“From Bloom to Boom” – Programmatic Accelerates Cannabis Advertising

“From Bloom to Boom” – Programmatic Accelerates Cannabis Advertising

In early 2020, IAB’s Data Center of Excellence recognized how the cannabis advertising category benefited from the principles of programmatic media buying, yet there was a lack of understanding and even fear within the media community to consider it. Cannabis, a category that is projected to reach $30 billion in revenue by 2025 (Source: Forbes.com, September 2019) has some built-in issues IAB addresses in Programmatic Advertising: A Close Look at Cannabis published this week. This guide educates the digital marketing community on the value programmatic brings to cannabis, a complex ad category where many federal and state-by-state regulations, creative restrictions, consumer privacy, and bias impact decision-making. This guide is your first step in understanding how you can more confidently engage in cannabis advertising.

Let’s examine this category in more detail and some of the reasons advertising Cannabis online makes sense.

Programmatic Identifies the Right Audience: Cannabis is a federally regulated product category with many state-by-state restrictions on the age of the legal customer, often age 18+ or age 21+ apply. Programmatic age gating protects brands and publishers from promoting the product to the wrong customer.

Nicole Cosby, Fyllo’s Chief Data & Compliance Officer who co-chaired IAB’s Programmatic Advertising: Cannabis Working Group states, “At Fyllo we recognized early that the cannabis industry was poised to go from bloom to boom, but in order to do so we needed to develop a compliant, scalable and efficient martech offering for both cannabis advertisers and the programmatic ad tech industry as a whole.”

Location is Everything: Given the constantly evolving state-by-state variances in legally selling cannabis, location-driven programmatic targeting creates a compliant environment for brands in ways other media buying often cannot. This precision reinforces the flexibility of automated buying and the ability to reach the right customers in the right, and in this case legally allowable, place.

Digital Fastest Media to Address Change: In the wake of the coronavirus pandemic, governors across the U.S. declared state-by-state shelter at home orders, 20 states named cannabis as an essential product allowing curb-side pick-up rather than in-store or dispensary purchases. Digital media functionality was able to quickly pivot messaging to address this development allowing Americans the ability to receive products used to treat a slew of conditions including anxiety, seizures, pain, nausea, and stress.

The Company You Keep: In the current media zeitgeist brand safety and suitability have become one of the most discussed hot button issues. At the onset of the coronavirus pandemic, advertisers began to pull ad dollars to avoid problematic ad adjacencies to text including death tolls and rising infections. Cannabis often faces these same concerns due to outdated assumptions that all cannabis content focuses on unsafe, risky content such as drug busts and illegal activities rather than more neutral to positive topics such as health and wellness persist.

In the cases of both, cannabis and coronavirus, it is the context of the articles and page content that should matter most when evaluating ad opportunities. Ad verification partners enable brands to understand context, sentiment, and individual risk through more than just keywords and list functions

“Marketers, more than ever before, are carefully evaluating the content adjacencies that are suitable and effective for their respective brands,” said Tony Marlow, CMO at Integral Ad Science, who co-chaired IAB’s Programmatic Advertising: Cannabis Working Group. “Cannabis advertisers are very similar to the broader trends we see, they are seeking to find the best content destinations for their brand’s goals and doing this effectively is about having access to technology that delivers a deep understanding of page content at scale”.

One of IAB’s key missions is to drive education across the digital marketing ecosystem. This guide takes a topline view to start the conversation around the relationship between automated buying capabilities, legal restriction, and creative and brand safety challenges. IAB includes a step-by-step checklist on how to start the media buying conversation around digital investment and the cannabis category.

Read The Guide Here



Joe Pilla
Director, Data & Automation
at IAB