INMG-ALL READ THIS: NOTICE THE TITLE.."ONCE-IN-A G
Post# of 63
The Future Of Digital Marketing In A Growing CANNABIS Industry
A ‘Once-In-A-Generation’ Opportunity
“This is an opportunity that comes along once or twice in a generation,” said Chris Walsh, managing editor of the Marijuana Business Daily, a business publication that covers the U.S. cannabis industry. “From a business perspective, from the ground up, there’s tens of billions of dollars in potential.”
And those businesses will need advertising expertise to reach their target market.
“There is — and it will grow at a dramatic pace – a brand new marketing category called ‘marijuana,’” said Peter Levitan, CEO of strategic agency Peter Levitan & Co. and an investor in two medical marijuana dispensaries. “This did not exist two years ago.”
Cannabis Cowboys And Indians
But Richard Lewis, NYU marketing professor and author of a book on medical marijuana, also notes that until the federal government gives its blessing, “It’s a little bit of cowboys and Indians. There’s always going to be outlaws who try to get in early and sort of [skirt] the law and then some will make money, but it’s still a few years away.”
For his part, Kris Krane, a managing partner at 4Front Advisors, a marijuana business consulting firm, estimates legalization will happen “somewhere between three and 20 years, but probably on the shorter end of that.”
He sees 2020 as a big year, particularly since 2016 will see legalization ballot issues in numerous states, which could help to change the political conversation and even get the backing of some politicians if they see the issue as a popular one. But, at the same time, he notes the U.S. will get a new president in 2016, which could also have a huge impact on how legalization plays out.
Walsh agrees that before the marijuana industry reaches its true potential, it will have to either become legal on a federal level or the federal government will have to formally give states power as, at the end of the day, it’s still an illegal substance, which throws up a lot of hurdles of advertising and marketing.
‘A Great Opportunity’ For Agencies
And that explains the hesitancy from some ad agencies to touch the burgeoning industry while it is federally illegal even though it is likely a tempting space. And this means there’s something of a David and Goliath situation with an opportunity for smaller agencies to capitalize while the Goliaths’ hands are tied.
According to Lewis, smaller agencies will likely dig in first because they have less to lose. And larger agencies aren’t going to follow until the industry is “on very solid ground.”
Agency Vladimir Jones is perhaps a good example. It has worked with marijuana-infused products brand Dixie Elixirs.
Krane agrees this is likely more fertile ground for smaller boutique agencies, pointing to the large corporate clients of big agencies that might be less comfortable with marijuana, as well as smaller firms popping up that cater specifically to the cannabis industry.
That includes Oregon-based Maya Media Collective, as well as Colorado-based Cannabrand.
“In one sense, it’s legal, but in another sense, it’s incredibly illegal and there’s this tension that is making it either very difficult for some people to market in the industry or a great opportunity because some people are savvier than others,” Levitan said.
But Samantha Chin, director of marketing at PotGuide.com, a marijuana-focused travel guide, doesn’t think major agencies will stay away much longer.
“Yes, there is still a stigma around the ‘green rush’ but as we’ve seen in Colorado in 2014, the state received over $60 million from taxes, licenses, and fees. Simply put, money and opportunity talk. So as legalization continues to spread across the country, more and more businesses are going to need marketing and advertising efforts to help them stand out among the competition,” Chin said via email. “I think of the cannabis industry like the latest digital age – if you’re not online and using digital and social media marketing to create incredible brand awareness, then you’re really late to the game.”
Once a state legalizes medical or recreational use and businesses open up and they are heavily regulated, acceptance levels rise dramatically, Walsh said.
“I hear throughout the industry with anything – lawyers, consultants, software firms – and a lot of areas of the country, this is still a very frowned upon product and industry,” Walsh said. “But in the last couple of years, perceptions of the industry are shifting.”
Marketing An Illegal-ish Product Online
But offending conservative clients and/or consumers isn’t the only risk/challenge.
Advertising restrictions make marketing marijuana even more difficult.
Walsh notes that when dispensaries first started selling medical marijuana in Colorado several years ago, there weren’t any rules and so dispensaries were advertising via sign spinners on street corners with messaging about half price joints and the like, which led to public backlash, so the state ended up stepping in and regulating marketing and advertising. And when legal recreational use followed, marketing and advertising restrictions were already built in, Walsh said.
“Basically, the idea is that they can’t be in your face. You don’t see advertisements for marijuana dispensaries on TV, for instance,” Walsh said. “And even in a mature industry, it’s highly regulated, so you can’t be in a public space and part of the industry is realizing we have to be careful with how we advertise our products because we do create backlash and more restrictions.”
An additional challenge with marijuana in particular is online advertising in that major ad networks like Google won’t run ads from marijuana-touching businesses.
Lewis said he tried to advertise his book, “Pot Luck“, on Google, Bing and Facebook, but they wouldn’t take the ads.
“You would think a book would be a fairly legal product,” Lewis said. “I just thought it was horseshit, but that’s how it is. Really, we’re still in the frontier section of this business and it’s still early.”
Again, this will likely change with federal legalization and, Walsh observes, businesses can still advertise marijuana conferences on Google and almost every marijuana business has a Facebook page.
Building Brand Awareness & Driving Traffic
As a result, Walsh said a lot of marijuana advertising is relegated to the back pages of alternative weekly newspapers, as well as marijuana-focused magazines like High Times.
Websites are one means of being found via search. Good old-fashioned SEO is another option, according to Krane.
“Google won’t block you from search results. You can still do traditional SEO and you can have a Facebook page,” Krane said.
In addition, Levitan points to cannabis-friendly ad network, Mantis, which collates a large number of marijuana-related websites and has built out its own website.
Chin cites other online advertising options like Adistry, which show display ads on sites like PotGuide.com.
“That’s a business model directly attacking the problem that Google won’t let you run ads on Google and Facebook won’t let you run marijuana ads on Facebook,” Levitan said.
Also, industry-specific sites like Leafly and Weedmaps, which, like Yelp, offer reviews of dispensaries, “really help drive traffic, especially at the retail level,” Krane said.
Leafly even took out a full-page ad in the New York Times last year.
In addition, there’s the Cannabis Marketing Platform, which says it leverages audience data, along with media knowledge and programmatic buying capabilities to drive foot traffic, build brands, and expand distribution for commercial cannabis businesses.
“Cannabis-related brands are forced to either take a risk by promoting their content on platforms with unclear rules, or simply be more creative when it comes to catching the attention of a consumer on a busy newsfeed, etc.,” Chin said. “High quality content marketing is king right now, no matter what business you’re in. Again, I see some type of shift happening sooner than later.
“With this marijuana boom, comes a flood of related ancillary products and services – all of which will have a better chance of marketing online than someone who is directly touching the plant,” Chin said. “These, and a lot of the major (niche/designer) brands, will help pave the way for increase in cannabis internet marketing in the future.”
What do you expect in the future of digital marketing for the marijuana industry?