147

Chapter 4 

Activities of the E-Cigarette Companies

Introduction 149

Manufacturing and Price 149

Overview of the E-Cigarette Market in the United States 149

Distribution and Purchase Channels 149

Product Evolution 151

Evolution of Market Share in the E-Cigarette Market 152

E-Cigarette Sales in Tracked Retail Outlets 152

Production of E-Liquids 154

Impact of E-Cigarette Price on Sales and Use of These Products 155

Trends in E-Cigarette Prices over Time 155

Impact of E-Cigarette Prices on E-Cigarette Sales 156

Marketing and Promotion of E-Cigarettes 157

Marketing Expenditures 157

Magazine and Print Advertising 158

Television Advertising to Youth and Young Adults 159

Sponsorships 159

Digital Landscape for E-Cigarettes 163

E-Cigarettes in the Retail Environment 167

Conventional Tobacco Retailers (Convenience Stores, Pharmacies, Tobacco Shops) 167

“Vape Shops” 168

Exposure and Receptivity to Advertising for E-Cigarettes 169

Exposure 169

Receptivity to Advertising 169

Effect of E-Cigarette Advertising on Behavior 170

Associations with E-Cigarette Use and Intentions to Use 170

Associations with Knowledge, Risk Perceptions, and Other Attitudes 171

Evidence Summary 172

Conclusions 172

References 173

Activities of the E-Cigarette Companies 149

E-Cigarette Use Among Youth and Young Adults

Introduction

This chapter focuses on the companies that 

are active in the production, distribution, or marketing 

of e-cigarettes in the United States and examines the 

potential influence of these companies on the use of 

e-cigarettes, particularly among youth and young adults. 

The e-cigarette marketplace is complicated by the fact that 

some brands and devices are owned by tobacco companies, 

while others are independently owned. This chapter will 

refer to the e-cigarette companies as a whole but, when 

necessary, will distinguish between the e-cigarette brands 

that are owned by tobacco companies and others that are 

independently owned. The chapter covers manufacturing 

and price, marketing and promotional activities, the retail 

environments for e-cigarette products, exposure to marketing and receptivity to such activity, and the effects of 

e-cigarette marketing activities on consumer behavior.

Manufacturing and Price

As discussed in Chapter 1, although the concept 

of e-cigarettes was initially introduced in the 1960s, the 

first-generation version of e-cigarettes was not developed and commercialized until the mid-2000s (Grana 

and Ling 2014). In the short period since the first appearance of e-cigarettes, the exponential growth in awareness 

and use of these products (Centers for Disease Control 

and Prevention [CDC] 2015), the rapid product development (Zhu et al. 2014), and the rapid evolution of both 

the e-cigarette market and the industry itself (Huang 

and Chaloupka in press) have been unprecedented. 

E-cigarettes were recently named a “disruptive innovation” that may change the existing tobacco market and 

displace conventional (combustible) cigarettes in a foreseeable timeframe (Spielman and Azer 2013).

Consumer demand for a less harmful alternative to 

conventional cigarettes and the implementation of macro 

policies, such as those that restrict cigarette use or mandate clean indoor air, may influence the use of e-cigarettes 

(Pepper et al. 2014b; Rose et al. 2014). However, e-cigarette 

companies may play a critical role in shaping the market, 

affecting everything from the development and innovation 

of new products and brands to the manufacture, distribution, marketing, promotion, and pricing of the product—

activities that parallel those in the cigarette industry.

This section describes and summarizes both the 

rapidly changing e-cigarette market and the activities 

of e-cigarette companies in the United States, providing 

a broad overview of the major players. These participants 

include the major tobacco companies and other manufacturers. The chapter also addresses how the companies 

influence the e-cigarette market in the United States, 

focusing on the impact of product development and innovation, distribution channels, product availability, and 

pricing strategies, as well as the role of e-cigarette trade 

organizations and partnerships.

Overview of the E-Cigarette Market 

in the United States

For 2014, the value of the e-cigarette market in the 

United States was estimated at $2.5 billion: 40% ($1.0 billion) was for cigarette-like e-cigarettes (cigalikes), and 

60% ($1.5 billion) was for tank-style e-cigarettes, mods, 

and other types of “vaporizers” (Wells Fargo Securities 

2015a) (Table 4.1). The market was projected to grow 

to $3.5 billion, a rise of 40%, in 2015 (Rose et al. 2014) 

(Table 4.2). Total sales of e-cigarettes in convenience, food, 

drug, and big-box stores (such as Walmart), which are 

tracked by commercial market research companies (such 

as Nielsen), were estimated to be $900 million in 2014. 

There was an additional estimated $500 million in online 

sales, and $1.1 billion in sales in “vape shops” and other 

channels, which are not currently tracked by commercial market research companies (Table 4.1) (Wells Fargo 

Securities 2015b).

Distribution and Purchase Channels

E-cigarettes entered the U.S. market around 

2006–2007, and since that time the distribution and purchase channels for these products have evolved greatly. 

Initially they were sold exclusively by Internet retailers, 

but then selling activity expanded to shopping mall kiosks 

and conventional retail outlets and, more recently, to 

“vape shops” and some pharmacies (Rose et al. 2014; Lee 

and Kim 2015). 

Some companies operating in the U.S. market have 

their own manufacturing facilities in this country, but 

companies generally import parts or even complete products from abroad, almost exclusively from China (Barboza 

2014). Manufacturers and importers distribute their products via a wide number of channels, such as the companies’ 
A Report of the Surgeon General

150 Chapter 4

own e-commerce websites and/or retail outlets. In 2010, 

the most popular channels for selling e-cigarettes and 

their accessories directly to consumers were websites and 

third parties, such as retail outlets (Linarch Information 

Solutions 2012). Many e-cigarette manufacturers and 

importers, including the big-brand companies and those 

supplying products to “vape shops,” rely on distributors 

and retailers to deliver the products to the consumer 

(Linarch Information Solutions 2012).

Table 4.1 Estimated e-cigarette market size in 2014 ($ billion)

Convenience, food, drug, 

and big-box stores Online

Other channels (“vape shops” and 

other untracked retail channels) Total

E-cigarettes 0.6 0.2 0.2 1.0

Vapors/tanks/mods 0.3 0.3 0.9 1.5

Total 0.9 0.5 1.1 2.5

Source: Wells Fargo Securities (2015a).

Table 4.2 Estimated e-cigarette market size in 2015 ($ billion)

Convenience, food, drug, 

and big-box stores Online

Other channels (“vape shops” and 

other untracked retail channels) Total

E-cigarettes 0.7 0.4 0.4 1.5

Vapors/tanks/mods 0.4 0.4 1.2 2.0

Total 1.1 0.8 1.6 3.5

Source: Wells Fargo Securities (2015a).

The emergence of e-cigarette devices and products 

resulted from the endeavors of a few entrepreneurs and 

widespread Internet and television advertising (Grana et al. 

2013; Rose et al. 2014). It is noteworthy that the product 

class took hold when e-commerce was rapidly expanding 

in the United States, and major social media platforms—

such as Facebook (founded in 2004), YouTube (2005), and 

Twitter (2006)—were emerging. In such an environment, 

information about a new product like e-cigarettes could be 

rapidly disseminated across geographic boundaries, and 

new products and technologies could be speedily adopted. 

This process is partly reflected by the Google search 

volume of queries related to e-cigarettes; the volume of 

queries surpassed those for nicotine replacement therapy 

products and snus by 2008 (Ayers et al. 2011).

Manufacturers noticed the fast rise in consumer 

interest in e-cigarettes, so they quickly pushed to expand 

the sale of their products to brick-and-mortar retail stores. 

Sales of cigalikes and related products were first observed 

in Nielsen’s store-scanner database in 2007, and between 

2009 and 2012, retail sales of e-cigarettes expanded to all 

major markets in the United States (Huang and Chaloupka 

in press). This growth coincided with a surge in marketing expenditures by the e-cigarette companies across 

all media platforms (Kim et al. 2014; Kornfield et al. 

2015). The products sold in these conventional channels 

were predominantly disposable and rechargeable cigalikes 

(Giovenco et al. 2015; Huang and Chaloupka in press), but 

retail stores started to carry tank-style e-cigarette devices 

as well (CSP Daily News 2014; Giovenco et al. 2015).

Today, e-cigarette brands, such as MarkTen (manufactured by Altria) and VUSE (manufactured by Reynolds 

American Inc.), are available in more than 70,000 retail 

stores across the country, and their availability is expanding 

rapidly (Wells Fargo Securities 2014b). E-cigarettes were 

more likely to be available in retail locations in neighborhoods with a higher median household income and 

a lower percentage of African American and Hispanic residents; these sales patterns are consistent with patterns 

of use of these products observed among youth, young 

adults, and adults more generally (see Chapter 2). Notably, 

the price of conventional cigarettes and the existence of 

comprehensive smokefree laws were inversely associated 

with the availability of e-cigarettes (Rose et al. 2014).

Through growth in their sales, tank-style e-cigarettes 

(also known as mods) and advanced personal vaporizers 

(APVs) have begun to play an increasingly important role 

in the e-cigarette market (Wells Fargo Securities 2015a). 

“Vape shops,” which provide a range of e-cigarette devices 

and products, have emerged as the primary retail channel 

for consumers seeking such products (Lee and Kim 2015). 

Unlike conventional retail outlets, “vape shops” sell a wide 

range of more complex and powerful tank-style e-cigarettes 
Activities of the E-Cigarette Companies 151

E-Cigarette Use Among Youth and Young Adults

and many different types of liquids for e-cigarette devices 

(e-liquids or e-juices) (Sussman et al. 2016).

The rise of “vape shops” can be attributed to a number 

of factors. First, in the past, most of these establishments 

offered a wide range of e-cigarettes and e-liquids, allowed 

users to sample different types of flavored e-liquids at 

no cost, and permitted the trial use of various types of 

e-cigarettes. Most of these establishments sell products 

made by independent companies, as opposed to products 

manufactured by the major conventional tobacco companies (Kamerow 2014; Sussman et al. 2016). As a result, 

“vape shops” can serve as an information hub where consumers can easily obtain knowledge about (and gain 

experience with) a wide range of e-cigarettes and related 

products (Sussman et al. 2016). However, the information 

provided may be misleading or misinterpreted (Cheney 

et al. 2016). Second, unlike traditional retail outlets, “vape 

shops” are usually equipped to provide consumers with 

individualized information about how e-cigarette products can be used to best satisfy the user’s preferences; 

this capability may be important as e-cigarette products 

become more diversified and sophisticated. Because of 

the diversity of these products, some of these establishments provided free samples of different flavored e-liquids 

and allowed trial use of different e-cigarettes before actual 

purchase in an attempt to compete with traditional retail 

outlets. Under the deeming rule published in May 2016, 

free samples of e-liquids containing nicotine were banned 

(Federal Register 2016). Third, “vape shops” serve as a 

place for e-cigarette users to socialize.

