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The Power of TV for CBD Brands

By James Kozack
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With the death of Facebook arbitrage, direct-to-consumer (DTC) marketers are forced to look for new ways to drive sales more quickly than ever before. Enter TV. Once seen primarily as a branding medium, DTC brands are now using television to drive online and in-store sales. The continued growth and sophistication of attribution modeling in television has allowed marketers and their agency partners to more directly measure television’s impact on KPIs.

But what if you are a brand that can’t be on Facebook or Google due to ad restrictions?  Or your potential customer base is spread across multiple demographics? TV is a great, if not the only, way to reach CBD customers on a mass scale. CBD brands face the same challenges that all DTC brands face with the added bonus of additional restrictions due to product perception, and can also vary drastically state-by-state around the country. These restrictions however, also create a huge opportunity for the savvy marketer to dive in and own share of voice in the CBD market. With Facebook off the table, CBD brands are spared the expense of learning that Facebook arbitrage no longer exists. The opportunity to scale an emerging CBD brand on TV has never been more accessible.

The acceptance of CBD brands on television still faces restrictions as each network group has their own standards and practices. However, the number of networks accepting CBD products grows by the day. As education and understanding around the efficacy of CBD increase, so are the networks’ willingness to accept advertising. Remember, there once was a time when liquor brands couldn’t advertise on TV!

Looking at other media platforms for reaching potential CBD customers through advertising, terrestrial radio also provides very strict guidelines, if allowed at all; the same can be said for digital options and satellite radio. Whereas podcasts are a popular option due to regulations mostly being decided upon by the podcast’s producers, it’s hard to compare the reach to consumers of podcasts vs. television.

The nuances of navigating the media landscape for CBD brands remains complex. The opportunity to capture market share through TV is wide open. The CBD brand who recognizes this and acts most quickly has the chance to become the undisputed brand leader in a market that projects to exceed $45 billion by the year 2024.

What are you waiting for?

Communications in Cannabis: The Playbook for Branding Success

By Trisha Larocchia
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Public relations has a role to play in every industry, providing value for companies looking to promote their services, announce a recent fund raise or want to plant a flag in their domain as a leader or subject matter expert. Some industries, however, are writing a new playbook for the way PR is done. The cannabis space is a prime example of how PR can – and has – evolved in such a short amount of time. This industry has been a part of N6A’s DNA since 2017 when we created a cannabis-specific client service group. Since then we’ve seen the ups and downs, rapid changes and overall growth in an industry that, at the time, very few took seriously. We knew the potential was there, but we couldn’t be prepared for how foreign this would be compared to our other specialties like tech, cybersecurity and professional services.

We had to forget what we knew as media professionals and develop new plays and strategies for an industry in its infancy – all while bearing in mind the plant’s polarizing past and ambiguous future. With so many lessons learned about the way the cannabis and communications industries operate together, here are just a few key takeaways that have shaped our approach and operations in the marketplace.

Build Relationships Across the Board 

It’s often said “it’s not what you know, but who you know,” and in cannabis this couldn’t be more true. While the industry is growing rapidly, it’s still considered a tight-knit community where everyone talks to each other, and leaders lean on one another for expertise and guidance. A competitive nature is inherent in any business environment, but what I’ve noticed about those working in cannabis is that everyone is striving for the same goal: to further legitimize an industry plagued with stigma. Whether it’s developing media contacts or a new business prospect, the foundation lies in building relationships with the key players in the space.

This dispensary ad appeared on Variety.com

From a PR perspective, this includes working closely with the reporters dedicated to the cannabis beat, whether they write for a trade or mainstream publication. Journalists are shifting between jobs faster than ever before, and this beat favors industry veterans. One day your “friendly” at an obscure cannabis outlet will suddenly be spearheading coverage at The New York Times, Rolling Stone or other iconic publications. For the sake of clients and their desired business outcomes, communications professionals should foster ongoing conversations with any reporter interested in covering cannabis; you never know where it could lead.

Understand the Limitations 

Both public relations and advertising have proven to be instrumental in normalizing cannabis businesses within the mainstream media. However, communication in the space can be a compliance minefield due to strict state and federal regulations. While the industry’s growth is nothing short of explosive, opportunities for advertising are extremely limited as the largest digital platforms such as Facebook and Instagram have banned cannabis ads, forcing companies to look for other options.

Paid media has its time and place in every industry, but with so much red tape in cannabis advertising, it provides an opportunity for earned media to take the stage. Aside from a few key trades we all know well, journalists across business, lifestyle, finance and retail verticals are covering the space. Depending on what a business is looking to gain from PR, these initiatives are a great way to get directly in front of the audiences they want to reach without the risk of violating certain advertising guidelines. Companies that are ancillary, and therefore not selling a particular cannabis product, also have a bit more flexibility when it comes to advertising, especially on social media channels. As the industry sophisticates, the demographic of consumers does as well.

Evolve with the Industry 

The cannabis marketplace as it stands today is vastly different than when we began to service clients years ago. For decades, this industry operated in the shadows and outside of the law, but as legalization spreads across the globe, the way that businesses position and talk about their brand has had to change.

