E-cigarettes: Will tighter ad rules send sector up in smoke?

E-cigarettes may be growing in popularity, but if new regulation is passed, further development in marketing the category could be stalled.


Electronic cigarettes are big business. Having come from relative obscurity in 2008, the market is now worth $2bn (£1.3bn) globally, according to Euromonitor International. As the category picks up pace, so too has its marketing, with the E-Lites brand making history in January by becoming the first e-cigarette to advertise on TV in Europe.

But all that could be about to change when the Medicines and Health Products Regulatory Agency (MHRA) sets out its proposal for the future regulation of e-cigarettes, including whether tighter restrictions on advertising should be imposed.

E-Lites, one of the biggest UK players, has racked up 1.4 million views for its TV ad on You Tube since its launch. Chief executive Adrian Everett says: “Our tone of voice is more fun than you might expect, which is important for us as a brand because smokers are always preached to about quitting.

“We’re not a stop smoking product,” he claims “we’re an alternative”, which is an important distinction for the market.

The ad depicts Waterloo Road actor Mark Benton missing his baby son’s first steps and unexpected Gangnam style dance moves when he leaves the room for a cigarette. The commercial, which was devised by McCann Birmingham together with marketing director Trevor Field, ends with the line ‘What are you missing?’, which Everett says refers to both the events that might be missed by smokers in the short-term as well as the longer-term implications of smoking.

It took more than a year to develop the campaign and meet the strict requirements outlined by governing body Clearcast.

No cigarettes are seen in the ad and there is no reference to smoking. Although the end frame shows the E-Lites logo, there is no sign of the product, packaging or the brand’s strapline ‘smoking reinvented’.

Although Everett agrees with the stringent regulation and understands the responsibilities of governing bodies like the Advertising Standards Authority (ASA) to maintain the integrity of the category, he says it does make it difficult, particularly as the sector is in its infancy.

E-cigarettes are designed to look and feel like real cigarettes, but are battery-powered products containing liquid nicotine, which is inhaled as a vapour. They contain no tobacco and do not burn, thereby reducing the harm caused by tar and other carcinogens.

Careful promotion

Tony Scanlan, chief executive of the Gamucci brand, says: “You have to tread a very careful line when promoting e-cigarettes. We make no claims other than to say it is an alternative. The way that message is portrayed differs but consumers are getting it very quickly.”


The UK is one of the top 5 markets, behind the US, Russia and Germany. Illustrating the rate of growth at E-Lites, Everett says: “We launched in 2009 when essentially there was no category. In our first year we only turned over £100,000, but this year we’re turning over £20m-£30m.” By the end of 2013 sales are set to double again, increasing to £50m-£70m.

Although brands are unable to show their products on TV, there is no such rule for print advertising, according to Andy Whitmore, head of marketing at the VIP brand.

He says: “Our campaign shows a model using the product so there is clearly some disparity between the different media channels, and I daresay some of those issues will become resolved as ourselves and our competitors want to increase the volume and level of advertising over the coming months.”

The MHRA is due to announce the results of its consultation by May 2013. It will ascertain whether all nicotine containing products (NCPs) should be classed within the medicines licensing regime, as with nicotine patches and gums.

If this is the case, all unlicensed NCPs, such as e-cigarettes, would have to apply to the MHRA for medicines marketing authorisation, which has been severely criticised by the industry.

An MHRA spokesperson says: “The response to the Government’s consultation on the regulation of nicotine suggests the vast majority of users of electronic cigarettes use them to quit, to cut down or to reduce the harm from smoking to themselves or those around them. The General Product Safety Regulations are not designed to regulate products that are used as medicines.”

However, the category’s position is clear, according to E-Lites’ Everett: “We as a category and a brand vehemently rebut any accusation that we’re trying to stop people smoking. We are giving them an alternative to carry on. It would be hypocritical to consider us to be a medicine when we’re giving someone something in the full knowledge that they are probably going to continue using it.”

It is a view held by a number of companies, which fear that increased regulation will prohibit growth.

VIP’s Whitmore says: “We don’t promote e-cigarettes as a medical product and therefore we don’t think they should be regulated as such. We certainly don’t say they are a smoking cessation device like a nicotine patch. However, people will obviously use them as an alternative to smoking as they offer the process of inhaling nicotine and all of the things people enjoy about smoking, but with fewer risks.”

