[Intl-tobacco] European Advertising: Ad Bans Force Tobacco Firms To Think 'Outside of the Box' (fwd)

[Robert Weissman]

European Advertising: Ad Bans Force Tobacco Firms To Think 'Outside of the
Box'
by SARAH ELLISON / Staff Reporter of THE WALL STREET JOURNAL
Source: The Wall Street Journal Interactive Edition, Monday, 2/14/00

LONDON -- While governments and tobacco interests battle in court,
advertisers are hitting the streets, using what tools they can to
sweet-talk customers.

"Tobacco companies are being forced, ahead of every marketeer, to think
more creatively," says Richard Hammond, managing partner at Spirit, a
London-based advertising and customer-relations agency. (Imperial Tobacco
PLC is expected to announce soon that it hired Spirit to handle U.K.
promotions for some of its brands.)

"But they have to do it without the traditional marketing toolbox that
other companies have," he adds. "Tobacco companies have found themselves
at the forefront of finding ways to build brands."

Sound Strategy

Take the example of BAT Industries PLC's partnership with the Ministry of
Sound nightclubs.

At the hip Ministry of Sound in south London, crowds of young partygoers
groove to mixes of trip-hop and jungle music. Andrew McNab, a 28-year old
computer technician dressed in a tight black shirt and leather cargo
pants, stands at the bar and orders three pints of beer for himself and
his friends. "Do you have any Marlboro Lights?" he shouts to the
bartender. "Just Lucky Strikes," she yells back. He nods and she tosses
the pack onto the bar.

The partnership between the world's second-largest cigarette manufacturer
and the trendy nightclub was engineered by Colin Hearn's team at Bates,
London, part of Bates Worldwide, owned by Cordiant Communications Group
PLC. Mr. Hearn is the world-wide client director for BAT at Bates, which
handles the Lucky Strike brand. "We think the two are a great fit," he
says, "and it works well for both companies."

Since BAT and the Ministry of Sound linked up in 1998, the club's disk
jockeys have toured Asia and Europe and thrown hundreds of Ministry of
Sound parties that hosted more than half a million people.

Ministry of Sound provides the music and BAT manages the venues and
promotional activity. Lucky Strikes are for sale at all events and the
whole club is branded as a "free-thinking, dynamic, adventurous" place --
the same words that BAT uses to describe hipsters who smoke its Lucky
Strike brand of cigarettes.

Direct Approach

Likewise, in gold-toned B & H cafes in Asia, shoppers can stop for a drink
and buy cigarettes, namely Benson & Hedges, right at the counter. Golden
Dreams, another B & H concept, gives away a free vacation to customers who
write in with their ideal getaway.

"The key is to be able to communicate with the customer," says Mr. Hearn,
adding, "You need to get to your customer in a personal relationship."

Personal relationships are soon to be about the only relationships tobacco
companies can have with customers, given the European Union directive on
tobacco advertising, which says it will ban all commercial communication
and sponsorship of tobacco products.

In the meantime, cigarette makers like BAT have time to plot strategies.
Certain areas will be difficult to cover under the EU ban, like
controlled-circulation trade magazines, the Internet, company partnerships
and point of sale. It is these areas that advertising executives say are
the future of tobacco promotions.

Trade magazines, which sell themselves to established customers as a sort
of lifestyle journal, have become popular in the U.S. For example, Brown &
Williamson Co. in the U.S., owned by BAT, sends a fashion and beauty
glossy to smokers of its Misty, Capri and Carlton brands and an
outdoor-sports magazine to Kool and Lucky Strike smokers. The magazine
concept hasn't caught on yet in Europe, but is being explored by BAT,
Imperial Tobacco and Gallaher Group PLC, two other U.K. tobacco companies.

Another way to cozy up to customers is to talk to them directly on the
phone. Brown & Williamson recently sponsored a call-in line for customers
that featured an exaggerated, over-the top recording of a company
representative who professed love for all Brown & Williamson customers.

Less wacky, but perhaps more crucial to sales are in-store promotions.
Small retailers have a lot of power over who buys what; companies makes a
big effort to keep those retailers happy, says Michael Prideau, head of
corporate affairs at BAT. In annual satisfaction surveys of the small
shop-owners that peddle cigarettes in gas stations and corner stores,
tobacco companies "come out on top," he adds.

Question of Effectiveness

Despite the eternal optimism of tobacco companies, some ad men and women
aren't so positive. "I'm not sure they'll be able to do much," says Andrew
Brown, director general of the Advertising Association in London. "The
intention in the U.K. is to suffocate all forms of communication between
manufacturer and consumer."

Some tobacco companies are tight-lipped about their marketing strategies,
skittish that either the government or the competition will use their
strategies against them. Officials from Gallaher Group, market leader for
cigarettes in the U.K. and Ireland, declined to discuss the company's
marketing plans. At Imperial Tobacco, a spokeswoman, Liz Buckingham said
the company's strategy was "fairly boring" and that it "wasn't planning
anything special," to prepare for the ban.

For now, tobacco companies are free to advertise just about anywhere
except television. When and how European countries implement the EU
directive is, to an extent, up to each government, as long as individual
deadlines fall within the EU timeline. That means no outdoor advertising
after July 2001, no print advertising after July 2002 and no sponsorship
after July 2003, except for Formula One car racing, which has until July
2006. In the U.K., the government had planned, albeit unsuccessfully, to
implement portions of the ban at the beginning of this year. By contrast,
Germany is challenging the ban, saying it violates free speech.

Regardless of what happens in court, advertising agencies will keep up
their efforts. "Every time they change the rules, you have to apply new
thinking," says Spirit's Mr. Hammond, adding, "You have to think out of
the box."

Write to Sarah Ellison at sarah.ellison@wsj.com1

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