Getting Out of the Weeds: A How-To Guide for Compliant Cannabis Online Advertising

{all right welcome to the MediaJel podcast we're going to be talking about programmatic advertising today we have three gentlemen with us want to introduce yourselves sure uh i'm jake wicke i'm the ceo of media child am ted montanus i'm the director of business development and smart ad server and i'm stan longwood chief digital officer here at england wonderful wonderful well let's start from the top if we forget about you tonight um the chief evangelist here at mini job perfect all right and we're going to talk about programmatic advertising we're just uh having a little bit debate on whether we should call it or what's your thoughts on the subject yeah well um tying that into the subject at hand right cannabis and programmatic advertising yeah and i think you know the industry being cannabis specific is very much geared towards display but we're just having a conversation about this a few minutes ago at the table over here and i personally think with a lot of the consolidation happening saturation that really started in california is now starting to migrate west um there's going to be a large emphasis on brands dealing with that given that brands are really in its core cpg product um i personally think that it's it's not just display anymore it's also video and other forms so and that's kind of what we're talking about uh the words that we use right um we've worked uh i know the three of us working that for a long time there it has its own vernacular and sometimes people use the same word meaning right so we we've kind of tried to use display as the general category like display and putting video and native under that so that we can separate it from like search right so page search and organic so we just everything under display but many people would think of display as just banners right that's display video is not displayed um and we we're already not using the same words in the tech industry and then now we're bringing this to the canvas industry um which is just gonna create further computing right yeah i think that's a fair point and there probably needs to be a little bit more consistent consistency the excuse me across the board just in how people are talking about the idea you know no longer are the days you know where you call somebody and you're dropping off reels and tapes and plugging them in and stuff and it's advertising is comical technology and that television advertising is now bought programmatically we talk about programmatic and then display to mean in this sense it's that it's displayed to you it's visual but it can be everything and for somebody in outside that's confusing and then we always have to take it in advertising like one step further and make it more convenient we you go to shows and you hear you know the same buzzwords and stuff and topics and those always give a rise to a bunch of different companies yeah there's viewability transparency uh and then now we have a lot more regulations and buzzwords and blockchains all around data and data as important but for the cannabis industry that is still in its infancy when it comes to let's say the more advanced display ads of this topic that we can almost just call it instead of paid search or social but it's advanced advertising because for digital yeah yeah because we're including not just video and display and you have in-app mobile web desktop and now we're going to be adding in connected tv and streaming services and there's going to be a lot of overlap too with um esports and gaming and streaming and integrations into that because we're already seeing programmatic as you know engulf the uh i guess advertising's traditional brick and mortar which is digital displays you know you can buy video ad a digital display a mobile ad and they can be rich media and the next is with the streaming we're gonna have in games i would say right um and that's why it's funny you mentioned a sort of display for us at least we have our entire uh h-store network and we actually categorize it as digital animal and programming technically it's difficult so that we don't confuse people even though they people will be blocked programmatically and technically they're both digital display mediums yeah you've got your you've got your display network and that's running mostly video right like is there like still interstitials that happen at all or yeah network we can take static videos too we recommend that people from 15 seconds 30 seconds there's been a ton of studies the last two years or so where video really has a higher conversion rate so yeah that's you know kind of going around but a lot of marketers in the cannabis ecosystem just can't afford to make videos that's the things another thing we're talking about that we found you know we with a lot of transferring killers to work with we actually have um you get your display network but we've got publishers on you know that are hula's not there yet but you know like sony crackle and some of the other you know kind of second tier um ctv channels built-in camera sets um but the brand is known for the most part right because they haven't been aware that they could even get and connected tv video constantly comes up and i think it's one the price point that scares people and then two it's oh well you know i can't run ads on facebook or instagram or whatever you know the social platforms the big platforms that everybody's used to so that means i can't do gender that's just not accurate yeah and then the pricing what's the difference in regular variants versus video it's it's a lot more expensive video ads have a much higher cpm it's a much more active so for words cpm what is cpm because that's not that's common for us we know what that means and many markers here but not everyone yeah right so that's your cost per thousand miles per mil which is not a million um but the question remains the pricing like for your network you've got your display network which is pretty like special inventory so i imagine that tpm is high right yeah i mean it's fairly comparable to most digital out-of-home mediums we're fortunate on that inventory so we can control the pricing 100 profit on that so you know i have flexibility depending on who the partner is what they're trying to communicate and what their dedication is going to be to us long term right um you know for us i'm sure you guys are dealing with this on a daily basis too we want to create long-term partnerships that's not about hey we're just going to you know throw this thing called programmatic attitude instead of digital at home if you guys can try it and then we never want to enroll we want to educate cannabis marketers that this is a tool or a solution that they should be using in fact it's a tool or a solution that they should be using pretty much every day of the year as support for every other marketing mechanism that they've been activating it's the foundation to hit canada's consumers cannabis and tenders what we call a catechurius something similar and having that always-on approach where you can reach a vast audience then ultimately with all of the other things that you have in the market that's how you create that funnel that's going to ultimately let programmatically work for you you're looking for yeah let's define what part of that is yeah yeah and it's kind of and and to your point too and i guess i'll get that with programmatic is that