Some “vape shops” also host various events, 

including competitions (also known as cloud chasing), 

that build loyal customer bases by creating a sense of community and camaraderie among customers (Sussman et al. 

2014; Cheney et al. 2015; Lee and Kim 2015). Additionally, 

a 2015 study of “vape shop” owners found that customers 

view the owners as important sources of health information, which could include information related to cessation (Cheney et al. 2016). However, the owners reported 

(a) obtaining their information from YouTube or industry 

sources but finding the research hard to understand and 

(b) looking for government sources but not finding them. 

Estimates of the number of “vape shops” in the 

United States have varied greatly due to the lack of a clear 

definition of what constitutes such an establishment. 

The low end of these estimates puts the number around 

3,500 (Klein 2013; Lee and Kim 2015), while intermediate estimates indicate that there are about 6,000–15,000 

“vape shops” in this country (Bour 2015; Wells Fargo 

Securities 2015b). One high estimate is that in 2014 there 

were as many as 35,000 such shops in the United States 

(Kamerow 2014).

Product Evolution

E-cigarette products have evolved and diversified 

rapidly since they entered the U.S. market (see Chapter 1). 

Detailed information about different types of e-cigarette 

products has been presented elsewhere (Grana et  al. 

2014). Over time, with consolidation of e-cigarette companies and technological improvements, the manufacturing process has become more standardized, enabling 

the production of e-cigarette products with a more effective and more consistent dose and delivery of nicotine and 

flavorings, and a more consistent generation of aerosol 

(Goniewicz et  al. 2013a,b; Farsalinos and Polosa 2014; 

Saitta et al. 2014).

Many e-cigarette manufacturers make multiple 

types of e-cigarette products. For example, the NJOY brand 

has not only disposable and rechargeable cigalikes but also 

tank-style e-cigarette devices, which are larger than cigalikes and include options for refills and batteries. In addition, NJOY sells a variety of flavored e-liquids, although 

in California, flavors appealing to minors (e.g., strawberry 

and cookies and cream) are prohibited (State of California 

v. Sottera, Inc. 2010). Within each product type, there 

are many different brands, albeit the brands are often 

very similar. For example, NJOY, blu, Logic, Mistic, and 

many other brands of rechargeable e-cigarettes differ very 

little from each other with regard to the flavors and types 

of products offered (e.g., cigalike, tank style) (Zhu et al. 

2014). A study examining the growth of brands and flavors 

between 2012 and 2014 found that older brands were more 

likely to involve cigalikes, while newer brands were more 

likely to offer tank-style devices and mods (Zhu et al. 2014).

As tank systems and mods become more popular, the 

distinction between a closed system and an open system 

becomes more important. In a closed system, components 

cannot be customized. In this case, the e-liquid is “locked 

in”; the amounts of e-liquid, level of nicotine, and flavors 

are dictated by the manufacturer. Because users cannot mix 

their own e-liquids or refill the cartridges or tanks, there 

is less risk of spillage, nicotine overdose, and accidental 

ingestion. In addition, users cannot change the power 

source, adjust the voltage, or customize the atomizers. 

Many brands offer only closed-system devices (e.g., Vype, 

Vapestick, and FIN). Most cigalikes are closed systems, sold 

primarily online or in conventional retail outlets, and are 

favored by the larger e-cigarette companies, likely because 

of the high profit margins from the e-liquid refill cartridges 

and the nature of the distribution paths.

Open systems, in contrast, allow for personalization and customization: Users can mix their own e-liquid, 

choosing different e-liquid bases, flavors, and nicotine 

concentration levels. Users can also adjust the voltage, 

customize the atomizers, and/or modify the aesthetics and 
A Report of the Surgeon General

152 Chapter 4

shapes/sizes of their devices (Popken 2014; Richtel 2014c; 

Lee and Kim 2015). Tanks and mods/APVs are open systems 

sold primarily in “vape shops” or online. While research 

has demonstrated that more-experienced e-cigarette users 

prefer open system mods (Farsalinos et al. 2014), one analyst has suggested that closed systems may better facilitate 

consistent and enforceable product and manufacturing 

standards (Wells Fargo Securities 2014a).

Beyond the increased variety over time of products, 

their components, and related products (including accessories such as carriers, lanyards, stickers, and sleeves), 

the products continue to appeal to consumers through 

the incorporation of increasingly complex technologies—

including location tracking; Bluetooth connectivity; 

social networking functions and integration with users’ 

social media accounts; and entertainment functions, such 

as playing music and videos (Bauld et al. 2014; Brown and 

Cheng 2014; Honig 2014).

The terminology for e-cigarettes has also expanded. 

Terms such as e-cigars, e-hookahs, vaping pens, hookah 

pens, and personal vaporizers are used interchangeably (or preferentially) by some users (Richtel 2014b). 

In addition, the spectrum of use has broadened, as some 

e-cigarettes that involve open systems are also used for the 

aerosolization of marijuana and cannabis oil (Bryan 2014; 

Morean et al. 2015) and could be adapted for other illicit 

substances (see Chapter 2).

Worldwide, more than 95% of e-cigarettes sold are 

thought to have been manufactured in China (Jourdan 

2014), most in one city—Shenzhen (Barboza 2014). A few 

large manufacturers (e.g., Joyetech, Kimree, and First 

Union) dominate the market (see Appendix 4.1 for descriptions of the major e-cigarette manufacturers).1

1All appendixes and appendix tables that are cross-referenced in this chapter are available only online at http://www.surgeongeneral.gov/

library/reports/.

 Most of 

these manufacturers provide supplies to many different 

e-cigarette companies, including American companies 

marketing conventional cigarettes, as well as independent 

e-cigarette companies. Some companies (e.g., Gamucci) 

have an exclusive manufacturer in Shenzhen.

Some e-cigarette companies have begun to locate 

their manufacturing base in the United States. Reynolds 

American, for example, has a factory in Tobaccoville, 

North Carolina, to manufacture its VUSE brand and 

strongly emphasizes this location as part of its marketing 

strategy (CSP Daily News 2015). White Cloud, another 

U.S.-based company, moved its cartridge-filling production from China to Tarpon Springs, Florida, in May 2014 

(McConnell 2014), and the U.S.-based brand Mistic has 

announced plans to move its manufacturing from China 

to Greenville, North Carolina (Bettis 2014).

Evolution of Market Share in the E-Cigarette 

Market

Although the e-cigarette market in the United States 

has changed significantly since its emergence, these 

changes have not been studied extensively. This section 

documents market share by brand for e-cigarette sales 

in retail outlets tracked by Nielsen, using data from the 

forthcoming study by Huang and Chaloupka (in press) 

and supplemented with data from industry reports issued 

by a number of investment banks. These data, available 

in Appendix 4.5, clearly show the dynamic changes in the 

e-cigarette market, and these changes are important to 

understand in terms of access to and marketing of these 

products to youth and young adults.

E-Cigarette Sales in Tracked Retail Outlets

Total sales of e-cigarettes in tracked retail channels 

have surged exponentially since 2010, increasing from 

only a few million dollars per quarter in 2010 to more 

than $170 million in the last quarter of 2014 (Figure 4.1). 

Although Reynolds American’s VUSE brand did not 

enter the market until late 2013, its sales climbed rapidly in 2014 because of heavy promotion and price discounts. At the end of 2014, VUSE had become the market 

leader with the highest quarterly sales at $56 million. Blu 

(owned by Lorillard and thus now by Imperial Tobacco) 

was the market leader for most of 2013 and 2014, with an 

average $60 million in quarterly sales. During this time 

the number of its distribution points rose from 60,000 to 

more than 150,000 because of its acquisition by Lorillard 

and subsequent marketing and promotion efforts.

After doubling every year between 2010 and 2013 

(Figure 4.2) in the tracked retail channels, rates of 

increase in the sales of e-cigarettes decelerated significantly, with total sales actually declining in the second 

quarter of 2014. The deceleration may reflect, in part, the 

shift away from cigalikes to tank-style devices, mods, and 

other e-cigarette products among users; the sales of these 

devices are not tracked as well, which makes it difficult to 

know the true trends in sales (see Tables 4.1 and 4.2).

Figure 4.2 presents sales data by product type. Sales 

of disposable e-cigarettes trended upward from 2010 

to 2013, increasing from a minimal amount in 2010 to 

almost $100 million in the second quarter of 2013, but 

2014 showed a substantial decline, with the value only 

about $50 million for the final quarter of that year. The 

figure shows a clear pattern of seasonality in sales for 

disposables: sales usually rose in the first quarter of the
Activities of the E-Cigarette Companies 153

E-Cigarette Use Among Youth and Young Adults

Figure 4.1 E-cigarette sales in tracked channels by brand, 2010–2014

Source: Huang and Chaloupka (in press).

Note: Data points for this figure are shown in Table A4.4-1 in Appendix 4.4.
A Report of the Surgeon General

154 Chapter 4

year—potentially reflecting the effect of New Year’s resolutions among smokers who seek to use rechargeable 

e-cigarettes as a way to quit conventional cigarettes—

but had subsequently declined during the rest of the year. 

Sales of e-liquid refills increased steadily over the 4-year 

period between 2010 and 2014 and reached $80 million in 

the final quarter of 2014, representing approximately half 

of the total e-cigarette sales in the tracked retail channels.

Figure 4.2 E-cigarette sales in tracked channels by product type, 2010–2014

Source: Huang and Chaloupka (in press).

In 2014, more than 85% of e-cigarette sales occurred 

in the tracked retail and online channels, including certain convenience stores and food, drug, and big-box stores 

(Wells Fargo Securities 2015a; see Table  4.1). It  was 

estimated that 20% of all e-cigarette sales (including 

e-cigarettes and tanks/mods) in 2014 occurred online, 

while 44% of all e-cigarette sales occurred in “vape 

shops” and other untracked retail channels (Wells Fargo 

Securities 2015a; see Table 4.1).

Another important trend in e-cigarette sales is the 

growth of flavored products. Although some brands, such 

as NJOY, initially did not sell flavored e-cigarette products, 

most companies now offer some form of flavored varieties. 

Giovenco and colleagues (2015) found that sales of menthol-flavored e-cigarettes in traditional U.S. retail channels (e.g., convenience stores, grocery stores, pharmacies, 

and mass merchandisers) more than doubled between 

2012 and 2013, increasing from $96.4 million in 2012 to 

$215.7 million in 2013. Sales of fruit-flavored e-cigarettes 

more than tripled during the same period, from $4.9 million to $16.7 million.

