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Inside the Philip Morris campaign to ‘normalize’ a tobacco device

https://www.reuters.com/article/us-philipmorris-international-iqos-insig/inside-the-philip-morris-campaign-to-normalize-a-tobacco-device-idUSKBN20F1Q7

(Reuters) – At Germany’s Bambi Awards for the media industry in November, celebrities posed for red-carpet photos against a backdrop of established luxury brands. Alongside the likes of Mercedes-Benz and Swiss watchmaker Chopard was a newer name: IQOS, a “reduced risk” heated-tobacco device sold by cigarette maker Philip Morris International Inc.

Across Europe, Asia and South America, the tobacco firm has affixed the IQOS brand to music festivals and art exhibits. The company also markets through IQOS lounges at mountainside resorts in the Pyrenees and in fashionable neighborhoods of Rome. Throughout Europe, it has partnered with “IQOS friendly” bars and restaurants – closed to cigarettes but open to IQOS.

Such promotions are part of a wide-ranging “normalization” strategy by Philip Morris (PM.N) to scrub its image as a purveyor of cancer-causing cigarettes and present its new smoking alternatives as youthful, upscale lifestyle products, according to a ten-month study by tobacco researchers at Stanford University, who shared it exclusively with Reuters before its release on Friday. The marketing strategy mimics that of tobacco companies in the mid-20th century, when they started associating cigarettes with Hollywood and high society.

“Philip Morris, as a company name, is somewhat of a pariah,” said Robert Jackler, a professor who led the study and heads Stanford’s Research into the Impact of Tobacco Advertising. “IQOS is an attempt to sanitize their product line.”

The Stanford researchers said their study was spurred in part by a May 2019 Reuters investigation that found Philip Morris had used young online personalities, including a 21-year-old woman in Russia, to promote IQOS. The company’s internal marketing standards prohibit it from using youth-oriented celebrities or “models who are or appear to be under the age of 25.” The Reuters report prompted the company to acknowledge it had violated its own policy and to suspend its use of social media influencers.

The Stanford study found that, although the company suspended its “most visible” social-media influencer programs, IQOS marketing continues to stray substantially from its corporate standards on youth-oriented marketing.

“Its use of youth-oriented social media channels, trendy pop music festivals and celebrity influencers are mis-aligned with their commitment to exclusive ‘adult smoker’ targeting,” the Stanford report concluded.

Philip Morris declined to answer detailed questions from Reuters on its IQOS marketing strategy and the Stanford findings, saying it did not have access to the full report. “However, we doubt that there is anything PMI could say or do that Dr. Jackler, and others who criticize our scientific commitment and smoke-free vision, would ever find satisfactory.”

The IQOS device is central to the firm’s efforts to overhaul its image through such initiatives as its “unsmoke” campaign, which promotes such “smoke-free” alternatives as a way to accelerate the shift away from cigarettes. The device heats up but does not burn packages of ground-up tobacco, which resemble small cigarettes, to create a nicotine-filled aerosol that is similar to that produced by e-cigarettes, which heat flavored liquid nicotine.

At this year’s Davos World Economic Forum in Switzerland – a gathering of some of the world’s richest people – Philip Morris set up an “Unsmoke your mind” lounge, where panelists argued against regulations preventing “truth in marketing” by tobacco firms looking to promote smoking alternatives.

IQOS is sold in about 50 countries, including the United States through a partnership with U.S. Marlboro maker Altria Group Inc. The two companies pledged to regulators that they would market the device only to adult smokers, showing sample advertisements of adults conservatively dressed in business attire.

But in other markets across the world, the Stanford study said, Philip Morris uses “coaches” and “ambassadors” to market IQOS. In Romania and Russia, employment agencies recruit attractive women as young as 19 to market IQOS, according to job postings mentioned in the Stanford report and reviewed by Reuters.