Gone are the days of reefer madness as consumers begin to see cannabis as medicine or a wellness supplement. With this comes a significant reduction in the use of words such as “weed,” “stoner,” and even “marijuana,” while words like “cannabis,” “medicinal” and “patients” step into the forefront. Both communications professionals and businesses must be hyper-aware of the verbiage we use if we want to professionalize the industry and fuel worldwide adoption.

As the industry sophisticates, the demographic of consumers does as well. What was once reserved for a younger, male population has now been growing in popularity amongst women, baby boomers, and the elderly. Cannabis businesses are now forced to diversify their messaging to appeal to the masses which often includes taking a minimalistic approach to branding and packaging.

Consumers are no longer looking for the lowest prices, but a brand that they know and trust. Recognition, whether it be locally or nationally, can be gained through a strong communication plan and will become increasingly imperative for long-term success.

Here’s How to Run Compliant Digital Cannabis Ads

By Brett Konen
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Advertising your cannabis brand isn’t as easy as it should be—but then again, neither are most things about working in the modern cannabis industry. Here’s the good news: Today there are more avenues available for compliantly advertising your cannabis brand than ever before, particularly online.

So why don’t more cannabis brands run compliant digital ads? Generally speaking, it’s an issue of awareness. Since cannabis brands are currently disallowed from running their advertising campaigns through the modern digital advertising mainstays of Facebook, Instagram, and Google, most business owners believe that digital advertising as a whole is not allowed, and thus most cannabis companies are either underutilizing or completely overlooking their digital ad options.

In fact, the rules barring cannabis brands from advertising with Google and Facebook are specific to those platforms. While Facebook and Google—together known as “the Duopoly”—currently account for approximately half of digital advertising dollars spent in the U.S., the other half of the digital advertising pool—including sites like ESPN, HuffPost, Newsweek, Politico, Barstool Sports, and USA Today—is increasingly open to accepting ad buys from compliant digital cannabis and CBD advertisers. More publishers are opening their doors to cannabis ads every day, and many advertising professionals speculate that the COVID-19 pandemic may speed up the process, as publishers begin to look for new streams of ad revenue in order to weather the economic storm.

Where Can Cannabis Be Advertised?

Today, cannabis industry advertisers can easily run ads across hundreds of mainstream websites using programmatic advertising technology. This is true for both cannabis brands and CBD brands, though they use different programmatic platforms to do so: CBD brands (which we’ll address in more detail later) can use mainstream “demand-side platforms” (such as The Trade Desk) to run their ad campaigns, while cannabis brands can use new cannabis-specific platforms (such as Safe-Reach) created to address the unique compliance needs of the legal cannabis industry.

For those unfamiliar with the term, programmatic advertising refers to the automated buying and selling of online ad space using programmatic technology. In a nutshell, advertisers and their ad agencies use demand-side platforms (DSPs) to set the parameters of “bids” for certain ad impressions based on relevant attributes of the ad space and the viewer who will see it. Publishers put their ad space up for auction via supply-side platforms (SSPs), and ad exchanges play matchmaker to sell the ad impression to highest bidder in the time it takes the web page in question to load.

This CBD product ad can be found on Thesaurus.com

Cannabis-specific DSPs work with other cannabis industry leaders to develop sets of data relevant to cannabis advertisers; they then open these data sets within their platforms to help cannabis advertisers reach known cannabis consumers. These known consumers may be, for example, people who’ve downloaded apps like Leafly on their phones.

A key thing to note is that the cannabis ads themselves no longer need to be shown exclusively on these endemic cannabis sites and apps. In the past, digital cannabis advertisers were generally restricted to buying space on industry-specific sites like Leafly, High Times, and Weedmaps, which pushed prices up due to inventory limits and ran through ad budgets quickly. Ad networks like Mantis attempted to compile this inventory to make the buying process more scalable, but because cannabis has been (and remains) the fastest-growing industry in the United States since 2015, it’s no surprise that endemic cannabis ad inventory has been insufficient to meet demand.

Now, the data sets available through programmatic advertising technology allow ads to be shown to the same cannabis enthusiasts across any website, endemic or not. This makes digital advertising far more affordable for cannabis marketers, and allows for more advanced advertising techniques like building look-alike audiences, cross-device advertising, first-party data onboarding, and ad retargeting. These techniques can be used across all modern digital ad formats, including display, mobile, native, video and digital audio.

Still, even those marketers who are already aware that they can advertise digitally outside of Facebook, Google and endemic cannabis sites may struggle with knowing what they can say and show in their digital ads, particularly if they intend to run those ads in multiple locations or across multiple channels. The broadly applicable rules for running compliant digital cannabis ads are what we’ll discuss now.

Rules for Cannabis Ad Compliance

Thanks to cannabis’s continued federal classification as a Schedule I drug, current digital advertising regulations are governed by state cannabis laws, so they vary depending on where your business operates. This can become particularly confusing if you want to run digital advertisements visible to customers across multiple states (which some states allow—for those who don’t, cannabis ad tech will let you keep your ads within state or local borders too).