Sales of different types and brands of e-cigarettes 

likely differ by demographic group. For example, anecdotal evidence suggests that youth and young adults prefer 

pen-style devices, those that come in various shapes and 

styles, and devices that may be used interchangeably with 

e-hookahs (Richtel 2014b). Research also suggests that 

users may eventually graduate to more complex systems; 

more specifically, experienced users may be more likely to 

use tanks and mods (Farsalinos et al. 2014). Unfortunately, 

sales data by demographics are very limited, and studies 

have not yet examined how sales of e-cigarette products 

differ by demographic classification.

Production of E-Liquids

E-liquids used in closed-system devices usually are 

produced in the United States and then shipped to China 

to be included in the assembly process. For example, 

MarkTen, blu, and NJOY manufacture their own e-liquids 

in the United States, which then are sent to China before 

the final product is assembled there.

In the United States, one of the biggest players in 

the premixed e-liquid market for refillable e-cigarettes is 

Johnson Creek Vapor Company (2011), which claims to 

be the world’s leading manufacturer of e-liquid and the 

first company to produce and manufacture e-liquid in the 

United States. Johnson Creek has not disclosed the suppliers of its nicotine solution.
Activities of the E-Cigarette Companies 155

E-Cigarette Use Among Youth and Young Adults

Impact of E-Cigarette Price on Sales 

and Use of These Products

This section summarizes the limited evidence on 

the impact of e-cigarette prices on the sales and consumption of these products. The sizable body of research examining the effects of taxes and prices on the sale and use 

of conventional cigarettes (Chaloupka and Tauras 2011; 

International Agency for Research on Cancer 2011) leads 

to the conclusion that price increases resulting from 

higher excise taxes are effective tools for reducing cigarette consumption, especially among youth.

Trends in E-Cigarette Prices over Time

A study by Huang and Chaloupka (in press) documented and analyzed the relationship between real price 

and sales volume for both disposable and rechargeable 

e-cigarettes by using Nielsen data, which reflected the 

e-cigarette (predominantly cigalikes) sales and prices in 

retail stores tracked by Nielsen.

Figure 4.3 presents U.S. data on real price (determined by adjusting the prices to the value of the U.S. dollar 

in the fourth quarter of 2014) and sales volume for disposable e-cigarettes between 2010 and 2014 based on data from 

Huang and Chaloupka (in press). The average price for a 

single disposable e-cigarette declined from approximately 

$17 in the first quarter of 2010 to less than $9 in 2014. 

In terms of volume, the estimate for disposables increased 

from far below 100,000 in the first quarter of 2010 to 

almost 11 million in the first quarter of 2014, before dropping to about 6.3 million in the final quarter of 2014. This 

graph reveals an association between real price and the 

sales volume for disposable e-cigarettes from 2010 to the 

second quarter of 2013: As real price declined over time, 

sales volume increased. Looking back, the rapid decline in 

the price of disposable e-cigarettes between 2007 and 2011 

(Huang and Chaloupka in press) may have occurred because 

of improvements in product technology and industry promotion, which significantly cut the costs of producing such 

products (Bhatnagar et al. 2014; Wells Fargo Securities 

2015c). The rather modest declines in prices since 2011 

may reflect the fact that further technological improvements became less feasible (Wells Fargo Securities 2015c).

Figure 4.3 Sales volume and price of disposable e-cigarettes, U.S. market, 2010–2014

Source: Huang and Chaloupka (in press).

In terms of volume, the substantial decrease in 2014 

may be partly attributable to consumers shifting away 

from cigalikes to tanks, mods, and other more powerful 

devices, for which sales were not tracked well.

An inverse relationship is also evident between 

real price and sales volume for rechargeable e-cigarettes. 

Figure 4.4 demonstrates that when the real price went 

down, the sales volume increased, particularly after 

2012. Between 2010 and 2014, the average unit price for 

rechargeables decreased markedly, dropping from $37 

in the first quarter of 2010 to $12 at the end of 2014. 

However, there were more price fluctuations than were 

found for disposable e-cigarettes (Figure 4.3). The price 

fluctuations for rechargeables were likely because of the 
A Report of the Surgeon General

156 Chapter 4

change in product mix and the influx of various new types 

and brands of these devices during this period (Bhatnagar 

et al. 2014; Wells Fargo Securities 2015c). Sales volume 

increased dramatically between 2010 and 2014, rising 

from a minimal amount at the beginning of 2010 to about 

3 million units in the last quarter of 2014.

Figure 4.4 Sales volume and price of rechargeable e-cigarettes, U.S. market, 2010–2014

Source: Huang and Chaloupka (in press).

Impact of E-Cigarette Prices on E-Cigarette Sales

In one of the first studies to explore the effects of 

e-cigarette prices on the sales of these products, Huang 

and colleagues (2014b) estimated, from Nielsen data, 

both the own-price elasticity and the cross-price elasticity 

of demand for e-cigarettes (disposable or rechargeable) 

and studied the impact of conventional cigarette prices 

and smokefree policies on e-cigarette sales. Own-price 

elasticity is a measure showing how much demand for a 

product will change given a change in its price, while crossprice elasticity is a measure showing how much demand 

for a product will change given a change in another product’s price. Using data from Nielsen’s commercial retail 

store scanning service, this study employed fixed-effects 

models to estimate elasticity of demand and associations between e-cigarette sales and either the prices of 

conventional cigarettes or smokefree policies from 2009 

to 2012. Results demonstrated (a) that e-cigarette sales 

were quite responsive to own-price changes (estimated 

own-price elasticities for disposable e-cigarettes centered 

around −1.2 [a  10%  increase in price would decrease 

sales by 12%], while those for rechargeable e-cigarettes 

were approximately −1.9 [a 10% increase in price would 

decrease sales by 19%]) and (b) that disposable e-cigarettes 

appeared to be emerging as substitutes for rechargeables (a 10%  increase in rechargeable e-cigarette prices 

increased sales of disposable e-cigarettes by about 5%). 

This study concluded that policies increasing the retail 

prices of e-cigarettes—such as imposing taxes or limiting rebates, coupons, and discounts—could potentially 

lead to significant reductions in e-cigarette sales and that 

variations in tax policy by product type could lead to substitution between product categories. It is important to 

note that “vape shops” were not included in these data, as 

Nielsen collects data only from convenience, food, drug, 

and big-box stores.

Although these results provide evidence that 

changing the price of e-cigarettes affects the number 

sold, the potential effects of the price of conventional 

cigarettes on the purchase of e-cigarettes are less clear. 

Huang and colleagues (2014b) found no consistent or 

statistically significant relationship between the price of 

conventional cigarettes and the sale of e-cigarettes. In 

contrast, Grace and colleagues (2015), who measured the 

cross-price elasticity of e-cigarettes and conventional cigarettes using simulated demand for the latter in a sample 

of New Zealand smokers, found that the cross-price elasticity of e-cigarettes was significantly positive, suggesting 

that e-cigarettes may be partially substitutable for conventional cigarettes. Thus, the use of e-cigarettes may 

increase as the price of conventional cigarettes increases.
Activities of the E-Cigarette Companies 157

E-Cigarette Use Among Youth and Young Adults

Other evidence suggests that the potential impact 

of price changes on the use of e-cigarettes may differ by 

demographic characteristics. Relationships between the 

smoking of conventional cigarettes and socioeconomic 

status (SES) are well documented in the literature, and 

additional evidence has demonstrated that youth and 

young adults, and those with low SES, tend to exhibit 

higher sensitivity to changes in the price of conventional 

cigarettes (International Agency for Research on Cancer 

2011; U.S. Department of Health and Human Services 

[USDHHS] 2012). Therefore, youth and young adults, as 

well as low-SES persons, may be more price-sensitive in 

the purchase of e-cigarette products, and thus they may 

be more likely to stop using e-cigarettes as their price 

increases. These potential connections between the price 

of e-cigarettes and their use should be examined carefully 

as more data become available. 

Marketing and Promotion of E-Cigarettes

Marketing is an important tool for industries to use 

in influencing consumer preferences, and the potential 

for marketing to influence smoking behaviors has been 

a source of public health concern for many years (DiFranza 

et al. 1991; USDHHS 2000, 2012; National Cancer Institute 

[NCI] 2008). Research has demonstrated a causal relationship between tobacco marketing and smoking, with the 

majority of research focusing on the impact of tobacco 

marketing on the initiation of smoking by youth (Biener 

and Siegel 2000; USDHHS 2012). For adolescents, studies 

have found cross-sectional and longitudinal associations 

between the intensity of cigarette marketing and initiation 

of smoking, brand awareness, brand preferences, attitudes 

toward smoking, susceptibility to smoking, and smoking 

behaviors (O’Connell et al. 1981; Chapman and Fitzgerald 

1982; McNeill et al. 1985; Charlton 1986; Potts et al. 1986; 

Aitken et al. 1987; Goldstein et al. 1987; Aitken and Eadie 

1990; Botvin et al. 1991; DiFranza et al. 1991; Klitzner et al. 

1991; Pierce et al. 1991; Botvin et al. 1993; Hastings et al. 

1994; Pierce et al. 1994; Coeytaux et al. 1995; Evans et al. 

1995; Pierce and Gilpin 1995; Richards et  al. 1995; Slade 

et al. 1995; Unger et al. 1995; Pollay et al. 1996; Schooler 

et al. 1996; Gilpin and Pierce 1997; Lam et al. 1998; Feighery 

et al. 2006). A review of these and other studies led the 2012 

Surgeon General’s report to conclude that exposure to advertising causes the initiation of smoking (USDHHS 2012).

In general, product marketing is designed to 

inform people about the products being offered (and thus 

develop brand “awareness”) and to persuade people to 

buy particular brands (i.e., develop brand “preference”). 

Branding is particularly important for products considered to be “commodities,” such as conventional cigarettes and e-cigarettes, where the offerings are similar 

and branding differentiates the products (Rossiter and 

Bellman 2005; NCI 2008). Marketing is particularly critical for e-cigarettes, as new products must be introduced 

to potential users (Sethuraman et al. 2011).

Like marketers of conventional cigarettes, marketers of e-cigarettes use a number of channels and tactics 

to advertise and promote their products. These channels have included extensive marketing on the Internet 

and advertising in mainstream media, including popular 

magazines, retailer point-of-sale ads, product placement 

on popular media, and even television commercials—

an advertising option unavailable to cigarette manufacturers because of regulatory policies (Legacy for Health 

2014; Ganz et al. 2015). E-cigarette brands also use websites to interact directly with their customers through 

direct-to-consumer marketing (e.g., direct mail and direct 

e-mail) and social media channels, such as Facebook, 

Twitter, and Instagram (Huang et al. 2014a; Richardson 

et al. 2014; Ganz et al. 2015).

Marketing Expenditures

E-cigarette manufacturers currently are not 

required to report marketing expenditures to any regulatory agency (Boxer et al. 2013; Federal Register 2015). 