Instagram postings for Be Like Me, a Romanian marketing agency, show young women posing with the IQOS device in recent months, often wearing robe-like uniforms in malls. The Instagram account for RBT Group, a staffing agency in Russia that markets IQOS, similarly shows photos of attractive young women in front of IQOS signs or posing with other “coaches.”

Be Like Me and RBT Group could not be reached for comment.

Other Instagram accounts with the “IQOS” name, including one called “iqostyle.arm,” based in Armenia, continue to show young women posing with the IQOS in what appear to be professional photographs. One photo on that account from last July – two months after Philip Morris said it had suspended all influencer marketing – showed Nika Shuvalova, a 22-year-old Ukrainian model, posing in a swimsuit on a boat with an IQOS.

Shuvalova could not be reached for comment.

A message sent to the “iqostyle.arm” Instagram account was returned by someone calling themselves Tiko, who said the IQOS postings were a “hobby” and that he had not been paid by Philip Morris.

BIG BET ON IQOS AND ‘NORMALIZATION’
The stakes for Philip Morris are huge: The company invested $6 billion in developing “smoke-free” products such as IQOS in hopes of staving off a trend of declining global cigarette sales. In 2018, company CEO Andre Calantzopoulos told shareholders that it hoped to receive about 40% of its revenue – nearly $20 billion – from “reduced risk” products by 2025.

Internal Philip Morris documents underscore the importance of its larger strategy: “Make ‘normalization’ a PMI priority and imbed this mindset into the organization,” read an internal company document from 2014, reviewed by Reuters as part of a 2017 investigation. The document also cited “the threats posed by PMI/industry de-normalization” – such as lobbying bans and exclusions from international treaties and trade agreements – “and the need to reverse this trend to drive future growth.”

The Stanford researchers pointed to wide-ranging company efforts to associate IQOS with fashion, art and popular culture in a way that cigarette brands such as Marlboro have been unable to do, given changing social attitudes and laws around the world that prohibit such advertising and promotions.

IQOS has been present at events such as Germany’s Bambi Awards – which honor stars in TV and film, sports, art and music – as well as that country’s Playboy Playmate of the Year Awards.

Philip Morris worked with British sculptor Alex Chinneck on a dramatic installation at the 2019 Milan Design Week. The work depicted the facade of an old, two-story building being unzipped like a pair of jeans – meant to signify the IQOS “notion of opening the future,” the sculptor said in an interview with FAD magazine. A representative of Chinneck confirmed the partnership.

The company also worked with distinguished industrial designer Karim Rashid to create an installation at the previous year’s Milan Design Week. In an interview with website fashionrepublik.com, Rashid described his installation, showing two faces meeting one another, as similar to the IQOS, which he called “an intimate device that speaks to forward-thinking and original expression.” A representative of Rashid said he was unavailable for an interview on Thursday.

GETTING TOBACCO BACK INTO RESTAURANTS, BARS
The company has also sought to distinguish IQOS from smoking through partnerships with restaurants, bars and salons who designate themselves as “IQOS friendly” spaces, where cigarettes are banned but the IQOS device is allowed. The Stanford researchers found evidence of hundreds of “IQOS friendly” establishments in places such as the Czech Republic, Ukraine, Romania and Japan.

Philip Morris did not respond to questions about its business relationships with the establishments that promote the device and display its branding.

The Stanford researchers and other experts say such policies undermine public smoking laws and encourage dual use of cigarettes and alternative devices. Many users will continue smoking outdoors, but turn to e-cigarettes or IQOS where they are permitted indoors. Such switching can “deepen nicotine addiction and make cessation less probable,” the Stanford report said.

The brand also had a presence at a Tel Aviv University student music festival last year – where the minimum age for entrance was 16, and where a video showed young IQOS staff at a pop-up booth.

At a launch party for IQOS in Albania last year, a performer in an elaborate white sequined dress did an interpretive dance on stage with an IQOS, while another performer attached to wires performed acrobatic moves in the air while playing a violin.

“They’re trying very hard to resurrect the glory era of smoking, where it was glamorous and sophisticated and stylish,” Jackler said. “It’s about associating it with all the good things in life.”

