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EXCERPTS FROM:

Philip Morris Deals Blow to Magazines With Decision to Pull Cigarette Ads

A big piece of the magazine industry just went up in smoke.

This week's decision by Phillip Morris Cos. to pull advertising for Marlboro and its other cigarette brands from dozens of magazines with substantial numbers of young readers could never be welcome news for publishers. But coming on top of mounting industry worries about slowing ad spending by troubled dot-com companies and the rising cost of winning magazine subscribers, Philip Morris's move is particularly troubling.

"I would imagine for the industry as a whole this would make a dent in the fender; you're talking about some pretty big bucks," said Carl Portale, senior vice president and publisher of Hachette Filipacchi's Elle magazine, one of the titles that will lose Philip Morris tobacco ads.

Philip Morris, the nation's largest tobacco company, spent $214.8 million on advertising its tobacco products in magazines last year, according to Competitive Media Reporting, which tracks ad spending. Philip Morris said it will stop placing ads in 42 magazines that have more than two million readers under 18 or have teen readership greater than 15%, as measured by independent market-research firms.

The move comes after state attorneys general began investigating whether cigarette makers were targeting young people in their advertising, in violation of a 1998 legal settlement between the states and the biggest tobacco companies.

Although not as significant as a decade ago, tobacco advertising is still big business for some magazines, especially broad, mass-market titles. Of the 10 largest recipients of cigarette advertising in the magazine industry, eight are set to lose Philip Morris's business.