Using proprietary data from Kantar Media, however, 

Kornfield and colleagues (2015) tracked marketing expenditures (television, print, radio, and Internet) back to 2008 

for approximately 130 e-cigarette brands (note that many 

e-cigarette products are not branded, and thus these data 

are not complete). Kornfield and colleagues (2015) found 

minimal spending through 2010, followed by an acceleration in spending from $12 million in 2011 to $125 million in 2014 (Figure 4.5). Not shown in the figure is that 

in 2012, more than 60% of advertising expenditures were 

for blu (then owned by Lorillard, now Imperial Tobacco), 

which was the market leader (Kornfield et al. 2015). The 

trajectory for spending was consistent with the pattern for 

product sales, particularly for the most dominant brands 

(Figures 4.1 and 4.5).

Annual marketing expenditures for conventional 

cigarettes ($9.2 billion in 2012) dwarf the $125 million in 

2014 for e-cigarettes (Federal Trade Commission 2015a,b; 
A Report of the Surgeon General

158 Chapter 4

Kornfield et al. 2015). However, the available data about 

e-cigarette marketing also underestimate total marketing expenditures. Not included are expenditures for 

retail marketing, social media, and sponsored events, all 

of which are essential components of the industry’s integrated marketing strategy. In the absence of regulation, 

television advertising for e-cigarettes will continue, as 

the two largest tobacco companies moved promotions of 

MarkTen (Altria) and VUSE (Reynolds American) from test 

markets to national distribution in 2014 (Kornfield et al. 

2015; Truth Initiative 2015; Cantrell et al. 2016).

Tobacco marketing and surveillance systems—

including the Trinkets & Trash archive maintained by 

the Rutgers University School of Public Health and the 

Stanford Research into the Impact of Tobacco Advertising 

(SRITA) research group—collect examples of e-cigarette 

advertising and promotions and make these available to 

users through image-rich websites (see Trinkets & Trash 

[http://www.trinketsandtrash.org] and Stanford Research 

into the Impact of Tobacco Advertising [http://tobacco.

stanford.edu/tobacco_main/index.php]).

Magazine and Print Advertising

Print has been the dominant channel for tracked 

expenditures of traditional e-cigarette advertising, representing 84% of annual expenditures in 2014 (Kornfield 

et al. 2015; Figure 4.5). A study by Richardson and colleagues (2014) collected U.S. advertisements for all 

noncombustible tobacco products (i.e., e-cigarettes, snus, 

dissolvables, and chew/dip/snuff) for a 3-month period in 

2012 through Mintel, which tracks direct mail and opt-in 

e-mail ads, and Competitrack, which monitors 21  other 

media sources. Metadata for identified ads showed advertising for e-cigarettes in print, television, radio, online, 

direct mail, and e-mail. The three most common media 

were print, television, and e-mail, and spending was 

highest for print ads (Richardson et al. 2014). An analysis of industry marketing data by the American Legacy 

Foundation (now called Truth Initiative) reported that 

47% of U.S. teens (12–17 years of age) and 82% of young 

adults (18–21 years of age) were exposed to magazine 

advertising for e-cigarettes in 2014; popular venues 

Figure 4.5 Quarterly promotional spending for e-cigarettes, 2010–2014

Source: Data for 2010–2013 (Q2) from Kornfield and colleagues (2015, p. 110) and adapted with permission from BMJ Publishing 

Group Limited. Data for 2013 (Q3)–2014 from Kantar Media (unpublished data).
Activities of the E-Cigarette Companies 159

E-Cigarette Use Among Youth and Young Adults

included tabloids, entertainment weeklies, and men’s lifestyle magazines (Truth Initiative 2015).

Research indicates that e-cigarette advertising 

in magazines with high teen readership is on the rise 

(U.S. Congress 2014). From 2012 to 2013, the number 

of e-cigarette advertisements in magazines with high 

youth readership was four times the number in magazines 

with high adult readership (U.S. Congress 2014). Recent 

studies using data from Kantar Media and GfK MRI (the 

latter measures media audiences and consumer insights; 

see http://www.mri.gfk.com) on e-cigarette advertisements show that blu led all e-cigarette brands in magazine 

advertising and that respondents had the highest recall of 

blu advertisements (Legacy for Health 2014).

A content analysis by Banerjee and colleagues (2015) 

of print magazine tobacco ads for 2012–2013, using data 

collected from Kantar Media, identified 171 e-cigarette 

ads over this period, 27 of which were unique. Ads were 

found in 24 magazines, 11 of which had been identified in 

prior studies as having youth and young adult readerships 

greater than 2 million per year or for which the teen portion of the audience was more than 10%. By number, ads for 

e-cigarettes were second only to those for conventional cigarettes and higher than the numbers for moist snuff, cigars, 

and snus. Eighty-five percent of the content in e-cigarette 

ads focused more on a theme of logos (i.e., logic or facts to 

support a position) than on a theme of emotional appeal.

In examining persuasive themes, the study found 

that ads used several approaches, including highlighting 

the conventional advantages of the product—such as 

a  focus on customer satisfaction—and emphasizing the 

quality of the product or price (85.2%) (Banerjee et al. 

2015). The ads also used the comparative approach, such as 

portraying the product as being different from other products, being smokefree, or being exempt from use in areas 

where conventional cigarettes are prohibited. Figure 4.6 

shows examples of the claims in e-cigarette marketing. 

In terms of images, 100% of the ads included the brand 

name and an image of the product. In addition, ads were 

most frequently full-page advertisements (89.9%), usually placed the product in a way that drew attention to it 

(92.6%), and most often used six or more colors (85.2%), 

which the authors noted increases the attention-grabbing 

ability of the ads (Banerjee et al. 2015).

A different content analysis of magazine ads for 

e-cigarettes, this one for a 3-month period in 2012 

(Richardson et al. 2014), found health-related themes and 

non-health-related attributes—such as romantic, sexual, 

or sociability content, with the highlighting of taste as the 

most frequent selling proposition (see Figure 4.6, parts 

B–D for examples). All ads in this analysis were found 

to contain links to a product’s website. When examined 

by readership, e-cigarette ads were found to have run in 

magazines with mostly White-male readers and, to a lesser 

extent, magazines targeting White women. The analysis 

noted that ads were targeted to a magazine’s readership, 

with different ads shown in the White, male-oriented 

Rolling Stone publication as compared with the femaledominated Us Weekly.

Television Advertising to Youth and Young Adults

The increasing frequency and reach of advertising 

on television raises concerns about the potential impact of 

promoting nicotine products and renormalizing smoking 

through that medium, particularly for youth (Hodge Jr 

2013; Duke et al. 2014; Grana and Ling 2014). At least 

40 unique advertisements for e-cigarettes appeared on U.S. 

television in 2013 and early 2014 (Farrelly et al. 2015). For 

example, e-cigarette ads were featured in the Super Bowl 

broadcast, which reached an estimated audience of more 

than 100 million persons in 2012 (Deans 2012). The Truth 

Initiative (formerly the American Legacy Foundation) 

found that in 2014, television advertising reached similar proportions of youth (62% of 12- to 17-year-olds) and 

young adults (64% of 18- to 24-year-olds) (Truth Initiative 

2015). Using proprietary data from Nielsen, Duke and 

colleagues (2014) estimated that 50% of U.S. youth 

were exposed to e-cigarette ads on television in 2013 

and that 80% of this advertising was for blu (Lorillard, 

now Reynolds American). On average, those exposed 

saw 21  ads between October 2012 and September 2013. 

Between 2011 and 2013, exposure to e-cigarette advertising on television increased dramatically, by 321% for 

young adults (18–24 years of age) and 256% for adolescents (12–17 years of age) (Duke et al. 2014).

The same study (Duke et al. 2014) found that 

more than 75% of the exposure of youth to e-cigarette 

ads occurred on cable networks. The study found television ads for several different brands—including blu, FIN, 

Starfire, and NJOY—during a 9-month period in 2013. 

The most widely aired ad was for blu, featuring a celebrity and closing with the tagline “we’re all adults here. It’s 

time to take back your freedom” (Duke et al. 2014, p. 6).

Sponsorships

After the Master Settlement Agreement in 1998, 

sponsorship of events with a significant youth audience, such as concerts and athletic events, was banned 

for conventional cigarettes. However, e-cigarettes do not 

fall under these parameters, and recalling the early marketing of conventional cigarettes, e-cigarette brands have 

used sponsorships to increase the awareness and appeal 

of their label and product. For example, in 2011 blu sponsored a NASCAR driver and had its own car in some races 

(PRNewswire 2011). Additionally, blu has handed out free
A Report of the Surgeon General

160 Chapter 4

Figure 4.6 E-cigarette marketing claims

A. Freedom

Source: Esquire (2014).

B. Health

Source: Stanford Research into the Impact of 

Tobacco Advertising (n.d.b.).

C. Romance, sexuality, or sociability

Source: (Left) Maxim (2012), (middle) Men’s Journal (2014), and (right) Sports Illustrated (2014).
Activities of the E-Cigarette Companies 161

E-Cigarette Use Among Youth and Young Adults

Figure 4.6 Continued

D. Taste

Source: Soap Opera Digest (2013).

E. Smoking cessation

Source: Rolling Stone (2013).

F. Use in smokefree environments

Source: Rolling Stone (2012).

G. Product engineering

Source: Rolling Stone (2015).
A Report of the Surgeon General

162 Chapter 4

Figure 4.6 Continued

H. Cleaner than cigarettes

Source: Car and Driver (2014).

I. Save money

Source: FIN Electronic Cigarettes (n.d.).

J. Circumvent smokefree policies

Source: Spin (2012).
Activities of the E-Cigarette Companies 163

E-Cigarette Use Among Youth and Young Adults

samples during large events and has even sponsored events 

at music festivals (PRNewswire 2013; blu eCigs 2014). 

Further, conservative estimates indicate that in 2012 and 

2013, free samples were provided by six companies at 

348  events, most of these events having high participation by youth (Durbin et al. 2014). Under the deeming rule 

published in May 2016 (currently under litigation), free 

samples were banned (Federal Register 2016).

Digital Landscape for E-Cigarettes

The Internet has been widely used to promote cigarettes, cigars, and smokeless products (Ribisl 2003; 

Freeman and Chapman 2007; USDHHS 2012). This 

medium—through websites, message forums, and social 

media—has been heavily used to sell and glamorize 

e-cigarettes and their use. Nearly all teens 13–17 years 

of age (92%) use the Internet daily, and 73% of teens 

access the Internet via smartphones (Lenhart 2015). In 

2015, a study conducted by the Truth Initiative indicated 

that 40% of youth (13–17 years of age) and 57% of young 

adults (18–21 years of age) had seen e-cigarette advertising online (Truth Initiative 2015).