Philip Morris suspends social media campaign after Reuters exposes young ‘influencers’

https://www.reuters.com/article/us-philipmorris-ecigs-instagram-exclusiv/exclusive-philip-morris-suspends-social-media-campaign-after-reuters-exposes-young-influencers-idUSKCN1SH02K

(Reuters) – Cigarette maker Philip Morris International Inc has suspended a global social media marketing campaign in response to Reuters inquiries into the company’s use of young online personalities to sell its new “heated tobacco” device, including a 21-year-old woman in Russia.

https://www.reuters.com/video/?videoId=RCV006PLP&jwsource=cl

The company’s internal “marketing standards” prohibit it from promoting tobacco products with youth-oriented celebrities or “models who are or appear to be under the age of 25.”

The company told Reuters of the decision late Friday, saying it had launched an internal investigation into marketing posts and photographs that Reuters sent to the company for comment earlier this week.

They included a paid post plugging the tobacco product by social media “influencer” Alina Tapilina in Moscow – who listed her age as 21 on Instagram – alongside often seductive photos of herself drinking wine, swimming and posing with little clothing in luxurious settings.

“We have taken the decision to suspend all of our product-related digital influencer actions globally,” the company told Reuters. “Whilst the influencer in question is a legal age adult smoker, she is under 25 and our guidance called for influencers to be 25+ years of age. This was a clear breach of that guidance.”

“No laws were broken,” the company told Reuters. “However, we set high standards for ourselves and these facts do not excuse our failure to meet those standards in this instance.”

The company added: “We were deeply disappointed to discover this breach and are grateful that it was brought to our attention.”

The U.S. Food and Drug Administration (FDA) last month decided it would allow sales of the IQOS device in the United States after a two-year review process in which Philip Morris repeatedly assured the regulator that it would warn young people away from the product.

The FDA declined to comment Friday evening on Philip Morris’s decision to suspend the marketing campaign. The agency earlier said it would “keep a close watch on … how the company is marketing its products.”

While most of the social media influencers hired by Philip Morris overseas did not list their ages on Instagram, a Reuters review of the firm’s social media marketing of IQOS in Japan, Italy, Switzerland, Russia and Romania shows that Tapilina’s online persona was typical of what the company called its social media “ambassadors” for the device – rail-thin young women who revel in the high life.

The company did not directly respond to additional questions Friday night regarding the intended audience for its digital influencer campaigns.

Many of the messages contained the hashtag “#IQOSambassador,” tying them into a network of social media influencers that the international tobacco giant has relied on to brand the IQOS as a safer alternative to cigarettes and a sexy fashion accessory.

“I finally have the new IQOS 3, and I can confidently say yes to change … the level of harmful substances is on average about 90 percent lower than in smoke,” Tapilina wrote in an April post. “You haven’t yet switched to IQOS?”

One Romanian IQOS marketer is 25 years old, according to a separate actress biography, but did not list her age on Instagram. Tapilina and nine other IQOS marketers did not respond to requests for comment.

Philip Morris, in its statement to Reuters, said its suspension of the social marketing campaign is “concrete proof” of its “conviction to achieve a smoke-free world through socially responsible practices.”

Matthew Myers, president of The Campaign for Tobacco-Free Kids, had a different take upon hearing of the suspension Friday night. The advocacy group collected some of the IQOS marketing images reviewed by Reuters.

Philip Morris, he said, “is changing their behavior only when caught red-handed.”

The company, Myers said, has historically been “the single most successful across the globe in making cigarettes fashionable to young people.”

HAPPY VALENTINES DAY!
Over the past year, Philip Morris has increasingly publicized its “mission” to prevent young people from using tobacco products. Last month, it issued a release calling on “all tobacco and e-cigarette companies to do their part to guard against youth nicotine use.”

“Let me be clear: We at Philip Morris International do not, and will not, market or sell our products to youth,” CEO André Calantzopoulos said during a speech in Boston earlier this month. “For Philip Morris International, age matters.”

