It’s no exaggeration to say that digital advertising is the future: So many of the incredible services we rely on—like email, internet searches, mapping, and others—are free because of digital ads. Already a massive market—valued at $90 billion in 2017 and projected to reach $350 billion by 2026 per marketwatch.com—we believe digital ads are going to be the single most important component in any and every marketing campaign from here on out.
What about the cannabis industry? While there are certain restrictions when it comes to digital marketing for cannabis, the same holds true: Digital advertising is the single most critical aspect of marketing cannabis, and it’s one you need to understand and get comfortable with.
In this introductory article, we’re going to provide an overview of digital marketing, including key points about:
● The Background and Role of Traditional Advertising
● Measuring Success: The Power of Digital
● Digital Ad Functionality, Performance, and Vital Stats
● Display Ads and Geo Targeting
● Benefits of Digital Ads: Measurability, Effectiveness, and ROI
● The Importance of Using a Cannabis-Compliant Platform
● How and Why to Invest in Digital Ads
The Background and Role of Traditional Advertising
Viewed one way, the only thing older than advertising is the idea of having something to sell in the first place. In the modern era, advertising was one of the primary pillars of print media such as newspapers and magazines, but you still had to pay for the privilege of reading those ads. The nation’s first free daily—the Contra Costa Times—began circulation in the 1940s, but by the mid-‘60s it had switched to the standard paid model.
But there’s an even better analogy: The sitcoms that are still staples of broadcast TV. From the audience’s point of view, they’re all more or less the same: Some are funnier or more engaging than others, but they all run roughly 22 minutes long and are broken up with two commercial breaks each.
But from an advertiser’s point of view, it’s who the sitcom appeals to—and exactly how many of those people are watching it—that are the most important details. These metrics determine how much a given advertiser will pay for those precious moments of our attention, and this, in turn, is a vital variable used to calculate any given advertising campaign’s Return on Investment (ROI).
Measuring Success: The Power of Digital
Even before TV became the dominant form of entertainment, the Nielsen ratings were measuring the number of TV sets in use and the number of viewers tuned in to a specific program. But as we’re about to see, while these ratings may once have been the cutting edge in audience tracking, the power of digital advertising to quantify audience habits and actions in real-time represents a quantum leap in terms of power and sophistication.
Because digital ad servers are largely powered by Artificial Intelligence (AI), they have a nearly limitless capacity to track and organize audience metrics, including their purchase and browsing histories and habits, the best time of day to engage them, and best channel (via browsing, push notification or email). All these factors and more are used to construct and fine-tune incredibly specific approaches on a customer-by-customer basis.
Digital Ad Functionality, Performance & Vital Stats
Let’s start with the very basics. In essence, there are four basic categories of digital ads:
Display Ads: When you visit a website that’s agreed to run ads on its pages, you’ll see these banner-style ads interspersed at the top, bottom, and side margins of the page.
Video Ads: In a sense, these are no different from the Display Ads that appear on the pages of websites that host ads. But the advent of ultrafast 5G technology, video is becoming much more ubiquitous on the web. In the coming years, video is projected to become the dominant style of digital ad.
Social Media: When you scroll through a social media site such as Facebook or Pinterest, you’ll see ads that may look like posts from friends. Although they’ll be labeled “Paid Post” or “Sponsored Content,” they’re actually digital ads hosted by the social media site. While most of these platforms impose strict restrictions on cannabis-related content, there are ways to successfully promote cannabis businesses on social media. Ask us how.
Paid Search: When you enter a search term into Google (or Bing, or any other search engine), the results you see aren’t all the most relevant ones! They’re a mix of websites the engine has deemed the best matches along with those boosted to the top of the page by ad buys. To learn more about this process, read our Guide to PPC.
Display Ads & Geo-Targeting
Let’s dive a bit deeper into Display Ads and how they work. There’s a specific aspect of Display Ads called “Geo-Targeted” or “Local PPC” that makes them particularly important for dispensaries.
Because an increasing proportion of web searches are done via mobile devices, the question of where a specific user is physically located when they’re performing that search becomes a hugely important piece of data. By correlating that person’s query—such as “best CBD concentrates”—with their physical location, Local PPC is a powerful driver of foot traffic, and it’s one that’s only going to grow in importance.
Benefits of Digital Ads: Measurability, Effectiveness & ROI
One of the biggest reasons we rely on digital ads is their measurability, effectiveness, and ROI.
Let’s return to the television analogy for a moment. Essentially, the cutting edge of audience quantification consists of measuring the number of TV sets in use and the number of viewers tuned in to a specific program, whether through self-reporting or through a dedicated usage-tracking device piggybacked onto the television set.
In terms of measurability, it’s a fairly weak arrangement, providing only the crudest of metrics. By contrast, digital ads make it possible to capture, organize—and, most importantly, effectively utilize—dozens of data points associated with each customer.
How does this work in the real world?
Unlike print or television, digital ads are endlessly personalizable. Two people browsing the same website can see two different ads based on their histories, interests, recent visits to your dispensary—or just your website—and dozens of other variables. Given the accuracy of AI-powered predictive models of behavior, the power of these dynamically generated ads is, frankly, astonishing.
Measurability leads to effectiveness. By constantly comparing the impact of different campaigns, channels, and approaches—again, on a customer-by-customer basis—marketers using AI-powered tools can fine-tune their efforts with increasing accuracy. And effectiveness leads to the Holy Grail: ROI. We believe that out of all the components of a successful dispensary marketing campaign, a well-planned and executed digital advertising effort consistently delivers the highest ROI.
If you need persuading, just look at the numbers: According to most analysts, 2019 was the year that digital ad buys overtook spending on traditional ads, a trend that’s only accelerating. Increasingly, “advertising” is going to mean “digital advertising.” Don’t be left behind.
The Importance of Using a Cannabis-Compliant Platform
As we hinted above—and as you’re probably well aware—there are a host of restrictions and limitations on advertising for the cannabis sector. What’s more, these restrictions are highly localized, which means they apply on a state-by-state and often municipality-by-municipality basis.
What does this mean for you?
For starters, it’s essential that any digital marketing for cannabis you run ias served by what’s known as a cannabis-compliant platform. All the work of combing through various state and local statutes is done on the backend, and the filtering or modification of the content is invisible both to your audience and—just as importantly—to yourself. You don’t have to worry about potential violations, and all your potential customers see are polished, high-quality, and expertly targeted ads. Want to know how it works? Give us a call.
How & Why to Invest in Digital Marketing for Cannabis
By now, the answer to this question should be clear. Based on their almost limitless customizability, their multiple options for measurability, and most of all their demonstrated (and growing) effectiveness, digital ads should be at the heart of any dispensary marketing effort.
We’d love to tell you more. At Foottraffik, we’ve helped countless dispensaries—from mom-and-pop startups to leading national chains—to launch their businesses, broaden their reach, and gain valuable market share. Schedule a call today to learn more.