
In the first year of the advertising ban, its advertising expenses was down to P9 million compared to P70 million in 2006. However, its sales increased from P90 million in 2006 to P95 million in 2007.
The difference lies in the demographics of the consumers, explained the industry observer.
Fortune Tobacco and La Suerte distribute “low-end” cigarette brands that cater to poor smokers.
Historically, tobacco products have been resilient to bad economy. This is among the reasons why the Department of Finance is proposing to impose higher taxes on the industry.
“If you’re poor and you are a smoker, you are probably smoking Hope. Instead of your usual five sticks a day, you just smoke three sticks,” the industry observer explained. Thus, the decrease in the sales of low-end brands.
On the other hand, the “can-afford” consumers of BAT products wouldn’t have problems maintaining the habit.
Not Overnight

But it’s not to say that the tobacco advertising ban has no impact.
“The ad ban is the first step to a long process. There is a long history of tobacco advertising. It has built an image that communicates, among others, freedom and independence. You cannot undo that overnight,” said another advertiser previously involved in creating tobacco advertisements for another international brand.
“The tobacco ad ban helps in reducing the glamour associated with smoking,” said Ana Leah Sarabia, executive director of Women’s Media Circle, a group working with anti-tobacco advocates to protect the welfare of women.
But it’s not only advertisements that created the image of smoking being glamorous and indicating a status of success in life.
“Don’t just focus on advertising. It’s the fault of media in general. It’s the fault of Hollywood. It’s a long time ago. Smoking has been portrayed to be cool since the 1950s,” said the advertiser.
The propaganda started as early as the fifties. There were Marlboro men that young boys looked up to. Girls had famous celebrities like Audrey Hepburn posing in photos with a cigarette stick.
Cigarettes are among the most marketed product in the world. Global promotion of tobacco products is estimated to be in tens of billions of US dollars.
In these activities, the dangers of smoking were conveniently glossed over.
A lot of efforts then will be needed to counter the tobacco industry’s long history of propaganda, say the advertisers we interviewed.
“The tobacco ad ban needs to be supported by other efforts. While there is a ban, there should also be efforts to communicate the flip side of smoking,” one of them said.
Here lies the difficulty. The anti-tobacco advocates should have pockets as deep as the tobacco companies’.
In 1992, Health Secretary Juan Flavier introduced the Yosi Kadiri (Smoke is Disgusting) campaign. The campaign sought to decrease smoking among children, and attempted to counter the handsome cowboy and sporting images of smokers promoted in tobacco advertising. The campaign mascot, Yosi Kadiri, appeared in the media with movie and television personalities. The campaign was considered quite successful, although government funding rapidly was depleted.
“It was a great campaign, but it was not sustained,” said the advertiser.


2nd of 2 parts 

They engage in subtle but more effective promotional activities

Now prohibited from advertising their products in the so-called “paid media”—television, radio, and newspapers—tobacco companies have found ways to defeat the ban through subtle but potentially more effective promotional activities.

Their activities range from donating to community projects to influencing the content of movies or shows to being the subject of positive news reports.

Advertising specialists told Newsbreak that these new approaches taken by tobacco companies may be “more expensive,” but they sure “built relationships” with consumers and can therefore help maintain, if not expand, the tobacco market.

The Tobacco Regulation Act of 2003 stopped the elaborate marketing strategy of tobacco companies in the “paid media.” Anti-tobacco advocates have reported violations of the ad ban in province-based television and radio stations, but noted that the national media have generally heeded the law.

The law, however, has been unable to prevent the invasion of “free media”—the very content of news and entertainment media—by tobacco products and brands.

Under the Radar

“In the first place, in promoting their cigarettes, tobacco companies never really limited themselves to media advertising,” said an advertiser who used to be involved in creating ads for an international cigarette brand.

Another advertiser warned that, outside the broadcast and print media, tobacco companies engage in skillfully planned promotional activities that could even be stronger in pulling consumers.

“We were even joking that cigarette companies may have invented below-the-line advertising,” the advertiser said.

“Below-the-line” advertising refers to any form of promotions outside television, radio, and print media (the so-called “above-the-line” advertising).

“Cigarette advertising is so advanced. Unlike above-the-line, they are under the radar and are hard to monitor,” the advertiser said. “TV, radio, and print are one-way—I tell you, you decide. Below-the-line advertising is interactive. It’s stronger because it builds relationships. There is feedback. But it’s more expensive. The cost-per-person is higher.”

Invading Movies

For decades, tobacco companies have paid hefty sums to promote their products in the movies. Hollywood has played a big role in portraying cigarette smoking as glamorous.

Philip Morris appeared in at least two James Bond movies—A Licencse to Kill in 1989 and Die Another Day in 2002. The company reportedly paid US$350,000 the first time.

Philippine movies adopted the same strategy. The country’s biggest tobacco player, Fortune Tobacco, once appointed actor and sportsman Richard Gomez as its spokesman. Bowler Paeng Nepomuceno also endorsed cigarette brand Champion, obviously to rub his athletic prowess onto the brand.

However, the Tobacco Regulation Act has since banned tobacco companies from hiring celebrities to endorse their products.

To get around this, tobacco companies try to influence the content of films, said Anna Leah Sarabia of the Women’s Media Circle, which is helping in the anti-tobacco advocacy in the Philippines.