When Philip Morris submitted marketing plans with an FDA application for IQOS in 2017, its sample advertisements featured models appearing at least a decade older and wearing modest, professional clothes.

That application, which is still pending before the FDA, seeks approval to market the IQOS as less harmful than smoking and outlines company plans to ensure it doesn’t market the device to “non-intended audiences.” The device heats up but does not burn packages of ground-up tobacco, which resemble small cigarettes, to create a nicotine-filled aerosol.

In Japan, the intended audience for IQOS marketing includes the Instagram followers of Ayame Tachibana, a 27-year-old DJ and model. In one post, she shows off a Valentine’s Day message for the IQOS device, lovingly scrawled with multicolored pens.

“Happy Valentine IQOS. Love you sooo much!” reads the Instagram post from February.

Alina Eremia, a Romanian actress and singer, holds a gold-colored IQOS in front of a Christmas tree.

“My list of resolutions contains 95% fewer moments without a smile,” says Eremia, who is 25 according to her actress biography on multiple movie and celebrity information websites.

Philip Morris says the IQOS – an acronym for “I quit ordinary smoking” – contains up to 95 percent fewer toxic compounds than cigarettes.

Vlad Parvulescu, a manager for Eremia, confirmed she had been hired to promote IQOS and said she had been contacted by a Romanian public relations agency. He did not respond to additional questions about the financial arrangement.

Marketing deals between companies and social media influencers vary widely, according to industry experts. But typically a company will work through third-party public relations or advertising firms that have relationships with online personalities. Compensation typically ranges from $20 to $25,000 or more for each post.

Corporations have become increasingly sophisticated in how they approach their social media campaigns in the past two years, said Joe Gagliese, co-founder of Viral Nation, a marketing and talent agency that works with influencers.

He once had to explain the basic concept of an “influencer” in pitch meetings. Now, companies approach him with “tailor-made decision briefs saying, ‘this is exactly what we want.’”

Reuters reviewed dozens of social media posts featuring the IQOS device. Many included hashtags such as #IQOSAmbassador, #paidad, and #notriskfree, indicating that they are IQOS marketing posts.

Many of the Instagram influencers featuring the products had tens of thousands of followers, and a few had more than a million.

VIRAL CAMPAIGNS, BLURRED LINES
Devices such as IQOS and Juul hold potential as a way for cigarette smokers to transition to less harmful nicotine products, but some public health advocates worry the sleek new devices are addicting young people who would have never smoked cigarettes. Among traditional cigarette smokers, 90 percent start smoking before the age of 18, according to federal data.

Philip Morris said there have been “no reports” of “worrisome levels” of unintended use of IQOS.

As part of the FDA review process, Philip Morris pledged to market only to adult cigarette smokers once it begins selling IQOS this summer through a partnership with Altria Group Inc, which sells Marlboro cigarettes in the U.S. IQOS delivers about the same level of nicotine as a traditional cigarette.

Altria did not respond to requests for comment.

Social media marketing has become a flashpoint in the debate over regulation of tobacco products, particularly the newest generation of products such as the wildly popular Juul e-cigarettes.

Some of Juul’s early social media and YouTube marketing included images of attractive young people, particularly at a 2015 product launch party. Twitter images from that time on Juul’s official account featured sensual images of a young woman breathing out Juul vapor in a group, next to the slogan, “Share a #Juulmoment.”

Those early campaigns sparked an explosion of video and photo posts from young people showing themselves using the product at school or with friends, often under the hashtags #doit4juul or #juullife. Juul Labs Inc has since said it stopped using social media influencers and requires anyone in its ads to be a former cigarette smoker older than 35.

Juul Labs Inc said in a statement it recognizes that “some of our earliest marketing initiatives did not fully reflect the goal of our company,” which it describes as helping cigarette smokers transition to its products.

“As a young company, we learned from our experiences and instituted changes to help ensure that we are only reaching current adult smokers,” the company said.