The Programmatic Marketplace: How Real-Time Bidding Works

in its simplest form it's real-time bidding on uh inventory and location and you know there's it's simple supply and demand but it's automated and it happens much for real time all of us can log on to a website same website and on the market yes yeah so and you know if you ever find yourself at you know a dinner table and you have always that one ant that's oh what did you do and so i published my account speech on one programming is to especially the marketers that you know have done so much in marketing this is still scary and what we've heard from a lot of people um and the easiest way to shout out is yes write this up on one end you know you would buy shares of a company and that company in this case in programmatic is a publisher and you are buying shares of their advertising you're buying ad location and on the other end you have advertisers or a brand that want to buy and have a need for that and there's many ways to do it i mean a little bit different because there's a lot of self-serve but we have seen the rise of the robin hoods of the world but traditionally you would go to you know a brokerage you would go to a bank and they would invest you schwab merrill lynch and you know they'd build your portfolio um and in this case those are advertising agencies and like those financial institutions that i named in programmatic they're named omnicom ipg pool assist wpp those old traditional you know ad houses that have armies of programmatic traders um and you buy shares you can day trade but in programmatic you're buying a an impression so you're buying that ad space and it can be anything from video display digital out of home advanced tv audio all of that now and you're buying it and you're in a competition and it goes to the highest bidder now there's some variations in the second item yes yeah that's yeah let's keep it above yeah let's go to the and that happens within a millisecond so that added call goes out brand bids on it and what they're bidding on is a cpm and they're that's basically what they feel comfortable in paying for this spot now there's a floor price and that's the lowest that that publisher will take and then you can use the buy it now right yes that is the buy it now yeah if nobody else wants it there's a lot of people that will buy them uh and where our business gets complicated where the buzzwords come in where are the congressional hearings and the and all of this nonsense that have scared people away from you know real digital programmatic um is what happens in between them and how we value that impression and that is all data driven because you inventory might cost a dollar but the person that's logging on that you know previewed is your ideal customer so you might be willing to pay 20 dollars for them they've got something like in their cart that they just haven't checked out yes that customer's worth so much more than the other billion impressions that are in the same hour yeah so basically advertising now is a large-scale marketplace and in the cannabis industry talking about data i think one of the things to point out we're talking about price earlier it's video and how that scares away a lot of cannabis marketers is hey you're buying a very hyper targeted audience and until that audience is the massive audience in this country it's going to be expensive to buy that audience so you're that that's what you're paying for you can either go out and you cannot buy that cannabis audience blanket target people that are 21 plus your out fundamental regulations sure you may hit your consumer and you'll probably drive some sales but what you really want to do is target that cannabis consumer that you know is in a dispensary that you know made a purchase that you know checked out a website that aligns with your brand's lifestyle and that's the audience that you should be buying that's what you're paying for and that's why it's gonna cost twenty dollars if it's video or eight or nine dollars if it's a display and although let's categorize display as a actually this is i was gonna wait on this because you were talking about price and you're asking a question how much is it and the scale can be whatever you could spend 100 spend a million dollars um and i think what many people get hung up with when you start talking about video arch media is there is a differential in the price right video could be 20 it could be if you're on connected tv like linear you know digital that's something that could be like 40. right um but it's priced like that for a reason right and so i think a lot of people get hung up on like cpm pricing versus their budget because you can spend the same amount of money on either thing right is your budget a thousand dollars is it ten thousand dollars that's fine you know if you're doing something that's a 10 year versus 20 you'll have half the impressions but the value is usually priced and the market does like we don't control the price so market does that and so yeah uh connected tv video is four times the cost of like very simple display but you have a 96 percent view rate versus being one ad out of twenty one pages and you basically just printed out the ant carol speech understated about the summer because you'll go to one of these big institutions and they'll say yeah we're gonna you know these you'll buy you know bonds or you know put it in your 401k you can either just do that and just have it you know slowly chug along for 40 years um and you get your portfolio as a pie chart and disinvested in that but it's the same thing with your videos so you if you're a million dollar spending online and you could buy into you know a mutual fund that you know is going to return this or you can buy a single more risky stuff that but the stuff that you know that is going to be consistent and drive is much more expensive than maybe taking a gamble on these you know mass scalable shares that you're buying and whether it be penny stocks if you're buying you know really crap inventory um and that goes back to what a lot of them were talking about for about your media mix but i have a question for you too which is

