Smoke alarm

The proposed total ban on tobacco advertising is good news for the field marketing industry. If companies are forced to drop outdoor ads, it will fuel in-store promotions.

Government health warnings are no longer regarded as enough to protect consumers against smoking: legislation is poised to ban all tobacco advertising. The European directive on the advertising and sponsorship of tobacco products will outlaw the overt promotion of tobacco products by 2006. However, the British tobacco industry is playing for time by joining Germany in a challenge to the European court. Until it is settled at European level, the legislation will not be enforced locally.

As moves continue worldwide to limit options for making tobacco products look attractive, the industry has had to reconsider its methods of keeping people addicted. In mid-January, the Canadian government added to its own tight legislation by insisting tobacco companies decorate their packs with disturbing images of diseased organs.

This is not an isolated case, says Bob Mizen, managing director of Frontline Display International, which works with tobacco companies internationally. The new hard-line anti-advertising approach is biting hard in Europe too, with Poland submitting to an ad ban effective from the beginning of this year. Mizen expects a marked increase in in-store promotional activities in response.

“The ban will take out all outdoor advertising – posters, shop fascias and anything external. The only option that will be left open to them is in-store advertising, but only as part of a merchandising unit. Alongside that restriction, 20 per cent of unit advertising space will be given over to a government health warning. It will not be possible to show aspirational images; it will simply boil down to showing pack images.”

A spokesperson for British American Tobacco Investments says that much depends on the outcome of the challenge which it, along with UK tobacco manufacturers Gallaher, Imperial and Rothmans (UK) are taking to the European court with Germany and other parties.

The spokesperson says: “I don’t think it’s a good time to be saying anything provocative in the UK. Let’s wait for the outcome of the challenge. The proposed UK ban amounts to implementing regulations in advance of the European decision. Since we are still challenging it in Europe, it’s best if we don’t say anything. We’d like to talk about our opinion on tobacco ad bans, but we’d like to wait until we can be a little more bullish.”

Some field marketers believe the impending clampdown on advertising will open up massive new areas of work for them, as manufacturers assess the few channels of branding left open. As advertising disappears, tobacco companies are likely to step up field marketing activities to enhance in-store positioning.

Gallaher is already acting on this by using CPM as well as an in-house force to add weight to its field marketing activity. A Gallaher spokesperson says the field marketing role has always been important, but is unwilling to be drawn on the extent to which its role will change.

“We have a sales force of 200-plus in the UK, backed by CPM, which works closely with us. At the moment we can still advertise in all media that were available to us before. Once the law kicks in, there are some things that we won’t be able to do in terms of point-of-sale display, but that’s all got to be resolved by the court.”

Lack of initiative

Headcount Field Marketing sales and marketing director Richard Finch thinks an ad ban will resolve what he sees as a lack of initiative in tobacco field marketing.

“Tobacco companies are not using field marketing to the same extent as other category counterparts operating in the same sector, such as soft drinks and confectionery. While there is some coverage of tobacco by field marketing companies, it’s certainly not to the same extent, probably because tobacco, historically, has sold itself. At the same time cigarettes represent low margins from a retailer’s perspective,” says Finch.

Finch believes that tobacco manufacturers will need to revisit how they target certain sectors, and enhance their market presence.

“Field marketing companies can help considerably, targeting key outlets with high throughput. It will be more important to ensure the brand is given the maximum number of facings, so it stands out from competitors. There is likely to be a greater move towards display units for cigarettes. Inside the shop, stands will come under scrutiny with companies trying to leverage their own products in place. We’ll see major field marketing activity around enhancing or replacing displays.

Anti-advertising pitfalls

Frontline Display International marketing director Barry Jobling says tobacco display units will become the last bastion of permissible brand building for the industry. He has had experience of the complexities involved in complying with anti-advertising law in other countries and warns there are many pitfalls.

“Everybody has been aware for years that tobacco advertising would eventually be banned. Manufacturers have already developed ways of displaying and merchandising which take that into account. In ‘dark markets’ where you cannot advertise, it’s illegal even to use a brand name; you have to use graphics. We did some work for Benson & Hedges in Jersey where, if you can see the merchandising unit from the exterior of the store through the window, it cannot contain the name Benson & Hedges,” says Jobling.

UK merchandising units are supplied by individual cigarette companies, which can reserve the best position for their brand. Jobling believes that products may be benchmarked against each other (according to strong, medium or low-tar) to put the blocks on competition. He says, however: “They will still have to have merchandisers, and that’s the key. You have to merchandise the product, even though you can’t advertise it.”

Ellert Retail managing director Rob Ellert says with the savings made from not being able to advertise, considerable sums will become available to invest on the ground. In his view, enhanced field marketing activities represent a logical re-allocation of this cash, but he says take-up is surprisingly slow at this point.

“The money that these companies can no longer safely spend on advertising or sponsorship could be poured into point of sale. You’d have thought that instead of spending £10m above the line, they could just spend £2m or £3m below the line and they would dominate. But I don’t see any great evidence of it,” he says.

Policing the ad ban when it comes into place is likely to be complicated, says Ellert.

“It’s great in theory, but implementation is going to be a lot more difficult and the industry is going to be reliant on some voluntary code of conduct. I think that it is very blurred.”

Greater restrictions

Frontline Display’s Mizen believes that tobacco companies understand the need for some degree of self-regulation.

“They know if they don’t do it themselves they are likely to be slapped with an even more severe restriction, if that’s possible. So presumably they will settle for what they’ve got, which is short of a total ban.”

Mizen says developments elsewhere in Europe have much to teach UK tobacco companies.

“From what we have seen in Poland and Holland, the amount of advertising space allowed in store will be in direct proportion to a company’s percentage of sales within the market overall. There is a correlation between market share and how much space you can take in store for your display.”

PMI Marketing managing director James Moyies says as the age of advertising restriction draws closer, some tobacco companies are interested in field marketing for purposes other than gaining favourable product placement.

He says, “At the moment a lot of companies are using field marketing to build databases to find out who their smokers are. Options for brand building are soon going to be limited, and whatever they do is going to be challenged. Unless they are careful in ensuring that what they do only influences current smokers, the anti-smoking lobby is not going to stop. If companies try to be too clever, it will encourage more legislation.

“Tobacco companies will have to use field marketing to target the retailers and influence them as much as they can through display and distribution in store. Anything that targets the consumer, unless it is clearly targeted at current loyal smokers of the brand, could fall foul of legislation.”

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here