Tobacco companies, without necessarily asking for direct endorsement of their particular brands, offer to help independent filmmakers produce their movies in exchange for showing their cigarettes in any of the scenes, no matter how briefly, Sarabia explained.

Since “it’s hard [to find] sponsors now, many filmmakers can be easily influenced. They might not see anything wrong with it,” Sarabia said.

She said these forms of “soft advertising” should also be banned. “We don’t need another law. It’s just another interpretation of the Tobacco Regulation Act,” she said.

CSR in the News

Tobacco companies have also maintained their presence in newspapers, particularly through their Corporate Social Responsibility (CSR) activities.

CSR activities of Fortune Tobacco made it in the news last year, for example. Major newspapers and at least one television network featured stories on the efforts of Lucio Tan, Fortune Tobacco owner, to help the tobacco farmers in the Ilocos region, where the bulk of his raw materials come from.

He spent P4 million to rehabilitate the Silag-Pacang diversion dam to help the farmers irrigate the tobacco fields.

But among tobacco companies, Philip Morris is appears to be the most generous. It is known for its donations to local government units, charities, and government agencies, most, if not all, of which are reported in newspapers.

Last year, anti-tobacco advocates were alarmed by a photo of Philip Morris Philippines Manufacturing Inc. managing director Chris Nelson with Philippine National Red Cross chairman Senator Richard Gordon published in newspapers.

Newspapers ran a story on Philip Morris’s P2-million donation to Red Cross, which was given on Gordon’s 63rd birthday in August 2008.

Problems in Monitoring

The tobacco ad ban covers below-the-line promotional and sponsorship activities, but the government doesn’t seem to have enough capabilities and resources to monitor violations of this ban.

“Promotion” is defined as any activity organized by tobacco companies or any display of tobacco products or manufacturer’s name, trademark, or logo. “Sponsorship,” on the other hand, is defined as any contribution to a third party in relation to any event with the aim of promoting a brand of tobacco product.

Promotions must be directed to persons at least 18 years of age and limited in point of sale. The name, logo, and indicia of cigarette brands may appear in smoking-related promotional materials such as cigarette lighters and ashtrays, but not in other merchandise such as T-shirts caps, sweatshirts, visors, backpacks, sunglasses, writing implements, and umbrellas.

It cannot pay for sports teams to promote the product, or build infrastructure like stadiums under its name. The law also tasks tobacco companies to “take all available measures to prevent third parties from using the company’s brand names and logo.”

Cigarette and tobacco companies are prohibited from sponsoring any sport, concert, cultural, or art event, as well as individual and team athletes, artists, or performers where such sponsorship shall require or involve the advertisement or promotion of any tobacco company or brand. The attribution only to the name of the company in the roster of sponsors shall be allowed.

“Promo girls” are most common in the Philippines. Pretty girls are recruited to distribute cigarettes in parties sponsored by the tobacco companies. This is the lowest level of promotional activity.

“Promotion girls that will continue. They are much hotter now. I think for as long as Hollywood and the glamorous people in entertainment are puffing away we will continue to puff away,” an advertising specialist told Newsbreak.

The Framework Convention on Tobacco Control Alliance of the Philippines (FCAP) laments that TV and radio stations in the provinces still carry cigarette ads, but the most common and frequent violation of the ban is through outdoor advertisings, like billboard or sari-sari store signboards. (“Images: Tobacco ad ban defied—every day”)

Concert Sponsorships

Anti-tobacco advocates are fighting a protracted battle, but there have been successes here and there.

Philip Morris tried in 2008 to sponsor the reunion concert of popular ’90s band Eraserheads, but strong and sustained protests against the activity forced Phillip Morris to bow down and back out.

It was a skillfully prepared activity. Philip Morris did not immediately reveal that they were organizing the concert for its Marlboro brand.

Eraserheads fans got excited when word spread that Eraserheads would reunite. But while the sponsor remained a mystery, searches in the Internet led fans to a certain site—the web site of Marlboro.

It took an anti-tobacco advocate in the United States to uncover the mystery. Campaign for Tobacco-Free Kids (CTFK) president Matthew Myers wrote Philip Morris CEO Louis Camilleri to demand that the company withdraw its sponsorship of the concert.

In his response to Myers, Camilleri confirmed the company’s hand in the concert, but he said the activity was well within the limits of the law.

“The promotional event you refer to is an invitation-only event, not open to the general public. It is restricted to our trade partners and to adult smokers who can obtain an invitation by registering to our adult-only-access Web site, where they must provide proof of age through a government issued ID.

“Invitations cannot be purchased and are not transferable. Controls are in place at entry points to the event to ensure that only persons with invitations are allowed to enter and to verify that they are adults by double checking their government issued ID,” he explained in a letter to Myers.

Philip Morris was eventually pressured to drop the project The Eraserheads reunion concert pushed through and was opened to all paying fans.

CTFK was also instrumental in persuading international R&B star Alicia Keys to demand the withdrawal of Philip Morris’s sponsorship of her concert in Jakarta, Indonesia, that same year.

Lawyer Josefina Buenaseda of FCAP said they have learned of various other instances when tobacco companies sponsored events such as fiestas. Sometimes, these activities entail illegal promotional activities, such as using parasols bearing the tobacco brand, putting up billboards, and distributing prohibited give-away merchandise. (Newsbreak)

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