Price promotions are not just involved in sales at 

brick-and-mortar stores; they are also offered by online 

stores and through social media. Grana and Ling (2014) 

found that 80% of websites indicated a sale price or discount, while Huang and colleagues (2014a) found that 

34% of commercial tweets mentioned the words “price” or 

“discount.” Both Facebook and Twitter provide opportunities for brands and companies to offer online coupons and 

discounts (Discount Coupons for blu n.d.; Vapor4Life n.d.). 

In a study of online e-cigarette retailers, 28% of the websites offered a promotion, such as a discount, other free 

items, or a loyalty program (Williams et al. in press). 

Without age restrictions or age verification, youth can 

access these websites easily and thus obtain the discount 

or coupon (Williams et al. in press). However, under the 

deeming rule, websites cannot sell e-cigarettes to youth 

under the age of 18, so access will likely be curtailed as 

a result (Federal Register 2016). The following sections 

review three basic categories of online e-cigarette content: 

websites that sell e-cigarettes, manufacturer-sponsored 

brand name websites, and e-cigarette promotions on 

social media websites (including Facebook, Twitter, and 

YouTube).

Websites Selling E-Cigarettes

Tobacco industry analysts estimate that online sales 

accounted for approximately 30% of e-cigarette sales 

volume in the first quarter of 2015 (Wells Fargo Securities 

2015a). Some Internet vendors sell their own brands 

exclusively (e.g., Mistic, Green Smoke), while a large 

number are online stores that sell many brands and varieties of products (Zhu et al. 2014; Williams et al. in press). 

Although the marketers of e-cigarettes have made 

claims that differ from those made for conventional cigarettes (such as use for smoking cessation, which is illegal 

without being an approved cessation drug or device), 

a content analysis of e-cigarette marketing (Grana and 

Ling 2014) and the observations of tobacco marketing surveillance systems point to several similarities, including 

the use of young, attractive models; lifestyle claims; and 

celebrities. Other claims made in e-cigarette advertising 

have been used in the past by conventional cigarette 

brands (such as having fewer carcinogens, lower risk of 

tobacco-related disease) or by smokeless tobacco products 

(such as the ability to use them where smoking is prohibited) (Grana and Ling 2014). However, under the deeming 

rule that was published in May 2016, after August 8, 2016, 

e-cigarette manufacturers cannot make modified risk 

claims (Federal Register 2016) (although this provision 

has been challenged in pending lawsuits).

Formal analyses of marketing claims of branded 

e-cigarette sites that both promote and sell e-cigarettes 

provide details on the types of claims made in these channels. The study by Grana and Ling (2014) analyzed claims 

from 59 English-language websites over a 2-month period 

in 2011 and found four major thematic content areas: 

health- and cessation-related benefits, avoiding smokefree 

policies, lifestyle benefits, and product-engineering claims. 

Ninety-five percent of websites made explicit or implicit 

health-related claims, and 64% made claims related to 

cessation, often through the use of testimonials. Almost 

all (98%) included a comparison of the risks and benefits 

of e-cigarettes and conventional cigarettes; 95% included 

claims that e-cigarettes are cleaner; and 93% said they 

were cheaper. Claims regarding where e-cigarettes 

could be used were also common—with 88%  claiming 

e-cigarettes can be used anywhere, and 71% pointing to 

e-cigarette use as a means of circumventing clean air policies. Figure 4.6 shows advertising that exemplifies these 

marketing claims for e-cigarettes.

Grana and Ling’s (2014) analysis also points to the 

common use of lifestyle-related claims, a hallmark of traditional tobacco marketing: 73% of websites contained 

images or claims of being modern or glamorous. Websites 

also pointed to social advantages for users of their particular brand: 44% of claims pointed to increased social 

status and 32% to enhanced social activity, 31% suggested 

romantic advantages, and 22% used celebrities. Claims 

of increased social status, opportunity, and romance as 

well as the use of celebrities may resonate especially with 

youth and young adults (Grana et al. 2011).

A different content analysis, this one of the marketing messages of English-language branded e-cigarette 
A Report of the Surgeon General

164 Chapter 4

retail sites, examined and compared websites for two different time periods (May–August 2012 and December 

2013–January 2014) and found differences in claims between 

the two timeframes (Zhu et al. 2014). In comparing claims 

for brands available during both time periods with those 

that were newly available in 2013–2014, the authors found 

that products and advertising messages varied between the 

two samples. Brands analyzed from 2012 were significantly 

more likely than those in the later period to (a) claim that 

their products were healthier and less expensive than conventional cigarettes and could be used where smoking is 

prohibited and (b)  indirectly claim their products were 

effective for smoking cessation through testimonials and 

other methods (Zhu et al. 2014). The study also found an 

increase from one period to the next in the number of 

branded retail websites and the number of flavors per brand 

advertised on a website, as well as the likelihood of a website offering e-cigarette hardware and such other products 

as e-liquids and e-hookahs or other products that did not 

resemble cigalikes (Zhu et al. 2014). The study’s findings 

suggested that the emphasis for newer brands had shifted 

from comparing them with conventional cigarettes to a 

focus on their role as new nicotine delivery systems.

Williams and colleagues (in press) used a standardized search strategy employed in their earlier study 

of websites selling cigarettes (Ribisl 2003) to identify 

995  English-language websites selling e-cigarettes in 

2014. The authors performed a content analysis on the 

281 most popular websites, as judged by data on traffic. 

Most of the websites were based in the United States 

(71.9%), the United Kingdom (16.7%), and China (5.3%), 

and they offered a variety of products, but more sold 

e-cigarette starter kits (92.5%) than disposables (55.2%). 

Most offered flavors, with the most popular being fruit 

(79.4%), candy (75.2%), coffee (68.0%), and alcohol 

(45.6%). Although 71.5% featured some type of health 

warning, 69.4%  claimed health advantages over other 

tobacco products, and 32.7% claimed that the product 

helped people to quit smoking conventional cigarettes. 

The sites also featured endorsements or mentions of 

celebrities using the products (Stanford Research into 

the Impact of Tobacco Advertising n.d.a.). Physicians and 

other health professionals provided endorsements as well.

Elsewhere, Cobb and colleagues (2015) conducted a 

forensic analysis of websites that sold e-cigarettes and participated in affiliate advertising on the Internet. In addition to identifying multiple layers of redirection between 

online advertising by affiliates and websites selling 

e-cigarettes, the authors found that online advertisements 

and affiliate websites included cessation claims. 

Research suggests Internet e-cigarette vendors have 

not routinely verified the age and identity of website visitors or blocked sales to minors. However, after August 8, 

2016, due to the deeming rule, it has become illegal for 

online retailers to sell e-cigarettes to those under 18 

(Federal Register 2016). In a survey of purchasing by 

youth, Williams and colleagues (2015) identified 98 websites selling e-cigarettes on which youth, 14–17 years of 

age, made purchase attempts using prepaid credit cards. 

In all, 18 (of 98) order attempts failed because of technical 

problems with the website or the payment system, all of 

which were unrelated to age verification. Of the remaining 

80 orders, 75 (93.8%) were filled. Five vendors claimed to 

use a service offered by shipping companies to verify age 

at delivery, but none actually did. Although data are not 

available on the proportion of youth who purchase their 

e-cigarettes online versus buying them at retail outlets, 

this study suggests that youth would have ready access if 

they tried to purchase e-cigarettes online. The Prevent All 

Cigarette Trafficking Act of 2009 requires Internet sellers 

of cigarettes and smokeless tobacco to, among other provisions, verify age of customers at the time of purchase and 

ensure that the deliverer checks identification at the time 

of delivery; stop Internet sales to minors; and pay applicable 

local, state, federal, and territorial taxes to reduce the price 

advantage of online sales. FDA regulation now prohibits 

the Internet sales of e-cigarettes to minors. However, there 

are currently no federal requirements for Internet vendors 

of e-cigarettes to check identification upon delivery or pay 

applicable taxes (Campaign for Tobacco Free Kids 2016).

The marketing of candy and fruit flavors may be one 

of the reasons that e-cigarettes appeal to youth (Grana 

and Ling 2014; Richtel 2014a; Zhu et al. 2014). Young 

adults (18–24 years of age) are more likely to use flavored 

tobacco products than are adults in the next age group 

(25–34 years of age) (Villanti et al. 2013). Zhu and colleagues (2014), who used three search engines (Google, 

Yahoo!, and Bing) and various keywords from May 2012 

to January 2014 to identify a wide variety of e-cigarette 

brands and flavors, found 466 brands and 7,764 unique flavors, with 242 new flavors appearing each month. Other 

than tobacco flavor, the most popular flavors were menthol 

(92.1%), fruit (84.2%), dessert/candy (79.9%), and alcohol/

drinks (77.5%). Additionally, in their content analysis of 

e-cigarette retail websites, Grana and Ling (2014) found 

that such flavors as coffee, fruit, and candy were offered on 

most sites. Further, flavors were being sold under brand 

names similar to cereal and candy products that appeal to 

youth, such as Wrigley’s Big Red Gum (Daniels 2015).

Tobacco Industry Corporate and Brand 

Websites

Three categories of e-cigarette brands have emerged 

within the U.S. market: brands developed by cigarette 

manufacturers (i.e., MarkTen, VUSE), brands acquired 
Activities of the E-Cigarette Companies 165

E-Cigarette Use Among Youth and Young Adults

by cigarette manufacturers (i.e., blu, Green Smoke) 

(Table 4.3), and brands that have no affiliation with a cigarette manufacturer (e.g., NJOY, FIN). A content analysis 

of websites for these three types of brands suggested that 

those developed by cigarette manufacturers may be marketed more cautiously than brands acquired by cigarette 

manufacturers or brands that have no affiliation with a 

cigarette manufacturer (Seidenberg et al. 2016). 

Table 4.3 Mergers, acquisitions, partnerships, and other agreements in the e-cigarette industry

Date Purchaser Acquisition target

Partnerships and 

other agreements Deal sizea Geographyb

December 2011 Japan Tobacco — Ploom (partnership) Not disclosed United States

December 2012 BAT CN Creative — £40 million United Kingdom

April 2012 Lorillard blu — $135 million United States

April 2013 National Tobacco — V2 Cigs 

(partnership)

Not disclosed United States

August 2013 Imperial Dragonite — $75 million China

October 2013 Lorillard SKYCIG — £60 million United Kingdom

January 2014 ECIG VAPESTICK — $70 million United Kingdom

January 2014 Gilla Drinan — Not disclosed Ireland

February 2014 Altria Green Smoke — $110 million United States

March 2014 ECIG FIN — $170 million United States

April 2014 ECIG VIP — $58 million United Kingdom

June 2014 ECIG Ten Motives — $104 million United Kingdom

June 2014 PMI Nicocigs — Not disclosed United Kingdom

July 2014 ECIG Hardwire — $30 million Internet

November 2014 Japan Tobacco E-Lites — Not disclosed United Kingdom

January 2015 BreatheEcigs/DNA Breathe LLC — Not disclosed United States

February 2015 Japan Tobacco — Ploom (purchased 

the intellectual 

rights to some 

Ploom technology)

Not disclosed United States

March 2015 Gilla An undisclosed 

Florida e-liquid 

company

— $1.5 million United States

April 2015 Japan Tobacco Logic — Not disclosed United States

June 2015 Imperial blu — $7.1 billion United States and 

United Kingdom

December 2015 Gilla The Mad Alchemist — $500,000 United States, 

Canada, Europe, 

and United Arab 

Emirates 

Source: Various news sources and companies’ websites, SEC (Securities and Exchange Commission) reports, and press releases as of 

January 25, 2016.

aDeal size refers to prices at the time of the announcement, not necessarily the final transaction price.

bGeography refers to the country in which the acquisition target was registered.

