The Beginner's Guide to Programmatic Advertising in Cannabis

Cannabis retail is growing and with it, dispensaries are ramping up their marketing and advertising efforts to compete online.

But historically, marketing in cannabis has been tricky. Businesses don't have traditional access to many digital advertising and marketing channels, meaning some ads are restricted or not allowed at all.

Surprisingly, a media buying method called “programmatic advertising” actually allows you to advertise your cannabis business across digital sites like ESPN, New York Times, Rolling Stone, and within apps like WeatherBug and Words with Friends.

An opportunity to reach mass audiences with the right message is directly accessible and a game changer for cannabis retailers.

But, what does the term "programmatic advertising" mean in cannabis?

Programmatic ad-buying solutions use data analytics, behavioral insights, and precision retargeting to tailor compliant cannabis ads to the right person, at the right moment, on the right device, and in a brand-suitable context.

How does programmatic advertising work?

Marketers sometimes shy away from programmatic advertising because it sounds complicated and confusing. But in reality, you see hundreds of these ads on a daily basis while scrolling through news apps, playing games like Soduko or visiting dating apps.

Fueled by artificial intelligence (AI), and leveraging real-time bidding (RTB), programmatic advertising makes it easier for cannabis businesses to effectively reach 21+ compliant audiences with precision and scale.

Moreover, programmatic advertising is a powerful and trackable alternative to its physical counterparts, like billboards. You can easily track KPIs like impressions, revenue, and return on ad spend (ROAS) and view the multi-touch buyer's journey each customer went through before making an eCommerce purchase.

How can programmatic advertising help cannabis businesses?

Programmatic advertising helps cannabis businesses by offering a compliant way to advertise across 75,000+ publishers. This is online advertising power like they've never had before.

More specific benefits of programmatic advertising are:

A cookieless future

With programmatic advertising, you no longer need to worry about using any tracking cookies. Tracking cookies had become a way of life for digital marketers. However, over the last few years Google, Mozilla, and Apple have announced their plans to phase out tracking cookies from their browsers over privacy concerns.

Fortunately, programmatic advertising doesn't rely on cookies. As a result, this marketing technique is compliant and does not take advantage of consumer privacy.

Programmatic audience segments

Instead of using cookies, marketers can leverage first and third-party data to create audiences based on preferred demographics and buying behaviors.

Breaking customers into groups that purchase flower, vapes, edibles, pre-rolls, drinks, or concentrates allows you to target the categories that make sense for your dispensary. Then you can serve audiences ads they are most likely to engage with.

Precision targeting maximizes the value of the money you spend since you'll only target the specific audiences who are most likely to make a purchase. It is a powerful tactic to find and attract potential new buyers and gives you more insight into your campaigns than a traditional digital media blitz could provide.

You can target more than just behaviors and demographics, too. With programmatic advertising, you can easily deliver ads to customers across all of their devices. That includes phones, computers, tablets, and more.

Setting geofencing parameters

Aside from the data above, you will also use geotargeting to supercharge the delivery of your campaign. Geotargeting is an essential parameter for your cannabis company's programmatic advertising campaign.

First, focus campaigns in specific areas that have high numbers of targetable device IDs in your defined audience segments. Then, decide which towns and zip codes will get you the most traction for running your ads. You can also pursue a target number of impressions depending on your budget.

Think of your geofenced perimeter as an on-switch. When your target audience’s devices enter your polygon during your campaign and browse an app or site on their mobile device in your network, your ad will serve an impression.

Here are a few ways you can leverage geofencing:

• Radius Targeting: Target consumers within a certain radius of your dispensary or delivery area.

• Competitor Targeting: Lure customers away from the competition by targeting competing retailers to gain market share.

• Landmark Targeting: Like competitor targeting, draw a polygon on a map around the high-traffic tourist areas you want to target.

Before you begin: Make sure your campaign is compliant

Normal marketers don’t think about breaking laws very often. But in the cannabis space, things can get a bit tricky. That's because states have variations in their cannabis marketing rules.

There are rules you must follow to ensure your programmatic campaign stays compliant, such as:

1. Never make any claims or suggestions about health benefits. This is the most important rule to follow!

2. Never include any material that might appeal to children. Cartoon mascots are at the top of the list here – think of “Joe Camel” here.

