Juul’s Silicon Valley marketing tactics are to blame for its troubles, says longtime advertising exec Alex Bogusky

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Juul’s Silicon Valley marketing tactics are to blame for its troubles, says longtime advertising exec Alex Bogusky

Category : entrepreneur

  • This week, the leading e-cigarette maker Juul Labs announced its CEO would step down amid investigations by federal agencies and said it would suspend all advertising.
  • Several of those investigations focus on the brand’s marketing practices, and the longtime ad exec and anti-smoking activist Alex Bogusky blamed the company’s Silicon Valley-style approach for its problems.
  • Bogusky said Juul, like other startups, pushed for growth at any cost by positioning itself as a tech company to avoid federal regulations on tobacco-derived products.
  • Two sources said DDB struggled to staff up on the Juul account because some creatives and strategists didn’t want to be associated with the brand.
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Just two months ago, Juul Labs was still on a venture-capital-fueled high. Now, with the company facing an uncertain future, the 30-year ad veteran Alex Bogusky attributed its apparent fall to a marketing strategy ripped straight from the Silicon Valley playbook.

With a $12.8 billion investment from the tobacco giant Altria and a $38 billion valuation, Juul’s US ad budget exploded to $104 million in the first half of 2019 from $1.4 million in the year-ago period, according to Kantar Media.

Read more: E-cigarette company Juul raised billions to pursue global domination, but a rash of challenges is raising questions about its strategy

To solidify its position as market leader, Juul hired the Omnicom-owned agency DDB to produce its “Make the Switch” ads and built up an internal team led by Chief Marketing Officer Craig Brommers, formerly of Gap Inc., and creative director Perry Fair, who’d been with Red Bull and Beats by Dre.

Earlier this week, the company agreed to suspend all advertising amid a crackdown on vaping by the Federal Trade Commission and the US Food and Drug Administration.

Juul bypassed federal regulators by calling itself a tech company, the executive behind anti-smoking campaign Truth Initiative said

Alex Bogusky, who is the cofounder and chief creative engineer at the ad agency Crispin Porter Bogusky and who launched the anti-tobacco Truth Initiative campaign in 1998, said Juul rapidly rose by exploiting a regulatory loophole and positioning itself as a tech company to avoid rules that applied to other tobacco-derived products and prescription-only anti-smoking aids like gums and patches.

“[Juul] wound up in this happy place where they could advertise, and they did so aggressively,” he told Business Insider. “They’re not a cessation product, they never filed to be a cessation product, so the FDA doesn’t regulate them the way they would a cessation product.”

Bogusky said Juul adapted the same philosophy as pseudo-medical startups like Theranos, which initially succeeded in bypassing federal regulators because “they’ll just take your word for it unless it’s proven otherwise.”

As the company expanded, and reports of vaping-related illness increased, the FDA and Congress took notice. In a series of letters sent to four top e-cigarette producers this week, Rep. Raja Krishnamoorthi of Illinois called Juul’s marketing tactics illegal, specifically because the company did not receive federal approval to claim that its products help smokers quit.

According to a study published by Stanford in January, the brand also actively targeted teenagers with ads like the ones below.

Screen Shot 2019 09 27 at 1.00.46 PM


Bogusky said private-equity- and venture-capital-backed startup models encourage this sort of behavior because Juul had to grow sales, even though its self-defined customer base of adult smokers was shrinking.

The company’s decision to target teens created an ethical issue for the ad industry

The brand recruited young influencers, advertised on Instagram, sponsored summer camps, and held presentations in high schools in which representatives described its products as “totally safe”Ā in a strategy reminiscent of past tobacco campaigns that featured doctors smoking cigarettes.

Juul later said it had abandoned those tactics, but its fastest-growing market continued to be young people, even as its ads shifted to focus on older smokers.

“The message to a teen is, ‘You can’t be hurt by this,’ but for some reason, it’s something held out for adults only,” Bogusky said. “And that message is really provocative.”

Bogusky wrote a New York Times op-ed in May that called Juul’s marketing an ethical issue for the ad industry.

Two sources familiar with the business told Business Insider on condition of anonymity that DDB has struggled to staff up on the Juul account despite actively recruiting for that team in its San Francisco office because some creatives and strategists do not want to be associated with the brand. DDB and Omnicom declined to comment.

Bogusky said he understood why agencies would work with such companies, especially when the client positions its products as a safe alternative to cigarettes. “We’re a desperate industry,” he said.

He said the FDA should treat e-cigarette marketing the same way it treats ads for tobacco or prescription cessation products. Regulators seem to be moving in that direction, though unintended consequences could follow. BuzzFeed reported that some smoking experts fear an all-out vaping ban could end up boosting cigarette sales.

Juul did not respond to a request for comment.


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Sammy Singh

Global VC, Founder, and entrepreneur extraordinaire as featured in Inc. Magazine, Bloomberg, and Forbes. Sammy Singh is a graduate of UCLA and Wharton School of Business as well as a former student of Loyola University of Chicago. Sammy is best known as a renowned financial technology global entrepreneur and has founded over 26 different firms across industry and all over the world. He is a venture capitalist,a TV/ Film actor, tax specialist, and marketing solutions strategist. Connect with Sammy Singh on social media below!

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