The major U.S. tobacco companies have cut their spending for cigarette advertising and promotion by nearly $1.9 billion since 2008, according to a report released last week by the Federal Trade Commission (FTC).
According to the FTC's Cigarette Report for 2009 and 2010, the advertising spending by the nation's largest cigarette companies dropped to $8.05 billion in 2010, down from $8.53 billion in 2009 and $9.94 billion in 2009.
As in 2008 and 2009, the cigarette companies spent most of their advertising budgets on promotional discounts paid to cigarette retailers or wholesalers to support reduced prices of cigarettes to consumers in 2010.
Promotional discounts accounted for $6.94 billion or 80.7% of total advertising expenditures in 2010, compared to $6.67 billion or 78.2% of the total in 2009.
The five top cigarette companies have steadily increased their spending for magazine advertising, from $25.5 million in 2008 to $36.7 million in 2009 and $46.5 million in 2010. At the same time, their spending on all forms of outdoor advertising, like highway billboards has decreased from $2.0 million in 2008 to $1.7 million in 2010.
Sales Down, Too: The number of cigarettes reported sold or given away by the major manufacturers has also dropped significantly, from 322.6 billion cigarettes in 2008 to 290.3 billion in 2009 - a 10% decrease -- and to 282.0 billion in 2010.
Since reaching a high of 636.5 billion in 1981, the number of cigarettes sold annually in the United States dropped to an all-time low of 281.6 billion in 2010.
Smokeless Tobacco Ads Also Drops: The FTC also reported that the cigarette companies cut back on their spending on advertising and promotion of their smokeless tobacco, from $547.87 million in 2008 to $492.10 million in 2009, and again to $444.20 million in 2010.
But Smokeless Sales Rally: After falling from $2.76 billion in 2008 to $2.61 billion in 2009, sales of smokeless tobacco products rose to a new high of $2.78 billion in 2010, according to the FTC's Smokeless Tobacco Report for 2009 and 2010.