Cigarette Marketing Increases as Tobacco Use Declines

WASHINGTON, D.C. -- Cigarette volumes have been declining for several years, but that has not stopped tobacco companies from opening their wallets for advertising and promotion dollars.

According to the Federal Trade Commission (FTC), the largest cigarette companies spent $8.37 billion in 2011 on advertising and promotions compared to $8.05 billion in 2010. The increase mainly came from an uptick in spending on price discounts, or discounts paid to cigarette retailers and wholesalers in order to reduce the price of cigarettes to consumers. Specifically, spending on price discounts increased from $6.49 billion in 2010 to $7 billion in 2011.

Price discounts was the largest spending category in 2011, as it has been each year since 2002.

Meanwhile, the number of cigarettes sold to wholesalers and retailers in the United States declined from 281.6 billion in 2010 to 273.6 billion in 2011.

Tobacco companies have also ramped up advertising and promotion spending on smokeless tobacco products -- from $444.2 million in 2010 to $451.7 million in 2011. Similar to cigarette marketing, price discounts make up the largest spending category for smokeless -- accounting for $168.8 million.

However, unlike cigarettes, the sale of smokeless tobacco products is on an upswing. The dollar value of sales by these manufacturers rose from $2.78 billion in 2010 to $2.94 billion in 2011. The weight of smokeless tobacco sold rose from 120.5 million pounds in 2010 to 122.7 million pounds in 2011, according to the FTC.

The data comes from the commission's latest tobacco reports, "The Federal Trade Commission Cigarettes Report for 2011" and "The Federal Trade Commission Smokeless Tobacco Report for 2011." The FTC has issued the cigarettes report periodically since 1967 and the smokeless tobacco report periodically since 1987.