Evolution of POS Tobacco Marketing
To celebrate the 50th anniversary of the 1964 Surgeon General’s report linking smoking to poor health outcomes, we took a look at the evolution of tobacco marketing at the point of sale. Long before the release of this landmark report, the tobacco industry used multiple platforms such as TV, billboard, radio and the point of sale to advertise its harmful products. In 1998, passage of the Master Settlement agreement severely restricted the tobacco industry’s advertising activities. However the agreement’s stipulations did not include regulations for point of sale (POS) marketing. According to the Federal Trade Commission’s Cigarette and Smokeless reports, tobacco companies paid over $8 billion dollars to promote their deadly products at the POS in 2015, translating to nearly $1 million per hour spent at the point of sale.
Although the retail environment has become an increasingly important channel for the tobacco industry, leveraging this avenue is not a new trick in their marketing toolkit. Industry documents reveal that for decades, tobacco companies have valued and recognized the importance of connecting with consumers at the point of sale. Let’s take a look at a few examples to see how marketing at the point of sale has changed over the years.
This re-colorized image from 1939 depicts Chesterfield and Camel’s external advertising at an “Old Gold” store.
This Falulah Paper Company ad highlights the trend of national brands, like Chesterfield cigarettes, who incorporate point of sale displays into their advertising campaigns to increase their marketing reach. The featured Chesterfield POS advertisement (left) reads, “For Christmas Gifts- Here’s the Answer! Chesterfield ‘Christmas Card’ Cartons.” On the right, is the color version of the actual Chesterfield advertisement.
Photo Credit: UCSF Tobacco Legacy Documents
This image, dating from the early to mid 1960s, captures an in-store holiday display containing cigar and cigarette gift boxes for Dad.
The excerpts below reveal how the tobacco industry began to pay special attention to the point of sale by developing internal programs to improve the success of advertising in the retail environment. At a 1975 internal meeting, a representative of R.J. Reynolds discusses the company’s three- year plan, in which the sales strategy was to “dominate at the point-of-purchase.” As outlined in the meeting transcript, R.J. Reynolds set out to overcome issues of poor brand exposure at the point of sale:
To address this issue, R.J. Reynolds formed a new separate merchandising team called the Individualized Merchandising Service (IMS) program. The IMS program engaged with retailers to streamline advertising and product distribution at the point of sale. This program’s goal was to gain the strongest brand exposure possible by ensuring that retailers had the shelving necessary to display products in a neat, organized fashion. An excerpt below highlights how IMS helped Food Fair, a retail outlet, better showcase their tobacco products, resulting in increased brand exposure among consumers.
During this time, R.J. Reynolds brands were also competing for advertising space at the point of sale. R.J. Reynold’s created Project DB, which set out to “offensively capitalize on the price sensitivity of young adult smokers.” The excerpt below from the 1984 R.J. Reynolds promotional sales document outlines plans for the look and layout of the POS display shelving designed to: 1) increase brand visibility among consumers, 2) communicate key marketing messages and 3) differentiate itself from already existing competitor displays.
In this photo, Marlboro ads are displayed prominently above and below the checkout counter of this retail outlet. Below the counter, one can see the multi-pack promotional tactic (still used today) of “Buy 4 packs, Get 1 Free.”
Courtroom records detail the testimony given by James McMahon, a former R.J. Reynolds division manager, regarding the R.J. Reynolds tobacco marketing initiative titled, “Young Adult Smoker (YAS).” This program was designed to target younger consumers. McMahon discusses his interpretation of a 1989 memo sent from headquarters that outlined regional next steps for the YAS program. McMahon’s testimonial indicates that a core component of the YAS marketing strategy was to target high school and college-aged youth via point of sale promotions and advertisements in local retail outlets. Additional court testimony reveals that R.J. Reynolds vehemently denied targeting underage smokers and countered that solely the Sarasota division had misinterpreted the YAS marketing strategy.
The following 1990 memo released by another R.J. Reynolds division manager in Oklahoma requests that all sales representatives submit reports that list retail outlets with high volume traffic in areas where colleges and high schools are located.
