Some cannabis marketers look down on digital advertising, preferring the idea of building their brands without having to pay for clicks. Others believe that digital cannabis advertising isn’t even allowed.

Both notions are incorrect. First, brands that use digital advertising will be seen by many more eyeballs than purely organic marketing. Second, many forms of digital cannabis advertising are legally compliant in any state, and in some ways, these ads are actually less restrictive than the traditional advertising methods brands have frequently pursued instead. 

In Washington, for instance, state law mandates that: "no advertisement can be within one thousand feet of the perimeter of a school grounds, playground, recreation center or facility, child care center, public park, library, or a game arcade admission to which it is not restricted to persons aged twenty-one years or older; on or in a public transit vehicle or public transit shelter; or on or in a publicly owned or operated property.” This makes it tough to find a legal billboard placement, but it doesn’t affect your ability to run digital ads.

Much of the confusion over digital advertising in the cannabis space has come from the two largest ad platforms—Facebook and Google. Both categorically reject the vast majority of cannabis and CBD ads, but this is based on their own platform-specific policies (both written and unwritten). Cannabis marketers who give up after failing to receive approval on Google or Facebook ignore the options offered by every other site on the internet—nearly all of which are directly and easily accessible with a method called programmatic advertising.

What is programmatic advertising, and how can cannabis brands use it?

Programmatic advertising refers to the automated buying and selling of online ad space, generally through real-time bidding (RTB). Advertisers and agencies use programmatic platforms to “bid” for specific ad impressions based on a variety of factors—chief among them, the person who will see the ad. At the same time, publishers are auctioning off the ad space on their websites, and an ad exchange plays matchmaker to sell the ad impression to the highest bidder in the time it takes the web page to load.

Though you may not have heard of programmatic advertising before, mainstream industries have. In 2020, programmatic will account for 85 percent of all digital ad spending in the U.S. This is because programmatic is currently the fastest, easiest, and cheapest way to purchase paid media at scale. If you’re planning to run ads on more than one or two websites (and you should be), programmatic lets you automate the process, ensuring that you reach each member of your target audience at the best possible price.

Marketers can run programmatic ads of all kinds, including display, mobile, native, video, connected TV, and digital audio ads. It also allows for the use of a wide variety of ad targeting tactics, including contextual targeting, behavioral targeting, geofencing, and geotargeting. Finally, it leverages robust data sets—from your own company, your strategic partners, or third-party data providers—to build custom audiences and expand your campaigns’ reach. While early digital advertising providers in the cannabis industry primarily offered access to endemic sites like High Times, today’s programmatic cannabis and CBD ads run on mainstream, high-quality websites (think New York Times, ESPN, and USA Today.com).

You don’t need to be a programmatic expert to run programmatic ads—this is why programmatic agencies exist. Cannabis specialist agencies leverage data sets and programmatic ad tech platforms designed specifically for the cannabis industry to run compliant, data-driven ad campaigns. Before you get in touch with an agency, though, it’s helpful to have a basic sense of which channels or tactics make the most sense for your brand.

While successful programmatic campaigns generally leverage a wide variety of both channels and targeting tactics, the following provides a basic overview of top channels to consider based on the type of cannabis brand you’re planning to advertise.

1. Ad retargeting

Best for scaling established brands

Your most likely customers are the people who have already engaged with your brand. Ad retargeting uses data on those past website visitors, purchasers, and contacts to keep your brand top-of-mind and encourage repeat purchases from an existing audience.

Retargeting strategies tend to yield a high return on ad spend (ROAS) for brands of all kinds, but they work best for established brands with a wide pool of site visitors and contacts already available. Note that retargeting is not an ad channel in its own right, but a targeting tactic that should be used across all of the channels.

2. Display and mobile ads

Best for cannabis and CBD startups

Display and mobile ads are the bread and butter of programmatic advertising, providing the greatest top-of-funnel reach at the lowest cost. Thousands of major mainstream sites and apps already accept ads for cannabis or CBD, and more are opening their doors to the industry every day.

Display ads are best for building brand awareness, which is why they’re a great choice for startups. They’re also generally the cheapest digital ad format: Display ad impressions usually cost a fraction of a cent, which tends to work well with a startup budget.

3. Video and connected TV advertising

Best for dispensaries and MSOs

Sight, sound, and motion have always been the most engaging way to reach an audience, and by 2022 digital videos are expected to represent more than 82 percent of all consumer traffic on the internet.

Video is perfect for dispensaries because this format allows you to show your business in action, rather than simply telling your audience to visit. Pandemic or not, this makes for engaging storytelling, but it also lets consumers unsure about visiting a dispensary preview of the potential experience in advance. Dispensaries in Nevada, for instance, often create video showcases of their dispensaries to appeal to out-of-state tourists deciding which to visit while in Vegas. One multi-location cannabis retailer in Seattle used video to ensure their customers were comfortable visiting their stores during COVID-19.

For MSOs and other well-funded cannabusinesses, video advertising offers compelling benefits to go with its generally higher price tag. Very few cannabis marketers currently leverage digital video ads, which sets those brands who do run them apart from their competitors. Additional benefits include 100% share-of-voice during the ad and triple the click-through rate compared to ads with no video.

4. Native ads

Best for cannabis producers and processors

Plant-touching cannabis brands have to work harder than other businesses in the industry to combat the historic stigma associated with cannabis consumption, so these brands gain an additional benefit from running native ads on mainstream websites. Native ads blend into the content surrounding them on each platform where they appear. When a cannabis ad is surrounded by high-quality non-cannabis content, the stigma is also reduced.

Native advertising also excels at combatting ad blindness and driving audience engagement: According to Outbrain, consumers look at native ads 53% more than display ads. For plant-touching brands that can’t make sales online, awareness and engagement are the primary goals, making native advertising a great fit.

5. Digital audio ads

Best for CBD brands

Digital audio is one of the most underused formats in programmatic advertising. Still, it offers an excellent way to stand out from the competition and reach CBD audiences in an engaging way. This format currently offers more inventory for CBD brands than cannabis (though options are slowly expanding for cannabis, too).

Like video, digital audio offers a 100 percent share of voice, and most brands in the industry aren’t using it yet. This channel lets advertisers reach CBD and related audiences with audio spots and companion banner ads on platforms like Spotify, Pandora, and Soundcloud.

6. Search and social ads

Best for hemp brands

Paid search and paid social are their advertising realms, but they offer many of the same programmatic targeting tactics and capabilities through their proprietary platforms (Google Ads and Facebook Ads).

In a perfect world, most digital advertising campaigns (for cannabis, CBD, and mainstream products alike) would leverage a balanced mix of search, social, and programmatic ads—the digital advertising trifecta—to achieve their campaign goals. In the real world, the most likely ads to receive approval on both platforms are for hemp-specific products, such as hemp oil topicals.

A caveat: Though ads for products that contain CBD are often rejected by Facebook, Google, or both, CBD companies should still try for ad approval on both platforms. While there are some restrictions, these platforms are the two largest, and the CBD brands able to gain approval on either should take advantage of that for as long as they can.