As I remember it, they were in a stale-mate. The market was pretty much divided up. Most people were loyal to their brand and that was that. Despite that, they were spending a massive amount of money on advertising even though their market shares remained unchanged.
The reason was that if one of them stopped funnelling massive amounts of cash into advertising, they would lose a big chunk of their market share to the others. So they were all paying mostly to maintain the status quo.
With the ban on advertising, the amount of money saved greatly outweighed the revenue lost as others couldn't advertise either so it really only affected new smokers rather than convince current smokers to switch brands.
I see a similar thing happening in my line of work. In our niche of e-commerce every player of importance works with the same online marketing networks and paying rather a lot per sale or click.
There's a whole lot of sites out there which basically exist to infest organic search results, send traffic to us and our competitors and collect their referral fee from the advertising network. They add no value[1]. Without them, the customer would have been similarly divided amongst the competition as well without having to pay for it. Yet, if we stop paying them, we'll lose a lot of business as our competitors will continue to do so.
Disclaimer: this is all as I understand it and in no way my employers opinion or persepctive ;)
1) Some do, by providing extra information or ranking the shops by what's best for the consumer (price, reviews) rather than the most cash-per-click.