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US tobacco companies are barred from advertising on TV, including paying for product placement in television shows. However, that hasn’t stopped many shows from making prominent use of tobacco products—for some characters, such as Mad Men’s Don Draper, cigarettes are an integral part of their image. How do such depictions of tobacco use affect sales off-screen? Chicago Booth’s Pradeep K. Chintagunta and Sanjay K. Dhar, along with their coauthors Ali Goli and Simha Mummalaneni from the University of Washington, brought together several datasets to examine this question.
Narrator: [Reading from TV script] Interior Knick Knack Bar. Don crosses something out, puts down his fountain pen, and taps a cigarette out of a pack of Lucky Strike.
Busboy: Finished, sir?
Don Draper: Yeah. Do you have a light?
Narrator: Don Draper, one of television’s favorite bad boys, landed on our television screens in 2006. The iconic adman was often seen working with a drink in one hand and a cigarette in the other. In the first episode alone, he had a cigarette in eight of his scenes.
Cigarette companies aren’t allowed to advertise their wares on TV. In 1998, the Tobacco Master Settlement Agreement banned most advertising and sponsorship activities for tobacco products. That means they can’t, say, pay a TV show like “Mad Men” to use their brand in a scene. However, shows still do show smoking and packaging for many prominent companies. And exactly how does that affect sales?
Chicago Booth’s Pradeep Chintagunta and Sanjay Dhar, along with their coauthors Ali Goli and Simha Mummalaneni from the University of Washington, explored TV-show viewership data from 92 markets in which cigarettes appeared. They find that this product placement increased sales of the cigarette brands featured on screen— and what’s more, it also increased sales for competitor brands.
The researchers used IRI store scanner data for sales of 15 cigarette brands to collect how many packs of cigarettes were sold from more than 2,700 stores in 41 states. They merged the sales information with Nielsen PlaceViews data, from December 2003 to July 2006. The PlaceViews data keeps track of cigarette product placements on network TV. Combining all this with Nielsen Ad Intel data, which tracks how many viewers are seeing a specific show, they were able to determine how many people were exposed to cigarette placements.
The researchers created a model to measure how the placements affected cigarette sales. They find that a 10 percent increase in exposure to cigarette product placements increased sales by 0.2 percent. More significantly, however, they increased sales by the same amount for the other competitor brands that weren’t even featured. These findings imply that cigarette placements raise sales of any and all cigarettes regardless of which brand is being featured on screen, and the magnitude of the effects are similar to those documented for regular TV advertising.
The researchers suggest these facts could justify better regulating cigarette product placements. Banning the names and logos of brands would reduce cigarette sales by less than 2 percent, but a ban on all on-screen smoking would reduce sales by 7 percent. Even though cigarette use among American adults has fallen significantly since 1965, and US cigarette companies are barred from advertising in TV shows and movies, they’re still benefiting from the free advertising they receive in popular media today.
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