CPMs, Pricing, and What Cannabis Brands Should Spend

there's a big difference i i'm starting to see in cannabis of the you know the top and everybody else and video being expensive video being expensive risks and also if you're a local dispensary you know that's you guys it was just two drivers they're building on this brand they're delivered and they just would want to target this one that they can't do video yet so are is there gonna become a gap between the let's say the top you know five ten percent of cannabis companies and brands that are investing in video where and they're gonna leave everybody bond because their product is already nationwide so then they control the video market well i think that's fair especially in an industry where there are really a handful of players that are actually spending enough to make a difference yeah right and this kind of goes into what cairo was talking about before he was asking about what does it actually cost yeah and at the end of the day we'll take any budget you know we'll give a recommendation our team is excellent about being transparent trying to guide buyers through the process and we tell them that you know a thousand sure you want to spend a thousand dollars it's fine but it's probably not gonna move the needle for you you get a few impressions you get in front of a few people maybe one person two people actually recognize your brand um you know on average we're seeing brands you know enter the digital advertising programmatic market five to ten thousand dollars a month and they're maybe comfortable spending for about three months um and if you can't prove out a return investment in a period of time they get scared yeah and then you have everybody else these few larger brands right it's not really everybody else the mso is a few select brands that aren't owned by an msl that are distributing that are comfortable spending six figures seven figures a year to really drive that outcome that's where they can really afford that type of inventory that's going to drive the needle and especially when you're hyper targeted and build it at least driving up scale for you or it's going to make an impact because in this industry no yeah it has been um it actually is is much less of an issue for us now on you know display programmatic that we're doing um and that's largely thanks to smart last month and i just wanted to get the broad numbers in general and unless we're in like a little tiny market and someone wants to do something hybrid targeted we don't usually have a problem with still being you know getting being able to buy all the impressions that you want yeah um but what was the number you gave me was like in the us yeah about like 40 billion yeah probably uh 40 maybe a little bit more now but