CONDITIONAL APPROVAL
U.S. laws governing tobacco advertising – which is banned on radio and television – were drawn up long before social media and digital advertising became a dominant force in consumer marketing.

Although no current state or federal law restricts tobacco advertising on the Internet – including for e-cigarettes and devices such as IQOS – the FDA can use its authority over new devices to assert sweeping control over a company’s marketing.

As a condition for allowing the device to be sold, the FDA is requiring Philip Morris to provide detailed analyses of the age ranges of consumers it reaches through digital advertising. Philip Morris is also required to submit any new advertising campaigns, including digital and social media efforts, to the FDA at least 30 days before it plans to launch them.

Any paid influencers promoting the product also must disclose “any relationships between you and entities that create labeling for, advertise, market, and/or promote the products, on your behalf, or at your direction.”

Those rules aim to restrict youth access to tobacco marketing, the FDA said in a statement, “especially in shared digital properties such as social media sites.”

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Philip Morris device knows a lot about your smoking habit

https://www.reuters.com/article/us-tobacco-iqos-device-specialreport/special-report-philip-morris-device-knows-a-lot-about-your-smoking-habit-idUSKCN1IG1IY

TOKYO/NEUCHATEL, Switzerland (Reuters) – In seeking regulatory approval for a new smoking device called iQOS, Philip Morris International Inc is claiming the electronic gadget is less likely to cause disease than traditional cigarettes. But the iQOS holds another, less obvious advantage over regular smokes: the ability to harvest personal data about users’ smoking habits.

The tobacco giant is already building a database of iQOS customers who register with the company. And it has developed a software application that could take things a step further.

The initiative, if allowed by regulators, could extract information about a user’s smoking routine from the device and use it for marketing purposes, said a former project manager at the company who tested the software in Japan. That data would include the number of puffs and average consumption per day, said Shiro Masaoka, who worked at Philip Morris in Japan from 2012 to 2016.

Asked about Masaoka’s comments, Philip Morris said the software in the device that controls temperature and duration of use “is not used for marketing purposes whatsoever.”

A Canadian firm that specializes in reverse-engineering tech devices says the iQOS is equipped with two microcontroller chips, including one that, with modifications to the device, could support the storing of usage information that could then be transmitted back to Philip Morris. From the product description of the chips used, the data could include details like the number of puffs by a user and how many times a person smoked the device in a given day, according to Ottawa-based TechInsights Inc, which examined the iQOS’ innards for Reuters.

The firm’s inspection included the hardware and components; it did not test the functionality of the device’s software. Reuters is publishing TechInsights’ teardown report as part of a searchable repository, The Philip Morris Files, which includes internal company documents.

Presented with the TechInsights findings, Philip Morris said in a statement: “No data information from the device is linked to a specific consumer, only the device.”

A patent filed by a Philip Morris subsidiary in 2009 suggests how communication with the smoker would work. It describes an iQOS-like device as having “an interface for establishing a communications link for uploading data to and downloading data from an Internet-enabled host.”

Gregory Connolly, a professor at Northeastern University in Boston who has studied iQOS technology and patents, said Philip Morris’ ability to gather user data could give the device remarkable power.

“What they’re going to have is a mega database of how Americans smoke,” he said. “Then they’ll be able to reprogram the current puffing delivery pattern of the iQOS to one that may be more reinforcing and with a higher addiction potential.”

Told about those comments, Philip Morris referred to remarks in January by its vice president for scientific and public communications, Moira Gilchrist.

“I can reassure that there’s no technology in there that’s intended to manipulate in any way what is delivered from iQOS,” Gilchrist told a panel of scientific advisers for the U.S. Food and Drug Administration (FDA).

The only time the company extracts data from the device, Philip Morris says, is when trying to figure out why there’s been a malfunction.

‘CAPTURE DATA’
Gilchrist told the FDA panel that iQOS delivers roughly the same level of nicotine as a standard cigarette. Philip Morris says the device’s nicotine delivery cannot be altered.

