Working in an industry such as tobacco with its tight laws and regulations, and in many countries having a complete ban on marketing and advertising, is never easy.
In a fireside chat with Deepa Balji, executive director of marketing and communications at Publicis Groupe, APAC, Middle East and Africa, at Marketing’s PR Asia 2018 conference, Richard James, vice-president of corporate affairs, North and Northeast Asia at Philip Morris International (PMI), shared that over the years many in the advertising field have stayed away from working with the brand simply because of the products it produces.
“There was very limited interest from the creative industries in working with us, and even up until today, some will refuse to work with us,” he said.
But to change the dynamic, the brand made its way to Cannes this year to change the conversation around Philip Morris International’s science and engagement. It announced a bold call to action for the creative, media and communications communities to embrace its ongoing commitment to creating a smoke-free world. As part of this initiative, PMI also offered smoke-free alternatives wherever they could, including heated tobacco products and e-cigarettes, to smokers in the industry who would otherwise continue to smoke.
During a keynote at the PMI Science Lounge at Cannes, Philip Morris’ SVP of communications Marian Salzman said it wanted to urge the creative community to join PMI in raising awareness of the potential of science, technology and innovation for those who smoke and the people around them.
He added the move was part of PMI’s vision to lead the charge towards greater innovation and technology in the tobacco industry, all of which is backed by science.
“This led to a lot more interest from the creative industries and we gave an offer to the smokers to use our smoke-free products if their governments allowed it,” he said.
Meanwhile, on World No Tobacco day, it took out advertisements in leading newspapers such as The Washington Times and Financial Times to drive the conversation around products that don’t create smoke, and give non-quitters an alternative to smoking.
“The reception to this was varied. Of course some thought we shouldn’t enter this debate. But others thought it was good for us to be part of the discussion,” he said.
Q: Working for such a sensitive/controversial, but recognisable brand, how do you change the brand story and shift the conversation?
James: These days it is very difficult to separate the corporate brand from the individual product. People will see through anything that isn’t genuine. So what became very important for us was to commit to the conversation about a smoke-free future, and share our aspiration and company vision. This naturally led to consumers, who were smokers, being interested in the new types of products that would help them.
It was a reality for us that with the continuing regulation around tobacco-contained products such as cigarettes and consumer demand for better products that we had to change direction. But this isn’t something that happened overnight. We have been working on these products since 2008. PMI has already committed US$4.5 billion in supporting a team of 400 world-class scientists, engineers and technicians who have spent years creating and testing a range of smoke-free products.
There was a view in management that this was the time to be a bit more bold in our vision because we saw a lot more consumer interest in this segment and public health. So it made sense for us.
Q: With such tight laws and regulations around marketing and communications, what are your KPIs?
James: For the communications department, the KPIs are very different. They are based on different issues and different streams. The key KPI we are looking at is tracking sentiment. Our vision on smoke free is primarily directed to our consumers, our smokers – so we need to make sure for them there is relevance and people have some understanding and belief about the science.
We look at social sentiment as a KPI, purely because we have turned around the way we communicate. We are also looking at impressions, positivity versus negativity in articles that are coming through. We’re also asking our people to be much more proactive in the way they communicate.
Q: The local government in Singapore recently passed laws to stop branding on your packaging. Do you now see PR taking a bigger role in marketing?
James: Singapore has recently announced that by 2020 it aims to introduce standardised packaging for all tobacco products, which we see in a number of places around the world. Honestly, there is very limited aspects to what can be done as the product is behind closed counters and there is a complete marketing and promotion ban. So this is another initiative the government decided to take to remove any kind of branding from the packaging.
We gave our views on that and for us, how we see this is, is as an opportunity. You can keep taking on these regulatory measures, make them stronger or more extreme, but the reality is, in places like Singapore, the smoking prevalence has been pretty much flat for the past decade. So what is the next step or plan? I guess you can try and prohibit it, but will that be effective or not, I don’t know.
But this is where we can pivot into a discussion about different options and whether there is something that can be done with the product to give people who have decided not to quit, another option.
We remain hopeful that as scientific evidence on smoke-free products develop, policies will be adopted to accelerate the Government’s smoking control efforts by allowing adult smokers the opportunity to switch to less harmful alternatives.
Q: Recently, there have been tighter laws in promoting soda products/chocolate/fast-food to children. What tips do you have for communications professionals in these spaces?
James: I think what they’re experiencing now is what we experienced a while ago, especially if you look at the soda tax which is really spreading as a concept. I think there is a big challenge here for the soda industry in particular, because it’s also about individual responsibility and personal consumption. If someone is facing an issue with their health, it’s not like the soda company is telling people to consume a litre a day. But these are unfortunately some of the issues that are seen around soda.
I think they are doing some very good things from my observation and I have some good friends at Pepsi and Coke, and they’re really getting out and in front of the issue. It’s great they are talking about changing the product also, removing or reducing the sugar content.
I guess [for those in fields where promoting can be sensitive] I would say try to avoid the full-on combat. I don’t think that necessarily works these days. Keep on with the engagement and also accept parts of the terms of the regulatory environment. I know it is very hard if you’re in corporate affairs, because you have to convince the business side and the CEOs to accept certain things, and they will want to hear in terms of profits and margin. But you have to meet halfway, otherwise you are going to lose the battle.
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Q: There has been criticism about Philip Morris International not stopping production and the marketing of its cigarette products. How do you deal with negative feedback?
James: I totally understand where the negative feedback is coming from, and it is justifiable. Last year, smoke-free products amounted to about 4% of our volumes, which were around 17% of our revenue, an increase from 2016. While the commercial and marketing expenditure for smoke-free products are about 45% of our total commercial budget. There is still demand for cigarettes and there are many places we cannot sell the new products as well.
As we have investors to answer to, in order to fund our research and development, Philip Morris will continue to sell cigarettes, but hope to completely convert our products to smoke-free. We do see a lot of positivity in Japan where 16% of the market now is smoke-free. In Korea it is up to 10%, there is fast movement in a lot of markets with these products.
Q: How do deal with promoting a product that isn’t easily promotable to the wider audience – and is especially sensitive for youth?
James: At Philip Morris, we are very clear and we try really hard to ensure any of our communications are not directed to the youth community. My message to young people would be to not pick up smoking and/or use tobacco products. These products are addictive and harmful. So our message and products are into people who are existing smokers and encourage them that if they are not going to quit for whatever reason, they can switch to these volatile, smoke-free products.
Q: What excites you most doing communications for a relatively sensitive product?
James: Coming from a family with medical practitioners, I may be a rebel for joining this sector. I was attracted to Philip Morris because of the challenge, and every day will be something different. We do have horrific days, and it is certainly never boring.
I remember when my interviewee asked me who else was I talking to, and I was talking to another FMCG company, she said to me, “Well, it isn’t that interesting selling ice-cream, is it?” And I thought, “Yeah, maybe not.”
I really do enjoy the challenge and I do enjoy the fantastic people I work with day to day. [The role] attracts a certain type of person and one of the attributes I see in it is resilience. When you interview a candidate and you see them come in with very creative ideas, when you see them look to approach an issue in a very lateral way, it is fantastic. But I also really look for resilience and that is what I see in our people. That keeps me motivated. It’s the people I work with, and I believe truly in what we’re trying to do.
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