Cannabis Inventory Scale and Publisher Acceptance

40 billion monthly ad options for just the highest of the regular like thc explicitly approved canvas meaning every single impression that would be bought is going to go through a deal dead deal idea connection that is that says this is cannabis and the publisher has been pulled and approved for campus it's pretty unbelievable if you think about that right 40 billion i mean we first met what about two years ago we were talking about that there was nowhere close to that it's just amazing over two years where where the market has come from well a lot of it is is grown because we've been doing this for a while now right and we've proven that um we have good advertisers we understand brand safety you understand the compliance and it's a new revenue source and you know hubs have had a couple of bad decades in terms of revenue right they've been beaten up by this programmatic thing that's happened and so um having a new industry of advertisers you know there's a tremendous but once you improve ourselves they're safely like the dollars and i think the publishers are getting on board quicker quicker yes very much so especially maybe not with tfc because there is going to be a lot that can't do that or you know it just doesn't fit into you know their brand and um on the cbd side and a lot of the other products and there's still going to be a lot that are going to do thc side and as that market develops but they're going to be interested in it and now we're seeing them start to accept it but we're seeing some start to report back on it and produce content because it's becoming interesting to them yeah you know like uh there was an article that just came out in uh digit which is very traditional yeah advertising uh institution yeah and something about you know canvas and the business insiders of the world you know there's amazing there's something this morning i didn't read the article yet i saw it and it was uncovered too yeah cnn has something on the 19th century but it's just about the industry yeah as a whole yeah and speaking of like big activations like cbdmd i mean it don't make people are healthy but if you watched uh the us open this year um in between the broadcast they had a large you know branded video segment with bubba watson and then they had you know book ended creative which is a 30 second one you know 60 second uh ad spot and that was on air on nbc and the streaming service yes i think a really good prime example is major league sports right this is kind of taking a little bit away from digital advertising i don't know what you guys saw um this summer makeover had their fall starting in colorado it was the first time the major sports league had a event meeting a pillar event baseball it's just a great example of tying into something organically maybe not necessarily working directly with the beat but i'm pretty sure they're doing it in colorado right around the stadium basically baseball had to know about it yeah that's a good example in my mind of you know big-time sports and um that's a thing really starting to ease yeah and the content is really important too because you know we we do a lot of contextual targeting it's a

Contextual Targeting and the Cookieless Future

contextual targeting what is contextual targeting let's use the words okay yeah so contextual targeting is when you insert ads or you target media uh on a specific topic so the content whether it's written or visual is you know of a certain category and in our business we usually our benchmark for categorization is given to us by the id and there's two levels and what is that so you know it's a traditional internet and so there aren't categories when we're we're talking about bidding on impressions one of the pieces of data you get as a buyer from publisher is what category console is right so yeah and there's two levels and the level the first level is very rich like you have entertainment lifestyle news sports um categories yeah the majors and then maybe it's some category but that translates to like what they're categorizing yeah that doesn't translate to who the consumer is because entertainment can be celebrity gossip in your real housewives watcher but entertainment can also be your comic book nerd that is real into marvel and dc and they do not buy the same products so now contextual advertising gets ditto and adding in ai britannica or encyclopedia and it's like cbd will make you feel like this that's not where you want your ad to be you want it to be around something that's talking about like if you're adidas and you're selling a soccer food you want to be around champions league content right but that content like the the whole sort of older way manager was like i want to target you know soccer football site but there may be someone in the personal blog that normally writes about you know lasagna but they have something they wrote is about that particular thing that is relevant right and so that's where this targeting comes in like it's uh similar to adwords a little bit right in the sense that you're now talking about like what is the person looking for what is their engagement um and it is more detailed than the particular website or category and yeah this is going to get scary for a second potentially but this is becoming ever more important or increasingly more important excuse me right in a world where the ipfa is going away yeah i think it's the year the id for for advertisers in apple um and then at the end of next year the cookie and google chrome is going away the cookie is basically this little piece of code that follows you around for website the website the website and historically marketers have used to place advertisements knowing that you went to that website where you've been online yeah and with that going away contextual advertising is going to become extremely like what was it bob barker you know i thought the person's already yeah it's the same thing that's how they follow it along but yeah contextual is kind of the next big thing and it's a cookieless solution and personally my opinion on it is that it's you know saying that it's a call to action back to marketers to i don't know be marketers again be creative again and think of where the content is content is it has always been king or in this case context um yeah and nexon yeah then we'll get into the you know how the ai looks but it's a very good example of somebody writes an article not of their normal content yeah what's the process from getting to add um i would say that the important part is the beginning which gets forgotten a lot which is