Table 4.4 

compares and contrasts some key features of the websites by manufacturer affiliation. It shows, for example, 

that access to websites of brands developed by cigarette 

manufacturers (or a subsidiary) was restricted to users 

21  years of age and older (MarkTen), and user registration was required (i.e., the user needed to input personal 

information such as name, address, and birthdate) for 

VUSE. In contrast, websites for brands with no affiliation 
A Report of the Surgeon General

166 Chapter 4

with a cigarette manufacturer and those acquired by cigarette manufacturers were accessible to users 18 years of 

age and older via self-reporting of age, with the exception 

of 21st Century Smoke. In addition, VUSE e-cigarettes 

were not sold online (they were sold only in retail outlets), and they were available in a single nicotine level 

with limited flavor options (except for forthcoming tank 

versions), while MarkTen could be purchased online. The 

websites for both MarkTen and VUSE mentioned selling 

flavored e-cigarettes. As far as e-cigarette brands not 

having an affiliation with a cigarette manufacturer or 

that were acquired by a cigarette manufacturer, all brands 

except Logic offered fruit, candy, or other flavors. Further, 

all of the unaffiliated brand websites sold e-cigarettes 

online and offered multiple nicotine levels. Most websites 

offered nicotine-free options and flavored e-cigarettes as 

well (Seidenberg et al. 2016). The Green Smoke website 

even provided a link to guide customers in finding the 

proper nicotine level for their cartridges (Green Smoke 

E-Vapor n.d.).

Table 4.4 Comparison of website access restrictions, online sales, nicotine levels, and flavors among e-cigarette 

brands with no cigarette manufacturer affiliation, brands acquired by cigarette manufacturers, and brands 

developed by cigarette manufacturers

E-cigarette brands (10)

Not affiliated with a cigarette 

manufacturer: NJOY, Logic, 

21st Century Smoke, FIN, 

Nicotek, and Mistic (6)

Acquired by a cigarette 

manufacturer: blu and Green 

Smoke (2)

Developed by a cigarette manufacturer 

(or subsidiary): MarkTen and 

VUSE (2)

Website access All websites (except 21st 

Century Smoke) have one-click 

accessa or age verification to 

restrict initial access to people 

18 years of age and older; 21st 

Century Smoke does not have 

any website restrictions for 

initial access.

Both sites have one-click 

access or age verification to 

restrict initial access to people 

18 years of age and older (blu) 

and 21 years of age and older 

(Green Smoke).

MarkTen has age verification to restrict 

initial access to people 21 years of age 

and older. Before initial access, VUSE 

requires people 21 years of age and 

older to register first with the website.

Online sales All brands can be purchased 

online.

Both brands can be purchased 

online.

MarkTen can be purchased online; 

VUSE cannot.

Multiple levels of 

nicotine

Among all brands, the level 

of nicotine varies by product. 

Some (e.g., blu, Logic Zero, 

21st Century Smoke, Nicotek) 

offer products with 0% nicotine 

(by volume).

Among both brands, the level of 

nicotine varies by product. 

For MarkTen, the level of nicotine 

varies by product. VUSE e-cigarettes 

contain 4.8% nicotine (by weight).

VUSE tanks, set to come out in 

February 2016, will have different 

levels of nicotine (Kress 2015).

Flavors (other than 

tobacco and/or 

menthol)

All brands offer a variety of 

flavors, such as fruit and candy.

Both brands offer a variety of 

flavors.

MarkTen offers two flavors: fusion and 

wintermint. VUSE offers four flavors: 

crema, chai, berry, and mint (Kress 

2015).

Source: Unless cited otherwise, information was obtained from the companies’ websites (January 2016): https://www.njoy.com/; 

http://store.logicecig.com/; https://www.21stcenturysmoke.com/; https://www.fincigs.com/; http://www.nicotekecigs.com/; 

http://www.misticecigs.com/; http://www.blucigs.com/; https://www.greensmoke.com/; https://www.markten.com/; and 

https://vusevapor.com/.

aWith “one-click access,” visitors to a website self-report on their age by identifying their age from a clickable pop-up box. For 

example, persons 18 years of age and older can browse the website, but those younger than 18 cannot.

Social Media Promoting E-cigarettes

E-cigarettes have been widely promoted on social 

media platforms such as YouTube, Twitter, Instagram, and 

Facebook; most of these social media sites do not require 

age verification. YouTube is the most popular videosharing website globally and features many e-cigarette 

videos. Luo and colleagues (2014) used various search 

terms to identify 196 unique videos in February 2013 

that were portraying e-cigarettes and found that 94% of 

the videos were “pro” e-cigarettes, 4% were neutral, and 
Activities of the E-Cigarette Companies 167

E-Cigarette Use Among Youth and Young Adults

2% were “anti” e-cigarettes. Those authors found that 

the three most common genres were advertising of products, user sharing, and product reviews. Of the “pro” 

e-cigarette videos, 84.3% featured links to websites selling 

e-cigarettes, and 71.4% claimed that e-cigarettes were a 

healthier alternative to conventional cigarettes. Finally, 

the “pro” videos received more visits and were rated more 

favorably than were the small number of “anti” videos.

The authors of another study, this one a content 

analysis of 365 e-cigarette videos on YouTube that ran at 

some time from June 2007 to June 2011, estimated that 

more than 1.2 million youth and a total of 15.5 million 

people worldwide were exposed to these videos (Paek 

et al. 2014). In addition to looking at viewership, the content analysis examined the type, sponsorship, and health 

claims of the videos. Just 16% of the videos were formal 

advertisements or news clips, and 79.2% of the content 

was coded as appearing to have been generated by users. 

Videos emphasized economic, psychological, and social 

benefits, and health claims included e-cigarettes being 

less harmful than conventional cigarettes, healthy, and 

providing help in quitting smoking. Most (85.2%) videos 

in the sample were sponsored by e-cigarette companies 

or their associates, with an additional 10% coming from 

individuals who did not mention a specific website or 

company. Interestingly, videos sponsored by marketers 

contained a significantly lower level of health claims than 

did those from laypeople (users) and, not surprisingly, 

contained a higher level of information cues (e.g., product 

contents, price, distribution channel).

A cross-sectional study of Twitter, a microblogging 

platform, that examined more than 74,000 tweets accessed 

through a licensed Twitter data provider over a 2-month 

period in 2012, found extensive marketing of e-cigarettes 

(Huang et al. 2014a). The majority of e-cigarette content during this period was advertising and promotion. 

In fact, 89.6% of the tweets contained commercial content (e.g., presence of branded promotional messages or 

hyperlinks to commercial websites), and only 11% identified as being non-sponsored or independent, reflecting 

individual opinions or experiences, or being linked to nonpromotional content. Commercial tweets most commonly 

contained price promotions and discounts (34.3%), with 

cessation-related claims included in 10.8% and lower percentages for health or safety (Huang et al. 2014a).

Jo and colleagues (2016), in a study of 2,847 tobaccorelated tweets about price promotions and coupons, found 

that e-cigarettes, not conventional cigarettes, were the 

most frequently mentioned product (90.1%), and about 

one-third of all e-cigarette-related tweets included a discount code. The tweets also touted the relatively low price 

of e-cigarettes and made comparative claims about the 

health risks of the product.

Sponsored Online and Video Advertising

The study by Richardson and colleagues (2015) 

used information from the monitoring service 

Competitrack to analyze the volume and characteristics of 

industry-sponsored tobacco and e-cigarette online banner/

video advertisements in the United States and Canada in 

2012–2013. This study found that online banner/video 

advertising—which embeds an ad or video on a website—was more commonly used for e-cigarettes than 

for conventional cigarettes. E-cigarette ads were often 

placed on music or entertainment (39.1%) sites, which 

the authors noted attract a sizeable number of youth and 

young adults. The most frequent theme for the 24 online 

banner or video e-cigarette ads (promoting five e-cigarette 

brands) analyzed was that the product was more “green” 

or environmentally friendly than conventional cigarettes 

(54.2%), followed by less harmful than cigarettes (37.5%), 

and being an alternative to conventional cigarettes when 

someone could not smoke (33.3%).

E-Cigarettes in the Retail 

Environment

Conventional Tobacco Retailers (Convenience 

Stores, Pharmacies, Tobacco Shops)

As of December 2015, 48 of the 50 states prohibited 

sales of e-cigarettes to minors (National Conference of 

State Legislatures 2015), but compliance of retailers with 

youth-access laws has not yet been studied. FDA is actively 

enforcing the federal minimum age requirements. As of 

August 8, 2016, the federal deeming rule bans the sale of 

e-cigarettes to minors under the age of 18 and requires 

photo identification for those under age 27 (Federal 

Register 2016). In the past few years, brick-and-mortar 

retailers have surpassed the Internet as the dominant 

distribution channel for e-cigarettes. For example, after 

Lorillard acquired blu in 2012, the number of retailers 

selling this brand increased from 13,000 to 127,000 in 

just 1 year (Esterl 2012; Bannon 2013). In California, 

the proportion of licensed tobacco retailers that sold 

e-cigarettes increased from 12% in 2011 to 67% in 2014 

(Chapman 2015).

E-cigarettes are widely available in convenience 

stores, a type of establishment that 4.1 million U.S. 

teenagers visit at least once per week (Rose et al. 2014; 

Sanders-Jackson et al. 2015a). According to a 2013 statesponsored survey that included a sample of approximately 

7,300 licensed tobacco retailers in California, e-cigarettes 

were sold in more than half of convenience stores, pharmacies, and liquor stores and in nearly all tobacco shops 
A Report of the Surgeon General

168 Chapter 4

(California Department of Public Health and California 

Tobacco Control Program 2014).

