If the Hollywood stereotype of a typical cannabis consumer ever has been accurate, it certainly isn’t anymore. Over the past fifteen years, the social stigma surrounding consumption has steadily disappeared in tandem with expanding legalization, pushing cannabis increasingly into mainstream economic territory. This has resulted in a robust growth-market phase in the industry, primarily driven by rapidly increasing consumer demand across all key demographics.
In cannabis consumer marketing, the conventional strategy centered on advertising with cannabis-themed platforms and endemic publications is no longer a viable approach. Marketers must broaden their efforts. Integrating programmatic advertising tools can help cannabis marketers efficiently reach consumers directly on the platforms where they consume the most content — publications and websites that align with their interests, such as Rolling Stone, Business Insider, ESPN, or Food and Wine.
Shifting demographics
Market research over the past few years has shown an increased diversity in consumer demographics, providing new opportunities for cannabis marketers to reach potential targets. Data from Headset market research in 2020 shows a wide generational breakdown for consumers, with spending rising across all age groups except the silent generation. That group spent 18 percent less on cannabis in 2020 than in 2019 (declining from $50 million to $41 million), but the generation also was the hardest hit by the coronavirus pandemic. Millennials, on the other hand, spent 46 percent more ($4.4 billion), making them far and away the most significant group of cannabis consumers (more than doubling the 2020 impact of Gen X, the next most significant group, which spent $2 billion). Though Gen Z’s spending total was second lowest, the group showed the greatest increase—a whopping 127 percent, to $855 million.
In addition to the generational spectrum Headset’s data revealed, 2019 market data from the National Survey on Drug Use and Health showed a broad education level for potential consumer targets:
- Some college/associate’s degree: 21.5 percent.
- High school graduate: 17.5 percent.
- College graduate: 15.8 percent.
- Some high school: 15.7 percent.
This educational data breakdown stands in stark contrast to the cannabis consumer stereotype and forms a general consensus with data from the Pew Research Center on the educational level of millennials — who just so happen to dominate the cannabis market.
Hitting the target
So how do cannabis marketers reach these new target audiences? The answer: programmatic advertising.
Programmatic advertising leverages custom software solutions to manage the process of buying digital advertisements. These purpose-built applications include the digital capabilities all marketers need, such as demand-side platforms, supply-side platforms, and real-time bidding.
The evolution of these platforms has risen to alleviate the back and forth of traditional processes involving requests for proposal, negotiations, and manual ordering. Additionally, programmatic options provide effective and practical substitutions for the hyper-targeted digital advertising abilities of social media platforms like Facebook, Instagram, and Twitter, which do not allow cannabis advertising.
Over the past twenty-four months, programmatic solutions have become more accessible to cannabis marketers, quickly outperforming archaic strategies and creating a clear distinction between marketers who leverage these tools and marketers who do not.
Benefits of enhancing a cannabis marketing strategy with programmatic advertising solutions include:
Maximum transparency. Programmatic advertising solutions give marketers true transparency and oversight over ad placement and activity, providing them with valuable information about traffic, customer exposure to ads, and advertising space costs. Not only does this give marketers the ability to protect client brands from undesirable ad placements, but it also provides critical data they can leverage to inform their marketing strategies.
Real-time insights from enhanced reporting. From data comes value. The enhanced reporting benefits provided by programmatic advertising solutions make leveraging data easy, tracking valuable data points like ecommerce sales, retail foot traffic, consumer engagement, and audience information. This information can be accessed in real time, providing immediate insights that can be applied across a marketer’s entire media mix for any campaign.
Increased efficiency. Programmatic advertising solutions are more sophisticated and refined than ever. Marketers can effectively manage vast campaigns from end to end, making adjustments in real time to optimize processes, lower costs, and maximize reach.
Better targeting. Programmatic advertising solutions provide impressive targeting applications, allowing marketers to isolate variables across the market spectrum. This substantially improves specialized targeting efforts, giving marketers the power to either isolate or integrate different target locations, income levels, keyword-associative indicators, etc.
Cannabis consumer marketing
While the above benefits are profitable in every market category, the application of programmatic advertising in the cannabis industry is particularly valuable. Cannabis is a highly complex market. Not only do marketers face similar challenges to those in the alcohol, tobacco, and pharmaceutical categories, but they also are forced to juggle state-by-state legislation and confusing advertising regulations.
Programmatic advertising solutions can improve this experience for marketers. Through geo-location, cannabis marketers gain the ability to hyper-target consumers with precision and accuracy in specific states, designated market areas, cities, and other discrete locations, allowing seamless campaign activation across multiple areas without risking compliance issues.
In addition, programmatic advertising provides all the conventional benefits on which marketers in every category have come to rely.
Ad retargeting. Ad retargeting focuses on maximizing engagement from clients who previously interacted with an established brand—think prospects who already have visited a brand’s website or ecommerce environment. This is critical for companies trying to scale, as it helps ensure repeat customer sales.
Mobile ads. Mobile devices have become an integral part of our daily lives. Vast swaths of the millennial consumer market spend several hours a day on their mobile devices, and as Gen Z begins to reach legal age and expand its percentage of the consumer market, advertising through mobile applications becomes increasingly imperative.
Display ads. These ads are the entry point for programmatic advertising. Brands that want to drive awareness and engagement with scale can saturate the market effectively. This is the easiest way for brands to access millions of websites (Car and Driver, ESPN, Barstool Sports) and apps (gaming, sports, recipes, utility) previously unavailable to them.
Video ads. For marketers with storefront operations, video advertisements present an opportunity to display a brand in action. This has been utilized most noticeably by businesses focusing on tourism, which sell out-of-state consumers on the quality of available products and the excellence of an establishment. Video ads are one of the best ways to associate a brand with a lifestyle.
Native ads. Running native ads on mainstream websites and platforms is useful for more than generating traffic for a specific client; it’s also beneficial to the industry as a whole. Native ads blend into the surrounding content on a website or platform, helping to legitimize and normalize the industry by association with everything around it. This is critical for circumventing residual stigmas (as well as addressing the ad-targeting changes being enforced by Apple and Google): With each successful native cannabis ad on a mainstream platform, every subsequent native ad becomes more effective.
Cannabis marketers don’t have to settle for ad space on an endemic platform that will reach only a subset of the market. Premium publications, mobile applications, and mainstream platforms are where the market really is. Shouldn’t that be where the advertising is too?
Sam Hollander is an accomplished sales, business development, and project management executive with expertise in digital marketing and advertising solutions. With nearly fifteen years of progressive experience in roles with the Los Angeles Dodgers, Showtime, PHD Media Group, and National Geographic, he works to develop Enlighten’s cannabis and CBD programmatic advertising platform.