Campaign Strategy, Creative, and Case Studies

what is your partnering goal and what is your actual the campaign and a lot of people think i'll have to do an ad campaign that means banner and i'm a certain people but if you go back in advertising a campaign is like a whole story like that you're going to tell consumers about your product you need to figure out who they are like you're going to search the ads to but you know advertising there's something called shared value right there needs to be something that you do with the consumer where you're giving them something that they're interested in whether that is a brand identity or education or whatever and then in exchange like what are you trying to tell what is the story um and what is the outcome other than i want people to it it brings that full circle right back right back to video that we were talking about earlier because especially again this world that's the clearest narrative to being able to tell your story yeah and that's one thing that comes up a lot in a lot of the canvas shows that i've been at where you know perception on canvas is important and now when you come with video how are you going to deliver that and it's ever more important of delivering that message individual yeah well let's uh let's take a quick break and we'll continue back and talk a little bit more about that yeah enjoy this message from our sponsors ever cash and cookies all right well continuing on let's talk a little bit about an actual campaign and you know some a case study that we want to look at that's the one industry that's really doing a great job you know okay let's see so you know well i don't have to think about what i can and can't say in terms of names let's sign these names um someone is doing a good job you know executing things i'm just waiting um let's see here we have yeah like i said i'm going to be biased because i have a little skin in this game but uh you know ballistic industries and their suite of brands um retail's a little bit different i think it's just its own beast but uh they had the new jerry varsity event which just launched uh last year and they have 200 grand two drops of string all different messaging all different lifestyle segments obviously uh everybody knows who gary garcia is but they do a really good job they really started with display but um you know they're spending a enough money to be able to make an impact and actually uh be able to start to see some outcomes and garner some data and intelligence about who their one piece is i know when i was looking at their uh end of the year reporting which we just got back i was actually shocked to see some of the data segments that were coming back that's the beauty of programmatic right that you can get all of these insights and continue to refine who your customer is targeting that customer and learn things that you probably didn't open by surprising yeah and when you are talking about data segments are you talking about on the targeting side or just the on the success side of you know who's who's buying and yeah so it's a combination of both right um in terms of actually using that data just in general that's a really difficult hurdle to get over for a lot of people in this industry um you have the obvious you know gdpr california consumer privacy which makes people out of this industry extremely concerned and i think you guys all agree it took what 10 15 years for most major advertisers to get really comfortable with actually using the point of sale data to be able to better target their consumers and to be able to understand what their consumers are making various different profiles of who they are be able to actually execute on that and then there's some brands who you could say were either afraid to use that data or they were sitting on so much of it that they decided to create their own platform cvs right yes yeah but i i know from personal experience is that a symbol which is called a similar company you know of their size didn't do a good job about that because their whole customer care their loyalty program and you had it on your keychain when you would sign up for that it was the teller when you were checking out oh do you want to sign up and that person was just barely entering in a lot of that information so they had all this years and years of fragmented data maybe they had a phone number and an old aol email or something and sorry and it it wasn't complete and now they're realizing like because with everything that we mentioned on the last one that's going away today that we're now building identity graphs and that's my first part of data is using that information so important yeah the first part of data what does that mean

