We smell in two distinct ways; retronasally and orthonasally; which effects the way we perceive a substance.

Thanks to the connection between our mouth and our sinuses, we can sense odors that originate from substances in our mouth; this is called retronasal olfaction (see retro-haling), and it is particularly critical to the process of eating and gustation.  Retronasal olfaction has the benefit of being compounded with our sense of taste, so our sensations and perceptions are synergized.  

Orthonasal olfaction involves smelling odors that travel directly through our nose to the olfactory nerves; this can be focused by wafting the stream of cigar/pipe smoke under your nose.  Those smells delivered directly through the nose (orthonasal) can be more pronounced and/or nuanced than those delivered through the mouth (retronasal).   Ultimately, both types of olfaction are important to experience the complexities and true flavors of great smoke.