Gilchrist did say, though, that the company is able to “capture data,” such as the number of puffs taken on an iQOS, but doesn’t do so unless it’s necessary to examine a device that has a technical problem. The number of puffs by a user and smoking time per tobacco insert are automatically regulated by the device, she said.

The company says that by heating tobacco instead of burning it, the iQOS significantly reduces a user’s exposure to the levels of carcinogens and other toxic substances found in a regular cigarette. As a result, the company claims, the device “is likely to reduce the risk of smoking related diseases.”

The iQOS system uses cigarette-like inserts containing tobacco, branded in some markets as HeatSticks. They slide into a pen-size holder, equipped with a heating component called a “blade.” The device comes with a USB cord, and has Bluetooth wireless communication availability in some markets.

Philip Morris says iQOS is for smokers who would otherwise not quit. It is applying to the FDA for permission to market the device in America as being less harmful than cigarettes.

The panel of advisers at the FDA hearing in January voted its approval of a finding that scientific studies show switching completely from cigarettes to iQOS significantly reduces a smoker’s exposure to harmful chemicals. But it also found that Philip Morris had not demonstrated that the reduction is “reasonably likely” to result in a “measurable and substantial” reduction in disease and/or death.

A Reuters investigation published in December identified shortcomings in the training and professionalism of some of the lead investigators in the clinical trials that underpin the tobacco giant’s application to the FDA. Former Philip Morris employees and contractors described irregularities in those studies. Reuters did not find any evidence that the outcome of the experiments was manipulated or falsified.

Philip Morris said in a statement to Reuters that “all studies were conducted by suitably qualified and trained Principal Investigators,” researchers who oversee a clinical trial.

PATENTS FILED
In a letter in February, which mentioned Reuters’ findings, a group of 10 U.S. senators asked FDA Commissioner Scott Gottlieb to “avoid rushing” the approval of products such as iQOS “without requiring strong evidence that any such product will reduce the risk of disease, result in a large number of smokers quitting, and not increase youth tobacco use.”

The company has filed a series of patents related to electronic smoking devices. One such patent published in 2016 describes a mouthpiece with a sensor to measure the amount of nicotine byproduct in a user’s saliva and allows for remote adjustments to the device. Such changes would allow for the monitoring and controlling of the “maximum threshold” for the amount of nicotine that a user receives, according to the patent.

In a statement in December, Philip Morris said that patent “is not used in any of our products and we have no plans for it in the foreseeable future.”

At the January meeting of the FDA advisory panel, Gilchrist was quizzed on how the company is using Bluetooth, which provides for greater connectivity with iQOS users. She replied that it is used to remind consumers, for instance, when they have to clean their device or re-order HeatSticks so they didn’t run out and have to revert to regular cigarettes.

“You know, for example, a message may come up: ‘Hey, you haven’t used your iQOS device today,’” Gilchrist said. “Have you stopped smoking, or is it because you’ve gone back to combustible cigarettes?”

In Japan, which has more permissive tobacco marketing laws than many countries, Philip Morris is collecting user information through registrations for the device.

At a flagship boutique in Tokyo’s fashionable Harajuku district, where the word iQOS stretches down the side of a glass-encased building, customers were offered a discount on buying the device in exchange for signing up on the company’s iQOS website.

The company offered incentives on the website for people to register, including the iQOS discount. In doing so, potential customers were asked to enter a list of smoking preferences as well as the user ID for their Instagram social media account.

Philip Morris said in a statement that it does so “to ensure that these consumers can follow the iQOS Instagram account, which is closed and limited to age-verified consumers registered in the Philip Morris Japan iQOS consumer database.”

An internal Philip Morris handbook dated 2016 discussed approaches to social media. It gave examples of possible Facebook posts aimed at customers. “Did you know?” one suggested post reads. “Our newest version of iQOS can be connected to an app that’ll help you adjust to the product much quicker. Take it for a spin and learn more.”

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