Cannabis CTV Advertising: The Future of Advertising for Cannabis Businesses

Did you know that internet-connected TVs in the U.S. reached an all-time high in 2023? Read on for everything you need to know about Cannabis CTV Advertising so your businesses won’t get left behind.

Currently, 88% of U.S. households have at least one internet-connected TV device. (Statista) Of those households, 39% of adults watch videos via a connected TV (CTV) device daily, and 60% watch at least weekly. With our interaction with television changing and becoming more internet-driven, cannabis marketers will also have to adapt and expand their media mix.

With cannabis audiences proliferating, the question isn’t, “Should my business engage in CTV,” but “How to get my business started in CTV?” 

What is connected TV (CTV)? 

Connected TV is any TV that connects to the internet either with a built-in connection or through a device.  

Examples of connected TV: 

  • Smart TV
  • Streaming devices: Roku, Fire Stick, Chromecast, Apple TV
  • Gaming consoles: Playstation, Xbox 

Difference between CTV and OTT

Over-the-top (OTT) and CTV are sometimes used interchangeably in programmatic advertising, but there is a difference. CTV is any device connected to the internet and allows you to view videos on a TV. 

OTT is the video content available via streaming services on the internet. OTT gives you access to premium TV content that goes “over-the-top” of your cable. OTT is split into three different revenue models:

  • SVOD (subscription-based services): Netflix, Prime Video, Hulu, HBO Max, and Disney+
  • AVOD (free and ad-supported services): Crackle, YouTube, Peacock, Paramount Plus
  • TVOD (transactional services): iTunes, Google Play, Vimeo On Demand.

These can all be viewed on CTV as well as other devices such as smartphones. 

CTV will be a gold mine for cannabis marketers

Traditional TV use has been dwindling, with an estimated 55.1 million people (or 20.8% of the adult population in the U.S.) cutting the cord and canceling their satellite subscriptions. However, for those that are not cutting the cord, they are still subscribing to streaming services. Seventy-eight percent subscribe to Netflix, Amazon Prime, or Hulu in U.S. households, and 55% subscribe to more than one. 

About 73% of CTV viewers will watch free ad-supported content instead of paying for ad-free content. 

A Miner and Co. Studio survey showed that while using cannabis, 75% of respondents watch more TV and are more likely to binge-watch shows (79%). They are also more likely to let commercials play (77%) while consuming cannabis products. 

CTV advertising and its benefits 

Connected TV is seen as the up-and-coming channel for cannabis programmatic video advertising and display ads. Ads are served while streaming in real-time, so you can precisely target viewers based on demographics, context, location, etc., allowing you to reach current and potential customers in their homes in a compliant manner.  

Types of connected TV ads: 

  • Home screen placement – display ads on the home screen that can be a static image, animated image, or video 
  • In-stream video ads – 15-30 second ads that are unskippable that play before the show or during run time
  • Interactive pre-roll ads – interactive ads that can be directed back to a website 

Benefits of CTV ads for cannabis marketers 

Connected programmatic advertising will provide a new channel for cannabis advertisers looking to grow their audience and have a headstart in the market. 

  1. Targeting: Your ad dollars can go toward targeted cannabis-interested, age-compliant audiences.  CTV allows for precise targeting based on viewer demographics, interests, and behaviors. This means cannabis marketers can reach a more relevant audience, ensuring better ROI.
  2. High Engagement: CTV viewers are typically more engaged than traditional TV viewers, as they’re often watching content of their choice. This can lead to higher ad recall and conversion rates.
  3. Viewability: ads are delivered full-screen, so there are no other distractions and eliminates ‘below the fold’ ads that other media allows
  4. Integration with Digital Campaigns: CTV ads can be integrated with other digital marketing campaigns, allowing for a cohesive and unified marketing strategy across platforms.
  5. Ad completion: average completion rate of ads at 98% 
  6. Measurable results: video completion rate and impressions by date or day of the week, conversions.
  7. Connecting with right fit audiences: Gen Z and millennial audiences are more likely to use CTV vs. linear TV. 
  8. Budget: while CTV ads have high CPMs, the allowance of being able to reach your target audience compliantly versus a broad spray and pray approach on linear TV can result in a higher ROI.

Running compliant video ads for cannabis 

In the next few years, connected TV will likely be an effective and worthwhile platform for cannabis marketers; just as with alcohol and tobacco, there will be rules and regulations to be aware of: 

With regulations varying by state, the same broad guidelines now exist for CTV as for video, display, and mobile ads:

  • No false or misleading statements 
  • No consumption of cannabis products 
  • No promotion of consumption of products 
  • Can’t depict people under the age of 21
  • No elements that would appeal to a younger audience (e.g., toys, cartoons, etc.)
  • No suggestions for health or medical benefits 
  • No pricing or promotional offers
  • Depending on the state, disclaimers may be required

Cannabis brands should consider CTV video and display ads for brand awareness and to be top of mind for those that have already purchased from the brand. 

Connected TV is thriving, and while it has some challenges, like any other marketing channel, it is a profitable way to gain new customers and stay engaged with your target audience. 

While your business prepares for CTV video placements, there are many ways to get started in programmatic advertising. Contact us to get your cannabis business growing in the display ad space. 

Digital Marketing   |  June 30, 2022   |   By MediaJel