Why Banning E-cigarette Ads on TV Could Backfire

A new study finds that an increase in e-cigarette ads leads to a decrease in traditional cigarette sales.

Americans would likely be surprised to see a traditional cigarette ad during their favorite television show. After all, they have been banned on TV and radio since the 1970s.

Yet their modern equivalents exist.

Ads for electronic cigarettes, or e-cigarettes, are not technically included in this ban, and have been allowed in all types of media since the product’s introduction to the US in 2007.

Such ads have ignited controversy over whether they should be regulated in the same way as traditional cigarette ads. Although the electronic products are generally considered less harmful than their conventional counterparts, they still carry health risks. For example, e-cigarettes typically contain the addictive substance nicotine, and some studies have found that the devices may expose users to carcinogenic chemicals. But, even if assumed to be safer than conventional cigarettes, some people worry that e-cigarette ads could end up encouraging consumers to smoke more traditional cigarettes as well.

A new study by Anna Tuchman, an assistant professor of marketing at Kellogg, provides one of the first attempts to understand the effects of e-cigarette ads. In her study, Tuchman finds that an increase in the number of TV commercials for e-cigarettes is actually linked to a decrease in traditional cigarette sales, perhaps because smokers are substituting the electronic product for the traditional one.

The results suggest that policymakers should approach an e-cigarette ad ban with caution, Tuchman says. “Such a ban might have unintended consequences,” she says.

Tuchman says her study is one step toward understanding the possible implications of e-cigarette advertising restrictions.

“This is the first data-driven study on the effects of e-cigarette ads, and the results suggest that the role of e-cigarette advertising may be more nuanced than it initially seems,” she says.

Back to the Mad Men Days?

E-cigarettes are small devices that allow users to inhale the vapor created from heating a solution, which usually contains nicotine. This process is typically called vaping rather than smoking. Unlike traditional cigarettes, e-cigarettes do not burn any material or produce smoke or ash.

While e-cigarette sales in the US were initially sluggish, the market began growing quickly around 2011. Large tobacco companies bought independent e-cigarette brands or developed their own electronic products.

Critics of e-cigarette ads cite a few main concerns. One is the “gateway” effect, meaning that a nonsmoker may start with the electronic products and move on to conventional cigarettes.

Second, people might think the e-cigarettes in the ads are traditional cigarettes or subconsciously conflate the two products. Consumers might then be encouraged to try smoking, or a current smoker might crave traditional cigarettes more.

“The results suggest that the role of e-cigarette advertising may be more nuanced than it initially seems.”

eople also argue that the ads could make smoking socially acceptable again. In the decades since the Mad Men era, the public has generally recognized the lung-cancer risks of smoking conventional cigarettes. But e-cigarette ads often present vaping as cool and rebellious. For instance, the company FIN ran an ad of a young, attractive woman vaping with the tagline “Rewrite The Rules.”

“A lot of those ads tap into messages like youth and independence,” Tuchman says. “There’s a concern that there could be a growing re-affiliation of those ideals with cigarettes in general.” And many smokers start in their teens. “This is the age at which people often pick up this habit,” she says.

Opponents of an advertising ban say the commercials could prompt smokers to switch to e-cigarettes and thus improve their health overall. They also suggest that e-cigarettes may help people quit smoking traditional cigarettes, similarly to nicotine patches or gum. But there is no consensus yet on whether using e-cigarettes is an effective quitting strategy.

To resolve the debate over the ban, more research is needed, Tuchman says.

“There’s been a lot of discussion arguing one way or the other without a lot of evidence to support either position,” she says. “Ultimately, we need to dig into the data.”

Are E-cigarettes a Substitute Product?

So Tuchman undertook an empirical analysis.

She examined data from the market research firm Nielsen on nicotine product sales at about 35,000 stores in the United States from 2010 to 2015. She also obtained data on e-cigarette TV advertising across the country. Ad intensity was measured in gross rating points (GRPs), which capture the number of times an ad is seen, divided by the area’s population.

Next, Tuchman tried to determine how advertising levels affected traditional and e-cigarette sales.

Companies can buy local ads in designated market areas (DMAs), which usually include at least one city and the surrounding rural regions. People along one side of a DMA border are likely similar in many ways to residents who happen to live along the other side. By comparing data from those neighboring areas, Tuchman could examine whether showing more ads on one side tended to increase sales.

She found that increasing e-cigarette ads by 10% was linked to a 0.2% drop in traditional cigarette sales. While this effect sounds small, Tuchman noted that the size of the effect is comparable to ad effects measured in other industries.

The finding might surprise people who believe the ads increase demand for traditional cigarettes. But “when you think about it, it makes sense,” Tuchman says. “This is a close substitute product.”

The same 10% increase in e-cigarette ads also led to a 0.8% increase in e-cigarette sales. But because the e-cigarette market is much smaller than the traditional cigarette market, overall nicotine consumption still decreased, Tuchman found.

Next, she analyzed Nielsen data on the shopping patterns of nearly 900 households that had bought at least one e-cigarette product from 2010 to 2015. The data suggested that e-cigarettes did not encourage smoking. If a household had recently purchased e-cigarettes, they were less likely to buy traditional cigarettes.

Going Back in Time

Finally, Tuchman incorporated the data into a model. She wanted to estimate the effects of a hypothetical ban over the last several years. “Let’s try to go back in time and say: What if policymakers had banned e-cigarette advertising in 2012?” she says.

According to the model, traditional cigarette sales would have increased by 1.0%. Nationwide, that corresponds to about 130 million more packs purchased per year from 2012 to 2015.

These results do not uniformly suggest that a ban would be negative.

For instance, the Nielsen data suggested that increases in e-cigarette ads also were linked to lower sales of nicotine patches and gum. If people are abandoning efforts to quit smoking because they figure they can vape instead, that would be a concern, Tuchman says. Consumers’ health also could suffer if e-cigarettes don’t help smokers quit as effectively as nicotine replacements do.

In addition, the consumers included in Tuchman’s study are not necessarily representative of the rest of the US population. Areas along the borders of DMAs tend to be more rural, and residents of these areas are on average older, more Caucasian, less educated, and have lower incomes than the average American. Smoking is more common in rural areas, which might explain why many consumers seem to be substituting e-cigarettes for traditional cigarettes. But in cities, where fewer people are smokers to begin with, e-cigarettes might serve as an introduction to nicotine rather than a replacement for conventional cigarettes.

And the study does not address one of the biggest concerns about the ads: that regardless of the impact on overall sales, young people might be particularly vulnerable to developing an ultimately harmful habit. For instance, critics argue that teenagers may be tempted to try e-cigarettes and then experiment with traditional cigarettes. More research is needed to figure out how young people react to the commercials and the long-term consequences of such messages.

Policymakers’ Dilemma

Policymakers considering a ban still face tough choices. It is possible that e-cigarette ads may benefit people who currently smoke but harm nonsmoking teenagers. Policymakers will have to balance the value of helping smokers quit versus preventing young people from starting.

“It boils down to: How many smokers quitting or moving to e-cigarettes would you need to see in order to feel comfortable with having one nonsmoker or teenager adopt a product?” Tuchman says.

Tuchman is approaching the issue as an academic researcher, not an advocate. “I’m just trying to document the patterns I observe in the data,” she says, emphasizing that her work was not funded with any money from tobacco or e-cigarette companies.

“It’s the first empirical evidence we have at all analyzing what’s happening in the market,” she says.

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