The Cannabis Industry Boom is Kinda Like the Internet Boom of the 90’s…..But not for the reasons you
I know because I was there.
I jumped into the online economy in its early days, dabbling in a few stocks of pioneering public internet companies in my meager portfolio, and my adviser at the time thought I was a 20-something idiot. I invested because I believed in the next phase of not just the budding (and then booming) internet economy. At the time, I was a couple of years into my leap from the world of traditional print media sales to the Wild West of online media sales. I wasn’t just talking the talk, I was walking the walk as the internet was putting food on my plate, money in my bank account & 401K by selling good old banner ads.
My grandmother was greatly disappointed when I took the digital plunge from selling Sunday newspaper coupon free standing inserts or FSI’s. She could no longer proudly brag to her friends that her grandson sold “all of the coupons” they used to save money at the grocery store. The virtues of digital media included: “instant response to your ads” (IE Click-Throughs).... and that was about it at the time (Or maybe all of the cool things AOL did to make our lives easier, but I digress). The click-through cursed the industry, even to this day, as most marketers still look at this metric through a myopic lens. Because success goes way beyond the click, as we’ve come to learn over time.
Success is about effective creative, tied to audience targeting, tied to unique and purposefully utilized data to create a connection with consumers to take a specific action. And it’s not, (repeat) it’s not about the click. It’s about the engagement of the ad. It’s about the recall. It’s about the conversion.
Advertising and Marketing-Tech, while sometimes appearing complicated, has come a long way since the late 90’s. Digital allows marketers a more cost-effective channel compared to traditional media to create advertising efficacy. Furthermore, the proliferation of data and subsequent providers of data, allows marketers to build better connections with consumers through precise targeting and relevant messaging. We can apply data to serve specific creative to consumers based on the weather, their geography or demographics, and in my opinion, the most relevant, a consumer's purchase behavior.
What consumers shop for and purchase is the purest and most deterministic form of intent in the market. Not content, not look-a-likes, not general online or mobile browsing behavior. Shopping data & purchase data. Period.
As the cannabis market continues to grow at a rapid pace, despite the financial, legal, legislative and other logistical challenges that persist, brands are challenged with finding places to reach their consumers. Today, there are limitations or flat out prohibitions that exist on the “go-to” places for consumer advertising - Google, Facebook, Apple, Microsoft & Amazon (The “Big 5”), leaving marketers with a select group of platforms that allow for cannabis brand advertising.
Additionally, all major publishers are sitting on the sidelines, reluctant to open their doors for cannabis brand advertising. Non-endemic brands aiming to reach cannabis consumers with relevant creative messaging are also left with no options. The main reason? There is no bona fide data source expressly tied to adult/21+ cannabis shoppers and buyers. When this type of data is available and utilized properly to reach in-market consumers tied to their purchase behaviors, the game changes.
However, the Pareto Principal will be in full effect. While they may not currently allow for advertising, The Big 5 are all currently and quietly amassing cannabis consumer data. When the timing is right and legalization migrates from state to federal levels in the US and other countries, they all will of course jump into the mix, full throttle. And the data will follow, in the same walled gardens that exist today. Facebook data will reside in FBX. Google data in AdX/Adwords/AdSense, etc. Amazon data in Amazon Advertising & A9, etc.
One call out, as Amazon should be viewed as having the upper hand among the Goliaths given the uniqueness of their valuable first-party shopping data vs the others which are based on “Likes” and “Favorites”. While valuable to a degree, these are lesser forms of true intent compared to actual shopping and buying behaviors attributed to actual consumers.
However, a more democratized data source with staying power, made available to all other media exchanges and marketplaces will continue to serve a valuable purpose in the market. 20% of the ad dollars against what is projected to be a $500B global market in the coming years is nothing to simply pass up once the big guys start playing the game.
So let’s not repeat the same mistakes made back in the 90’s as we revolutionize the digital marketing strategies for the cannabis industry. It’s not about the clicks, it’s about the data, and all of the goodness it can provide.