Over the years, the variety of tobacco products sold has increased significantly. At the point of sale, one can find a host of additional tobacco product offerings that did not exist 50 years ago, such as e-cigarettes and additional candy-like flavors for cigarillos and snus.
This image, photographed in November 2000, depicts a Winston Salem branded bin above the checkout counter of this convenience store located in the Triangle area of North Carolina. Also note the self-service Camel cigarette display on the right hand side.
In 2006, this self-service Skoal display was found right above the conveyor belt at the checkout counter of a supermarket in Summit, Arkansas. With the passage of the 2009 Family Smoking Prevention and Tobacco Control Act, self-service displays such as these are no longer permitted.
This 2007 image of an NJOY e-cigarette display shelving outfitted with audio presentation capabilities adjacent to a cigarillos shelf was photographed in Izard County, Arkansas.
Today’s retail environment looks something like this, with a large powerwall that displays traditional combustible cigarettes as well as e-cigarettes and forms of other tobacco products, including little cigars and cigarillos, smokeless tobacco, and snus.
When pursuing new tobacco control activities, advocates should also evaluate tobacco marketing activities in their community’s retail environment. New tobacco regulatory measures should consider the POS an important focus due to the tobacco industry’s increased presence in this channel over the last several decades.
For more striking images of the point of sale, visit Counter Tobacco’s photo gallery.
Have you ever wondered what the store will look like if the provisions of the 2009 Tobacco Control Act take effect, or if other point of sale policies are passed?
This photo series will show you.
Note that these images were created by the Counter Tobacco team and are for informational purposes only; we are showing you what *could* happen, not necessarily what *will* happen according to the exact letter of the law.
What’s the status quo?
First, look at what is happening today. Welcome to a typical convenience store. This is area near the cash register. Notice the three shelving units (Marlboro, Camel, White Owl) and many tobacco product signs? Can you also pick out the e-cigarettes? What about the individually packaged cigarillos? And SNUS?
This is what the store counter would look like if advertisements were required to be pure black and white, or “tombstone” format.
The 2009 Tobacco Control Act contains provisions that limit the color and design of packaging and advertisements, including audio-visual advertisements, Sec. 102. Implementation of these provisions is uncertain due to pending litigation. See Discount Tobacco City & Lottery v. USA, formerly Commonwealth Brands v. FDA. Sections 201 and 204 require packaging and advertisements for cigarettes and smokeless tobacco to have revised warning labels with a larger font size. Font colors are limited to white on a black background or black on a white background.
Now imagine if graphic health warnings were added to the tombstone advertisements.
Graphic health warnings are the standard in many places in the world; they are used so that everyone will know *exactly* the kinds of problems that tobacco can cause, instead of just generally that tobacco use is “bad for you”. The 2009 Tobacco Control Act contains provisions that require bigger, more prominent warning labels for cigarettes and smokeless tobacco product packaging and advertisements. The implementation date is uncertain, though, due to ongoing proceedings in the case of R.J. Reynolds Tobacco Co. v. U.S. Food and Drug Administration, No, 11-1482 (D.D.C.), on appeal, No 11-5332 (D.C.Cir.).
This is what the store would look like with graphic warning labels on the cigarette packages
This is another provision with an uncertain implementation date (due to tobacco industry litigation). Section 201 says that cigarette package health warnings will be required to cover the top 50 percent of both the front and rear panels of the package, and the nine specific warning messages must be equally and randomly displayed and distributed in all areas of the United States. These messages must be accompanied by color graphics showing the negative heath consequences of smoking cigarettes.
Product Display Ban?
Next up, what a store would look like if we passed policies to restrict product placement (“product display ban”)?
Product display bans can remove the “Powerwall” display of tobacco packages and signs at the cash register. Canada, England and other countries have already passed these policies.
Without restrictions on tobacco or other advertising in stores, however, a product display ban could simply provide a large, blank canvas for advertisers.
Imagine if we could simply transition the ‘tobacco section’ of this convenience store to a healthy foods section?
Our neighborhoods would be better for our health because everyone would have greater access to fruits and vegetables, and fewer impressions of tobacco advertising. Learn more about healthy retail here.