Only three studies have examined the retail availability of e-cigarettes near schools. In a 2012 nationally 

representative sample of tobacco retailers, the presence of 

a public school within 1,000 feet was not related to the 

availability of e-cigarettes (Rose et al. 2014). In a study 

that examined a much larger buffer zone in Kentucky, 

88% of schools in two counties were located within 1 mile 

of a retailer that sold e-cigarettes (Hahn et al. 2015). As 

for colleges, disposable and/or rechargeable e-cigarettes 

were available at 60% of tobacco retailers near campuses 

in North Carolina and Virginia in 2013, a more than twofold increase from the previous year (Wagoner et al. 2014).

A pilot study examining tobacco point-of-sale advertising and promotion in the central Harlem neighborhood 

of New York City found that 26% of stores had e-cigarette 

advertising on the building’s exterior (Ganz et al. 2015). 

External ads included those located less than 3 feet above 

the ground at the eye level of children—a placement that 

was outlawed for conventional cigarettes by the Master 

Settlement Agreement—and featured flavored products 

(Ganz et al. 2015).

Unlike conventional cigarettes, e-cigarettes appear 

to be relatively less prevalent at stores in economically 

disadvantaged communities. In an analysis that examined 

data from two studies that had used representative samples of U.S. tobacco retailers, e-cigarettes were less likely 

to be sold than conventional cigarettes at stores located in 

economically disadvantaged neighborhoods and in neighborhoods with a higher proportion of African American 

residents (Rose et al. 2014). These patterns are consistent 

with evidence that e-cigarette marketing in other channels 

targets higher income non-Hispanic White males (Emery 

et al. 2014). However, the retail availability of e-cigarettes 

has changed at different rates in different neighborhoods. 

In a study of U.S. food stores, only 3% of stores located 

in non-Hispanic White and Hispanic neighborhoods sold 

e-cigarettes in 2010; none of the stores in predominantly 

African American neighborhoods sold them (Khan et al. 

2014). Three years later, the figures were 36% in predominantly non-Hispanic White neighborhoods, 18% in 

Hispanic-majority neighborhoods, and 19% in African 

American-majority neighborhoods. Notably, these data 

were collected before the two largest U.S. tobacco companies launched MarkTen (Altria) and VUSE (Reynolds 

American) in late 2013. Thus, the industry’s current 

influence on disparities in the retail availability and marketing of e-cigarettes cannot be readily estimated from the 

studies reviewed.

Two studies examined retail data about e-cigarettes 

as a function of state and/or county smokefree air laws 

(Huang et al. 2014b; Rose et al. 2014). In one of the 

studies, which used data collected in two studies that used 

independent samples of U.S. tobacco retailers, the odds 

of selling e-cigarettes were greater for retailers in states 

with weaker smokefree air policies, even after controlling for store type, price of conventional cigarettes, and 

neighborhood demographics (Rose et al. 2014). A similar 

inverse relationship was found between sales of disposable e-cigarettes (as measured by retail scanner data in 

52 U.S. markets from 2009 to 2012) and the proportion 

of the population protected by 100% smokefree policies 

covering all indoor areas of bars, restaurants, and workplaces (Huang et al. 2014b). Taken together, these results 

suggest that e-cigarettes are, at least initially, more likely 

to be sold in communities with weaker smokefree policies.

Few retail surveillance studies have characterized 

promotion, placement, or price for e-cigarettes (Hsu et al. 

2013; Wagoner et al. 2014; Ganz et al. 2015). In a study 

of licensed tobacco retailers in Florida, advertising for 

e-cigarettes was more prevalent on the exterior than the 

interior (50% vs. 11%) (Kim et al. 2015). In the study by 

Wagoner and colleagues (2014), the presence of e-cigarette 

advertising near college campuses in North Carolina and 

Virginia tripled on store exteriors and quadrupled in store 

interiors in just 1 year. Although the price of rechargeable units decreased significantly, there was little evidence 

of price discounting for any e-cigarettes (Wagoner et al. 

2014). The low visibility of price discounts at the point 

of sale suggests that marketing for e-cigarettes favors a 

“pull” strategy, relying on direct mail and e-mail coupons 

and special offers to entice customers to retail locations.

“Vape Shops”

“Vape shops” specialize in the sale of refillable devices 

and tank systems, typically offer a tasting menu of flavors, 

and sometimes feature a lounge area where customers can 

“vape” while socializing (Lee and Kim 2015; Sussman et al. 

2016). “Vape shops” have been excluded from most studies 

about the retail marketing of e-cigarettes, in part because 

the environment is so different from that of conventional 

tobacco retailers (Lee and Kim 2015) and because so few 

states require these establishments to obtain a tobacco 

retailer license, effectively keeping them out of the sampling frame for many studies and making the monitoring 

and enforcement of laws difficult (Lee et al. 2014).

Anecdotal evidence suggests that “vape shops” currently do not have readily visible branded signs and displays 

that characterize the retail marketing of other tobacco 

products. Even though the relationship between the “vape 

shop” industry and the tobacco industry can be adversarial 

(Sussman et al. 2016), one study found that the marketing 

practices of these establishments closely resemble the current and former strategies that tobacco companies have 
Activities of the E-Cigarette Companies 169

E-Cigarette Use Among Youth and Young Adults

used to market other tobacco products (Cheney et al. 2015). 

According to this study, “vape shop” owners and managers 

in Oklahoma used free samples, loyalty programs, sponsored events, direct mail, advertising through social media, 

and price promotions targeted at particular consumers, 

such as college students (Cheney et  al. 2015). No other 

study about marketing by “vape shops” has been published.

Numerous gaps exist in research about “vape shops,” 

including information on consumer behavior, the use of 

tracking systems for sales data, marketing surveillance, 

purchases by youth, and the opinions of retailers and 

the general public about regulations. Spatial analyses 

are needed to determine whether “vape shops” are clustered near schools or college campuses, whether other 

neighborhood demographics are correlated with the location of these establishments, and how such associations, 

if present, have changed over time and in response to state 

and local policy interventions. The proportion of “vape 

shops” where workers mix solutions of liquid nicotine on 

site is not known, and the absence of uniform safety precautions regarding handling and spills poses additional 

concern for regulation (ChangeLab Solutions 2014). Under 

the deeming rule that was published in May 2016, “vape 

shops” that mix and sell e-liquids are both retailers and 

manufacturers and, therefore, are subject to the provisions 

in the deeming rule and the Tobacco Control Act that apply 

to both (Federal Register 2016).

Exposure and Receptivity to 

Advertising for E-Cigarettes

Exposure

Given industry data about increasing expenditures 

for e-cigarette advertising and extending its reach, the 

high levels of advertising awareness reported in studies of 

youth and/or young adults are not surprising. An online 

panel of U.S. youth (13–17 years of age) and young adults 

(18–21 years of age) conducted in February 2014 found 

that awareness of e-cigarette advertising was greatest for 

retail advertising, followed by awareness of advertising 

on television and online (Truth Initiative 2015). In this 

study, and compared with the entire population, awareness among current smokers of e-cigarette advertising 

was higher across all channels and higher for online ads 

than for television ads (Legacy for Health 2014).

In school-based surveys of middle and high school 

students in Connecticut, gas stations and television were 

the dominant channels in which students reported recently 

seeing e-cigarettes advertised or sold (Krishnan-Sarin et al. 

2015). A different pattern was observed in a convenience 

sample of college students in Hawaii, where the figures for 

seeing ads were 59%, online; 58%, television; 71%, malls; 

41%, gas stations; and 47%, convenience stores (Pokhrel 

et al. 2015). Elsewhere, in an online experiment, 56% 

of adolescents (13–17 years of age) who had never used 

e-cigarettes reported seeing at least one televised advertisement previously, and there were modest, but statistically 

insignificant differences in exposure by smoking status and 

race/ethnicity (p<.10) (Farrelly et al. 2015).

The National Youth Tobacco Survey reported that in 

2014, 18.3 million middle and high school students were 

exposed to e-cigarette advertising from at least one source 

(CDC 2016b). In this nationally representative sample of 

U.S. middle and high school students, nearly 7 out of 10 

reported seeing an e-cigarette advertisement in that year. 

The most common places for exposure among middle 

school students were retail stores (52.8%), the Internet 

(35.8%), television and movies (34.1%), and newspapers 

and magazines (25.0%). Similarly, high school students 

reported the highest exposure at retail stores (56.3%) and 

then the Internet (42.9%), television and movies (38.4%), 

and newspapers and magazines (34.6%). Among both 

middle school and high school students, exposure through 

retail stores was higher among non-Hispanic Whites than 

non-Hispanic Blacks. However, non-Hispanic Blacks had 

higher exposure to e-cigarette advertisements on television and in movies than non-Hispanic Whites. Females 

had higher exposure than males to advertisements on the 

Internet and in newspapers and magazines.

Receptivity to Advertising

Receptivity to tobacco marketing is a well-established 

risk factor for tobacco use by adolescents and young adults 

(NCI 2008; USDHHS 2012), and two studies adapted measures of receptivity to the marketing of tobacco in research 

on e-cigarettes. In one study, college students from 

a  southwestern state who watched three advertisements 

for different brands of e-cigarettes in an online survey 

used a 7-point scale to rate how enjoyable, likable, and 

appealing the ads were; results suggested moderate receptivity (mean of 51 on a scale ranging from 7 to 126) and 

significant differences between brands (Trumbo and Kim 

2015). In the other study, Pokhrel and colleagues (2015), 

using a sample of college students from Hawaii, adapted 

a multi-item scale of liking advertisements from studies 

about alcohol (Unger et al. 2003) and two items from the 

most commonly used measure of receptivity to tobacco 

marketing (Pierce et al. 1998). This study observed low 

levels of liking advertisements (all below the scale midpoint) (Pokhrel et al. 2015). The extent to which youth 

and young adults who are receptive to e-cigarette marketing are also receptive to tobacco marketing has not 

been studied. However, the extent to which advertising 
A Report of the Surgeon General

170 Chapter 4

strategies for e-cigarettes mimic strategies used by tobacco 

companies suggests that the two measures of receptivity 

could be highly correlated.

Effect of E-Cigarette Advertising on 

Behavior

Associations with E-Cigarette Use and Intentions 

to Use

Evidence that advertising for conventional cigarettes increases product initiation among never users, 

discourages quit attempts in current users, and encourages relapse in those trying to quit is well established (NCI 

2008; USDHHS 2012). However, while fewer studies have 

focused on e-cigarette advertising in particular, the available evidence suggests that e-cigarette advertising has 

similar effects, although additional research is recommended. A search for studies of youth or adults that either 

(a) manipulated exposure to e-cigarette advertising or measured self-reported recall of advertisements, (b)  assessed 

the frequency of exposure to advertising in one or more 

channels, or (c) measured receptivity to e-cigarette advertising yielded 10 studies that addressed the impact of 

advertising on the use of or intentions to use e-cigarettes.