First-Party Data, Privacy, and Identity Graphs

first-party data is data that is directly typically in the form of multi-data you can go and acquire that in many different ways you know mailers someone that's coming in incentivizing them whatever but essentially it's typically a person's name address birthday some kind of personal identifier and you hear the word personal identifier and all of a sudden you probably get freaked out oh wait that person has my name they know where i live they're targeting me in the world of advertising uh we were talking before about california consumer privacy it's mandatory that any platform like ours has to work with an intermediary or bring on certain types of technology to do what's called hashing which is basically anonymizing that information so that we can actually use it and then essentially putting it in a group so that we don't know what that is yeah we always don't just want to target you you're not important to us but you at scale is always important um it's funny with that and that people don't realize god wants to use my data and going back to my aunt carol speech it's i that to say to people it's like oh so when you're in the bar and you hold your phone up and you go i see i told you it was katy perry i see i knew it and that's not how they make money they don't make money off of you not knowing who's singing the song it's the data your phone is paying they have that device they know you know the location following around there building a profile that type of music that you like you know now it's integrated into the different streaming music streaming platforms but yeah they're cool business to you just holding it up and being like you know seeing i told you this was true yeah it's it's the collection of data but you have opted into getting that and that's one of the knocks against facebook maybe all this stuff is that when you sign up for something it's impossible to understand and that's part of what a lot of legislation was that no it has to be easy but what are you doing with it and this is what we're doing and that linkage of what has been so confusing because you said the financial transaction that's a very murky business cannabis is very different because it started with pos data because of regulations that started with that it's it actually was gonna pay it's going to pay off for them the long run bank data when you sign those bank for debit credit card and everything like you don't see that little online that says you know we might use it for you know if you sign up for the loyalty program we might use it for marketing purposes this is something that you know a lot about yes yeah so it's it's murky s and it's on the first part of the day the other thing that happens and you know this is dependent on the brand or the retailer or whatever it is it creates an opportunity to have a one-to-one relationship with the consumer um it's sort of uh upon the brand to decide how they're gonna present uh you know the cookie acceptance or whatever that portion is but if it is done in a clear way you you can explain what it is you're doing with your information and then you have a you have an agreement between the brand consumer that bypasses all these issues around third-party data cookies page because that consumer has said i like your brand i want to hear from you that's amazing by the way oh man yeah yeah maybe it's a mobile advertiser id yeah right so there's a few terms so we'll get into that there's idfa id for advertiser and then there was a aid android android android advertiser yeah um commonly referred to as maids and these are uh it's basically the serial number of your phone um now apple has taken did just like a chainsaw to the whole thing right like we talked about right now we talked about like google and facebook now and yeah as even someone who you know has worked in advertising for a long time a little thing pops up on my iphone and it's like ask not to track or the other thing you like just no pressing on that i mean well now that they got away with it for so long is you hit no and then your app didn't function the way that you wanted it to function so then you went back and you opted in yeah which now they're starting to shine away from which i think is a good thing but as far as running these campaigns what are some examples of places that has to be well now i mean it's a lot i mean we have um you know we can we have access like i think the big numbers like 45 000 hubs but many of those are small maps right so it's more like in the you know five to ten thousand of um you know quality content and you know we're at the point now where the larger media companies are accepting cannabis if you're our company that can display i shouldn't use more display demonstrate that um you understand why then we can now run ads on and as a new brand being able to put your brand just right under rolling stone or variety there's a lot of value to them right for consumers because you're you're getting validation yeah and for cannabis it's a seat at the table now like you in programmatic like we explained it's a competition and you value your customer is and there will still be the proctor gambles and progresses and home depots that come in and we'll have a bid because they pay for a ton of debt like we've said this before we get what you pay for but you still have you still have the same cheap at that table as they do to bid on that media in real time yeah that's true and now that hitting for a brand them understanding like oh okay like well i think we should also clarify too but one thing in cannabis industry and we stepped into this point is that it really has been a platform that allows buyers to actually control that so i think the one thing that marketers especially cannabis marketers should really understand is that they can control their buying sectors they just need to understand what they're getting and they need to work with the platforms that they're choosing to work with effectively right so you may quote them a seven dollar

Buying Strategies and Optimizing Your Media Mix

ecpm which is an estimated cpm or effective score effective that's it whatever you um you know buy that media but you can also be up front with your buyer and say yeah i want to try and hit that but inventory is going up price that inventory is going up i want a good quality audience and i want that data sure go ahead and give it 50 or whatever that price may be don't just go and bid on the 7 or less to try and get that effective cpm inventory because it's crappy inventory it's not where my audience is yeah but you can still have that large pool but you want to keep your content as open as possible if you're going with a data driven strategy because i've seen this a lot more often times like we want to go heavy data this map}