Because the tobacco companies have preferred to keep their advertising budgets confidential, accurate figures for advertising expenditure have never been easily obtainable. Moreover, advertising expenditure has covered a number of components (print, billboard, sponsorship, sales promotions, revenue to advertisers and so forth) and figures quoted have rarely provided a detailed breakdown of costs.
From information provided by the tobacco companies to a Parliamentary study on sports funding, around $20 million was spent on sports sponsorship in 1989.(30) During their campaign in 1989 to preserve the right to advertise in the press, the tobacco industry consistently quoted $50 million as the amount spent on print advertising,(31) and independent research suggests that this is probably true.(32) Given that these amounts do not include advertising agency fees, or costs of billboard, cinema or point-of-sale advertising and other promotional expenses, they roughly tally with a statement made by the Tobacco Institute of Australia, which attributed the industry with total advertising and promotional expenditure of $120 million in 1989.(33) It should be noted, however, that in an environment where advertising was under threat, it would have been in the tobacco industry's interests to overstate the amount of money spent on advertising, thereby making the potential loss of revenue more intimidating to those affected. There is evidence that the tobacco industry overstated the amount of its sports sponsorship during the debate leading up to the introduction of the Victorian Tobacco Act (1987).(34)
In the first quarter of their final year of print advertising before the ban, tobacco companies increased their expenditure in newspapers and magazines by around 30%, becoming the highest spending industry group on advertising.(35) Rothmans and Philip Morris launched new brands in the last weeks before the print ban came into force, Wills introduced an Ultramild Menthol extension to Stradbroke, and Davidoff, an imported brand, was introduced by The Alexander Group.(36) Rothmans' launch of Holiday 50s in late 1990 was believed to cost between six and seven million dollars.(37)
According to the Prices Surveillance Authority (PSA), in 1993, marketing and advertising costs (excluding some elements of selling costs) represented approximately 20 percent of manufacturers' total costs, and around 16 percent of total sales (before excise). The PSA observed that compared to other declared consumer goods, cigarettes are heavily promoted by advertising.(38)
Australian tobacco companies may also increase promotional activities in the off-shore marketplace. Rothmans is said to have committed $82 million for this purpose for the next five years, almost doubling its budget from the past five years.(39)