3. Avoid any false or misleading statements, whether it’s about you or a competitor.

There are also rules that are a little less obvious, but no less important:

1. Don't include any testimonials or endorsements in your ads. Generally, this kind of information would be a pretty big aspect of a digital ad campaign. But in the cannabis industry, you're asking for trouble.

2. Never show anyone consuming cannabis in your marketing materials.

3. Some states don’t allow you to advertise promotions or discounts. Other states may require you to display your license number or mention that cannabis is for adult use only in your ad. Make sure you do your homework.

This ebook from Mediajel breaks down state-by-state advertising regulations for cannabis businesses.

Designing your programmatic creative assets

After setting your audience and location parameters, you’re ready to run your campaign. Like any other marketing campaign, one of the most important parts of your advertising platform is your creative assets.

Landing pages

One critically important asset of your programmatic camping is your landing page.

Strong landing pages include:

• A unique selling proposition (USP)

• A hero image or video

• Some kind of social proof

• An outline of the benefits you're offering.

• Keep in mind you should only include one single conversion goal (this is your CTA or "Call to Action").

You can also send ad traffic directly to your ecommerce menu or cannabis product page to reduce extra clicks that can discourage customers and increase your bounce rate. For example, if your ad is for bulk flower, add a link that takes a customer directly to your menu page for those deals. If you are sending traffic directly to a menu page, make sure that page has all the information required to make a purchasing decision.

Be very specific in how and where you want to drive your traffic. Whether the campaign goal is to make a sale or acquire a delivery sign-up, ensure your landing page has one clear Call to Action.

Ad creative

Potential customers must see your brand (and be aware of it) several times – potentially dozens – before they decide to make a purchase. To ensure they eventually convert from a viewer to a customer, implement the following design best practices.

• Choose your images carefully. Remember that animated GIFs tend to stand out more than static images.

• Make sure your brand name and logo are clearly visible.

• Clearly display whatever you're advertising. Mention your products by name, like CBD, specific strains, different types of products – whatever it is you're selling.

• Prominently feature any discount or special you're offering.

Just like a landing page, an ad page should also have a Call to Action. Finally, you'll want to ensure you include UTMs and tracking pixels for both your ad and landing page. If you don't have the capacity to do any of these tasks in-house, an agency can do them for you.

Here are programmatic cannabis ad creative examples:

Standard display dimensions

Making sure your display ad is the right size is just as important as including the correct information within it. Here are some of the most common ad sizes for mobile and desktop campaigns. Make sure you're using a PNG, JPG, or GIF with a file size between 200 and 500 KB.

The image below from Rank Fuse shows optimal image sizes for display ads.

Remember to review your ad campaign

Programmatic advertising isn't a "set it and forget it" type of campaign. Instead, you'll want to keep a careful eye on KPIs throughout its duration. This data will help you optimize your campaign and ultimately see better results. Using data to improve your programmatic campaign's parameters is one of the most important aspects of a CBD or cannabis marketer's job.

KPIs to watch

You can only really review how successful a campaign is if you have something to measure. That's where your KPIs come in. Some important ones include:

• Impressions, In-View Rate, or Video Completion Rate

• Conversions and Conversion Rate

• Return on Ad Spend (ROAS)

• Creative Performance (using A/B testing)

• Number of Clicks or Click-Through Rate (CTR)

• Geographic Performance

• Total Revenue

The main goal of your campaign is to move cannabis or CBD products and generate brand awareness and revenue. But the insights you gain from your campaign's feedback are also valuable. At the end of the day, the point of a programmatic advertising campaign isn't just to drive clicks. It should also offer insight to help bring your business and consumer engagement to the next level.

As a cannabis marketer, your goal is to attract new customers and re-engage with current ones. Programmatic advertising gives you that ability on a super-granular level. What's more, it's a way to efficiently segment audiences based on their purchasing habits – make sure the flower smokers get the flower ads, not the ones for dabs.

Automate everything with the right programmatic platform

Programmatic advertising looks like a ton of work–and it is if you don’t work with a provider who specializes in it.

MediaJel is a leader in the cannabis advertising space and specializes in programmatic advertising for cannabis businesses and brands.

If you're looking for a team of experts to take care of your programmatic advertising campaign, contact me at jake@mediajel.com, on LinkedIn, or reach out to us at MediaJel.com.

You can also learn more about programmatic advertising here.