Both Ivyside and Weedmaps are featured on this page

Luckily, most cannabis bills are crafted to resemble those that have been passed successfully before them, which means that state laws can be boiled down to a handful of broadly applicable guidelines no matter where you intend to show your ads. The current best practices for advertising cannabis are as follow:

  • No claims of health or medical benefits
  • No elements that could appeal to children (cartoon characters, etc.)
  • No false or misleading statements, including those made about competitors’ products
  • No testimonials or endorsements (e.g. recommendations from doctors)
  • No depiction of product consumption
  • No pricing information, potency statements, or promotional offers
  • Ads for infused products must state “For Adult Use Only”

Using these guidelines, cannabis marketers can more easily create ads to be approved for use in a variety of settings. A few states have their own additional rules: In Florida, a state approval process for ad creative also applies. In Alaska, Arkansas, California, Maryland, Massachusetts, Nevada, Ohio, Oregon and Washington, additional state-specific copy is required in the ad creative.

Note that it’s always important to double-check your state’s most recent requirements, as local rules may change over time. If you’re working with an advertising agency that specializes in the cannabis industry, they can help you with this process; cannabis-specific programmatic platforms like Safe-Reach will also check your ad creative against local requirements as part of their approval process.

Why Advertise Cannabis Digitally?

Prior to the advent of modern, cannabis-specific digital advertising technology, cannabis marketers were light years behind their mainstream industry counterparts in terms of the advertising channels they leveraged to get their message out. Traditional advertising tactics like billboards and print ad buys were popular among cannabis businesses early on due to the lack of digital ad publishers willing to work with them.

The problem with these traditional tactics is one of targeting, measurement, and reporting: It’s impossible to know who has seen your ads, how many of those viewers went to your website or dispensary after seeing them, and what your return on ad spend (ROAS) was. The fact that you can neither know nor control who will see your ad in a print newspaper or on a billboard is why most states have treaded cautiously with their advertising restrictions to avoid ads being seen by minors. In Washington state, for instance, no advertisement is allowed “within one thousand feet of the perimeter of a school grounds, playground, recreation center or facility, child care center, public park, library, or a game arcade admission to which it is not restricted to persons aged twenty-one years or older; on or in a public transit vehicle or public transit shelter; or on or in a publicly owned or operated property.”

This dispensary ad appeared on Variety.com

With programmatic advertising, digital identity data allows advertisers to show their ads exclusively to an appropriate audience—for instance, adults ages 21 and over who live within state borders. Digital advertising also addresses the issues of measurement and reporting, which is why mainstream brands have already shifted en masse to choosing digital over physical ads: You can learn, down to the cent, the return on your digital ad investment, which makes the choice of continuing to advertise an easy one as long as ROAS remains positive. As of 2019, digital ad spending surpassed traditional (TV, radio, print, etc.) for the first time in history, and in 2020, eMarketer estimates that $151 billion will be spent on digital marketing versus $107 billion on traditional. By 2021, 70 percent of all digital ads—and 88 percent of display ads—will be bought and sold using programmatic technology.

As the fastest-growing industry in the United States, cannabis should also be one of the fastest-growing segments in digital advertising, but so far cannabis advertising efforts have been far off pace with the industry’s progress as a whole. However, that is beginning to change as savvy cannabis brands begin to understand and leverage their digital marketing options.

What About CBD Advertising?

The 2018 Farm Bill legalized hemp-derived CBD products in the United States, but did not offer guidance on selling, marketing or advertising them. Most CBD products are thus sold and marketed in a legal gray area, which is only made more confusing by Facebook’s and Google’s policies of rejecting these as “illegal drug” ads (a policy both platforms enforce irregularly). Although CBD brands should still try for approval, and some ads (especially those for hemp-derived CBD topicals) may be approved, CBD advertisers cannot rely on Facebook and Google for ongoing traffic, and ads may be taken down after initial approval regardless of legality.

That said, CBD business owners already have an even more extensive range of digital advertising options available outside of search and social than cannabis brands do. Some websites that do not yet accept cannabis ads will accept CBD ads, and mainstream ad tech platforms like The Trade Desk allow CBD ad buys as long as ad creative meets their internal guidelines for approval. Thus, the de-facto rules and regulations governing CBD advertising today are made by the platforms and publishers running their advertisements. To ensure ad approval on programmatic platforms like The Trade Desk, CBD brands should follow the same guidelines listed for cannabis brands above.

To sum up the current state of digital advertising compliance in the cannabis industry, cannabis and CBD brands should know that there are far more digital advertising options out there than most people realize, and that creating compliant ads is relatively straightforward as detailed above. That said, brands considering an investment in digital advertising should also keep in mind that the current window of opportunity for getting a head start on the competition is already closing day by day as brands begin to realize all the ways they can run compliant cannabis digital ads.


 Suggested Readings 

Programmatic Advertising: A Close Look at Cannabis (IAB)

White Paper: Digital Ads for Cannabis & CBD (PrograMetrix)