One experiment tested whether seeing television 

advertising for e-cigarettes predisposed adolescents to try 

these products (Farrelly et al. 2015). Among adolescents 

(13–17 years of age) who had never used e-cigarettes, 

a single exposure to a set of four televised advertisements 

for popular brands resulted in significantly greater intention to try e-cigarettes—more than 50% higher in the 

treatment group than the control group (Farrelly et al. 

2015). Another study examined responses to e-cigarette 

advertisements among young adults (Trumbo and Kim 

2015); among a convenience sample of college students 

who watched three television ads for e-cigarettes, greater 

receptivity to e-cigarette advertising was associated with 

significantly higher odds of intending to use e-cigarettes 

in the future, but the analysis did not adjust for prior use 

or individual demographics (Trumbo and Kim 2015).

Very few cross-sectional or longitudinal surveys have 

examined associations between adolescents’ exposure to 

e-cigarette advertising and either trial or regular use of 

such products. An analysis of the 2011 National Youth 

Tobacco Survey found that adolescents who reported frequent exposure to protobacco advertising at the point 

of sale and on the Internet (e.g., seeing ads most of the 

time or always) had significantly higher odds of ever using 

e-cigarettes, and there was a dose-response association 

between the number of marketing channels to which they 

were exposed and ever use (Agaku and Ayo-Yusuf 2014).

Surveillance research that differentiates exposure to 

advertising for e-cigarettes from exposure to ads for conventional tobacco products would be useful to establish 

whether exposure to e-cigarette advertising is correlated 

with product use and contributes to product initiation and 

product use among young people who were not tobacco 

users to start. It bears mentioning here that a generation of U.S. youth has grown up without any television or 

billboard ads for conventional cigarettes. In this context, 

research is needed to understand at what age young people 

understand that e-cigarette advertising depicts the use of 

e-cigarettes rather than the smoking of conventional cigarettes and to examine whether there are spillover effects 

of marketing for e-cigarettes on the use of conventional 

tobacco products.

In the study from Hawaii (Pokhrel et al. 2015), 

researchers examined the association between exposure 

to e-cigarette advertising and product use using a convenience sample of approximately 300 college students in 

that state. The study found that more frequent exposure 

to e-cigarette advertising—as measured by exposure in 

any of multiple channels (e.g., newspapers, magazines, 

Internet, television billboards, sporting/cultural events, 

convenience stores, gas stations, grocery stores, and 

malls)—was associated with significantly higher odds 

of ever using e-cigarettes, and receptivity to e-cigarette 

advertising was associated with higher odds of past-month 

use, even after adjustments for smoking status and individual demographics.

Two studies strongly support the association between 

exposure to e-cigarette advertising and youth susceptibility to and use of e-cigarettes (CDC 2016a; Mantey et al. 

2016). Both studies examined data from the 2014 National 

Youth Tobacco Survey, a survey of more than 20,000 U.S. 

middle and high school students. The studies assessed 

self-reported levels of exposure to e-cigarette ads on the 

Internet, in newspapers and magazines, at retail stores, 

and on television or in movies, and used multivariate 

logistic regression models to examine the relationships 

between marketing exposure and e-cigarette susceptibility 

and use. Exposure to each type of e-cigarette marketing 

was significantly associated with increased likelihood of 

ever having used and current use of e-cigarettes among 

middle and high school students (CDC 2016a; Mantey et 

al. 2016). Exposure was also associated with susceptibility 

to use e-cigarettes among current nonusers. In multivariate models, as the number of channels of e-cigarette 

marketing exposure increased, the likelihood of use and 

susceptibility also increased (Mantey et al. 2016).

One concern is that e-cigarette advertising may 

perpetuate dual use of conventional cigarettes and 

e-cigarettes, a concern that comes from the visual depictions of e-cigarette use that may serve as smoking cues 
Activities of the E-Cigarette Companies 171

E-Cigarette Use Among Youth and Young Adults

to current and former smokers of conventional cigarettes, increasing the urge to smoke and decreasing intentions and efficacy to quit or abstain from smoking (Glynn 

2014; Grana and Ling 2014; Maloney and Cappella 2016). 

Consistent with cue-reactivity studies about conventional 

cigarettes, exposure to e-cigarette use in a laboratory was 

associated with increased urge to smoke conventional cigarettes among smokers and an urge to use e-cigarettes 

among users of that product (King et al. 2015). Whether 

exposure to depictions in advertising of the use of 

e-cigarettes triggers urges to begin or continue to smoke 

conventional cigarettes or weakens users’ resolve to quit 

has received little attention. This is particularly important 

because rates of cigarette smoking among youth in the 

United States are at an historic low (CDC 2014).

Associations with Knowledge, Risk Perceptions, 

and Other Attitudes 

Advertising is an important source of information 

about e-cigarettes for youth and adults (de Andrade et al. 

2013; Pepper et al. 2014a), and there is emerging evidence 

about how unregulated advertising for e-cigarettes may 

influence consumer perceptions about product safety. 

One study of adolescents (Farrelly et al. 2015) and three 

studies of adults (Pokhrel et al. 2015; Sanders-Jackson 

et al. 2015b; Tan et al. 2015a) examined the associations 

between exposure to e-cigarette advertising and knowledge or perceptions of these products.

Among U.S. adolescents (13–17 years of age) who 

had never used e-cigarettes, a single exposure to a set of 

four televised advertisements was associated with significantly higher odds of agreeing that the products can be 

used without affecting those around you and with lower 

odds of agreeing that the products are harmful (Farrelly 

et al. 2015). Compared with the control group, the treatment group reported significantly more positive attitudes 

about the benefits of using e-cigarettes. Elsewhere, in an 

online survey representative of U.S. households, 57% of 

young adults (18–34 years of age) were aware that some 

e-cigarettes contain nicotine, but more frequent exposure to e-cigarette advertising at point of sale, in mass 

media, and in social media (the three variables combined) 

was associated with a significantly higher likelihood of 

answering this question incorrectly (Sanders-Jackson 

et al. 2015b).

In the previously cited study of college students 

in Hawaii (Pokhrel et al. 2015), greater receptivity to 

e-cigarette marketing—but not more frequent exposure 

to the advertising of these products—was associated with 

significantly greater endorsement of beliefs about harm 

reduction for e-cigarettes (e.g., safer, improves health, 

helps to quit). A  different study referred to an online 

survey of U.S. adults (the Annenberg National Health 

Communication Survey [ANHCS]) in which surveyors 

measured the frequency of exposure to e-cigarette advertising (point of sale, mass media, and social media) and 

the degree to which participants perceived those messages as negative or positive (Tan et al. 2015a). Compared 

with those who reported no exposure to advertising, 

those who held negative perceptions of these messages 

reported significantly greater perceptions of harm from 

breathing e-cigarette vapor. Taken together, the available 

evidence suggests that continued exposure to unregulated 

advertising likely promotes reduced perceptions of harm 

and toxicity and increased perceptions of the efficacy of 

e-cigarettes for quitting conventional cigarettes.

Whether the increasing amount of advertising and 

promotional activities for e-cigarettes serves to renormalize the smoking of conventional cigarettes—that 

is, to shift public norms back to acceptance of cigarette 

smoking—is also not known. In focus groups of adult 

smokers 45 years of age and older, participants expressed 

almost unanimous agreement, after seeing selected ads, 

that e-cigarette advertisements promote smoking as 

a socially desirable behavior (Cataldo et al. 2015). The 

analysis by Farrelly and colleagues (2015) also looked at 

outcomes for conventional cigarettes. After exposure to 

e-cigarette advertising, there were no significant differences between the treatment and control groups on intentions to smoke conventional cigarettes, attitudes toward 

those products, or perceived harm from cigarettes (even 

though there were differences between groups on their 

perceptions of e-cigarettes, as noted previously).

The study that used data from the ANHCS also tested 

the hypothesis that greater exposure to e-cigarette advertising was associated with weaker support for restricting 

cigarette smoking in public spaces (Tan et al. 2015b). Both 

more frequent exposure to e-cigarette advertising and the 

degree to which participants perceived those messages as 

positive correlated negatively with support for smoking 

restrictions. However, in models adjusted for demographic 

variables, neither measure predicted support for restricting 

smoking. Further research is needed to address whether 

the large amount of advertising for e-cigarettes weakens 

support for smokefree air laws and other tobacco control 

policies or supports other potential indicators of renormalizing smoking, particularly those indicators that are known 

risk factors for tobacco use by adolescents and young 

adults, such as descriptive norms (e.g., perceived prevalence), injunctive norms (e.g., peer acceptance or social 

acceptability), outcome expectations (e.g., perceived benefits), and attitudes toward the tobacco industry. Additional 

research is also needed to assess whether e-cigarette advertising that draws comparisons to conventional cigarettes 

could serve to undermine antismoking messages.
A Report of the Surgeon General

172 Chapter 4

Evidence Summary

Although the e-cigarette marketplace is complicated 

by the differences in brands that are owned by tobacco 

companies versus independent brands, e-cigarette companies continue to change and to influence the manufacturing, price, marketing and promotion, and distribution 

of e-cigarette products and accessories. The e-cigarette 

market continues to grow, with projected sales of $3.5 billion in 2015. Consolidation of e-cigarette companies has 

been rapid, with the first major merger taking place in 

2012. These mergers and acquisitions are likely to continue, but the rate of consolidation may slow down as sales 

of cigalikes decelerate, and “vape shops” could have the 

potential to influence the e-cigarette marketplace based 

on the current structure of the marketplace and a regulatory landscape where federal regulation is just beginning 

to be implemented. All of these factors create additional 

uncertainties and risks for both the existing independent 

e-cigarette companies and the large cigarette companies. 

This chapter has shown that many of the marketing techniques used by e-cigarette companies are similar to those 

used by the tobacco industry for conventional cigarettes, 

and that awareness by youth and young adults of this marketing, and their levels of exposure to it, is high. Further, 

tracking marketing expenditures and product sales is difficult because of the rapidly changing venues, including 

“vape shops,” use of social media, and online advertising.

Conclusions

1. The e-cigarette market has grown and changed 

rapidly, with notable increases in total sales of 

e-cigarette products, types of products, consolidation of companies, marketing expenses, and sales 

channels.

2. Prices of e-cigarette products are inversely related 

to sales volume: as prices have declined, sales have 

sharply increased.

3. E-cigarette products are marketed in a wide variety 

of channels that have broad reach among youth and 

young adults, including television, point-of-sale, 

magazines, promotional activities, radio, and the 

Internet. 

4. Themes in e-cigarette marketing, including sexual 

content and customer satisfaction, are parallel to 

themes and techniques that have been found to be 

appealing to youth and young adults in conventional 

cigarette advertising and promotion.
Activities of the E-Cigarette Companies 173

E-Cigarette Use Among Youth and Young Adults

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