Conversely, Amanda Sandford, research manager at anti-smoking group Action on Smoking and Health (ASH), says: “Even though companies can’t advertise e-cigarettes as stop smoking aids, most smokers use them to either cut down or quit. They act in a similar way as nicotine replacement therapies by delivering nicotine in a cleaner, safer form. Therefore, it’s sensible and reasonable that they should be regulated and controlled in the same way.”

However, Sandford does believe that there is a place for e-cigarettes: “We certainly don’t want them to be banned. We think that would be counterproductive. But if they are allowed to be sold, then they should be regulated and the marketing should be controlled to stop any misleading claims or inappropriate advertising.”

As part of the MHRA’s consultation, the British Medical Association (BMA) has called for stricter regulation around the marketing of e-cigarettes.

A spokesperson says: “The BMA believes the marketing, sale and promotion [of e-cigarettes] should be restricted so that it is only targeted at smokers as a way of cutting down and quitting, and does not appeal to non-smokers, in particular children and young people.”

While there is no age limit imposed by law for the sale of e-cigarettes at present, Whitmore points out that as part of the Electronic Cigarette Industry Trade Association’s (ECITA’s) code of conduct, members must clearly state that products are not for sale to under-18s and ensure safeguards are in place to prevent sale to minors.

The e-cigarettes business worldwide is worth £1.3bn and the UK is one of the top 5 markets

He adds: “We’re not in the business of encouraging people who don’t smoke to start ‘vaping’. Our customers are existing smokers.”

ASH estimates there are 650,000 to 700,000 users of e-cigarettes in the UK, most of whom are existing and ex-smokers, with around 125,000 having replaced tobacco cigarettes with e-cigarettes. It says there is little evidence to suggest that more than a negligible number of non-smokers regularly use the products.

As well as introducing an age restriction, some e-cigarette manufacturers would also welcome increased regulation on product testing.

E-Lites, VIP and Gamucci all undertake independent quality control tests but would encourage an industry standard for product quality to ensure safety and prevent non-reputable companies undermining the category.

Since it is a growing sector, businesses cannot afford to wait for the consultation’s results before ramping up marketing efforts. VIP is finalising its 2013 advertising activity, which is likely to include its first TV campaign in the summer.

“We want to recruit new customers and therefore we’ve got to get on with running our business,” says Whitmore. “By the same token, however, we have to be mindful that our plans are subject to change and build in a layer of flexibility.”

Indeed, companies do have to take care. Nicolite fell foul of the ASA earlier this year for claiming its products produce a “completely harmless vapour” and pose “no health hazard”, which the association said had not been substantiated and therefore the ad should not appear again in its current form.

“It’s hard to say that about almost any drug,” says Sandford. “If Nicolite had toned down the message to say it’s much less harmful than cigarettes or tobacco, it would have been fine.

It’s a good example of why we need these controls so companies don’t make exaggerated claims.”

While the sector awaits the results of the MHRA consultation, the category’s growth cannot be denied. The smart brands will continue marketing activity but be flexible in their approach and mindful that change could be afoot.

Tobacco brands expand into e-cigarettes

E-cigarette businesses are billing themselves as an alternative to tobaccoso unsurprisingly tobacco firms want a piece of the growing market too, particularly as there is so much pressure on consumers to quit smoking.

British American Tobacco acquired UK-based start-up CN Creative at the end of last year, which specialises in the development of e-cigarette products and technology, as it looks to offer smokers a “less risky” alternative to smoking.

Kingsley Wheaton, director of corporate and regulatory affairs at BAT, says: “Our core business is, and will remain in, tobacco but we’ve always made it clear that our goal is to provide those adult smokers who are seeking safer alternatives to cigarettes with a range of reduced-risk products that will meet their varying needs.”

Meanwhile, in an interview with the Financial Times in September 2012, BAT chief executive Nicandro Durante claimed tobacco alternatives could account for as much as 40 per cent of BAT’s revenues (which were £15bn in 2011) in 20 years’ time.

Elsewhere, Imperial Tobacco’s group communications manager Iain Watkins confirms the company’s intentions in the category.

He says: “We have made a very small investment in a third party e-cigarette business; the details of which are commercially confidential. We’re building considerable knowledge and expertise in the field of e-cigarettes and are actively engaging with regulators to support the development of appropriate regulatory frameworks.”

Watkins believes the growth of the category, along with the legal advertising of a variety of e-vapour products, including e-cigarettes, is “understandable given the increasing levels of public smoking restrictions and the fact so many adults enjoy smoking”.



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