How to Market a Cannabis Brand
Updated: Aug 18
Building a digital marketing strategy for cannabis businesses can be confusing and frustrating. As opposed to other industries, many avenues of advertisement do not allow cannabis businesses to advertise through them. What makes advertising as a cannabis business even more frustrating are the various laws and regulations that restrict how you can advertise in the places that you are allowed to advertise in.
Fortunately, with problems come solutions - but not all solutions are created equal. If you were to search “cannabis marketing strategies,” you may read articles claiming that advertising techniques such as social media advertising or native advertising are the way to go when it comes to creating your cannabis marketing strategy. Or maybe you’ll find an article claiming that email marketing or search engine marketing is the way to go. You may read four different articles, and all of them could tell you something different. Here at springbig we understand how confusing it can become to execute an effective cannabis marketing strategy so we decided to look at the numbers. What we found might surprise you.
Our findings are simple. While other forms of advertising may prove to be effective and may even lend themselves well to cannabis businesses, none of them were able to match the high ROI or open rates that cannabis text message marketing boasts. Other avenues of advertising focus on marketing to new customers, but studies have shown that retaining a customer is 5 times cheaper than marketing to a new one, which is exactly what text message marketing is best at, increasing your consumer retention rates. But we’ve already seen text message marketing prove its efficacy for cannabis dispensaries, but did you know it can also be a valuable marketing channel for cannabis brands?
What makes text message marketing stand out above other digital-marketing strategies when it comes to marketing as a cannabis brand? Keep reading to find out.
Marketing in the cannabis industry: 4 approaches
Before we discuss text message marketing, we will first take a look at other popular avenues of marketing for cannabis businesses, namely native advertising, social media advertising, and search engine marketing.
Native ads are paid ads that match the look, feel, and function of the platform that they appear on. They are geared towards advertising to consumers who already share an interest in whatever it is you are advertising, in theory making it more likely to produce a lead.
Native ads typically appear on social media or on webpages, but what sets them apart from display ads is that native ads don’t really look like ads at all. Rather, they are integrated into the look and feel of the platform to make it look like an actual part of the platform. This makes this form of advertising non-interruptive for those viewing them.
Native ads tend to boast better click-through rates (CTR) than display ads, at an average of 0.2% according to Outbrain, an industry leader in cannabis native advertising. Even with premium native ads running on mobile, (which is where they tend to be most effective) the average click through rate sits at only 0.38%. Additionally, running a native ad campaign tends to run on the expensive side, with the average cost of running one on a top-tier news publisher sitting at $54,014.29. If you’re running one with a publisher with a DA greater than 80, you’re looking at an average cost of $38,482. Numbers like these make one wonder if it is worth it for a 0.2% average CTR.
Despite these rather weak numbers native ads have been growing in popularity, taking up over 56% of video ad spending in the US. Maybe it’s because they have been shown to increase purchase intent by 18% according to Forbes? But even still, does that make them worth the price tag? Especially for smaller businesses and brands in the cannabis industry, the answer more often than not is no.
Social media marketing
Paid social media ads can be effective and usually take the form of native ads, which we discussed above. While paid social media ads boast the benefit of targeting specific customer segments that may already be interested, advertising cannabis is almost always prohibited by all of the major platforms, with the only possible workaround being CBD ads. All of this makes paid ads on social media an option you won’t see many cannabis businesses utilizing. The following are the respective policies of Facebook, Instagram, Twitter, and LinkedIn for advertising cannabis.
According to Facebook's Terms and Conditions, “Ads must not promote the sale or use of illegal, prescription, or recreational drugs.” They even give the example of recreational marijuana as not being allowed.
According to Instagram’s, “Our policy prohibits any marijuana seller, including dispensaries, from promoting their business by providing contact information like phone numbers, email addresses, street addresses, or by using the “contact us” tab in Instagram Business Accounts.
According to Twitter's advertising policies, “Twitter prohibits the promotion of drugs and drug paraphernalia.” The policy goes on to cite recreational and herbal drugs specifically as being against their advertisement policies.
According to LinkedIn’s advertising policies, “Ads related to illegal, prescription, over-the-counter or recreational drugs are prohibited.”
When it comes to social media marketing, the most realistic way for cannabis businesses to take advantage of it is by sticking to an organic social media marketing plan. That means using social media networks to increase your online presence and interact with your customers and subscribers without paying the social media network. As opposed to paid advertising on social media networks, with organic social media marketing you’ll be able to avoid getting your advertisement rejected or flagged. Unfortunately, building a following on social media that is substantial enough to influence sales is often difficult and takes a good amount of time and effort. Despite this, building an online reputation for your brand is important and can benefit your business greatly in the long run, with 81% of people saying that they are influenced by what their friends share on social media. While organic social media marketing should not be overlooked as it has potential to produce great benefits, it most likely won’t be at the heart of your marketing strategy.
Search engine marketing
Search engine marketing refers to pay-per-click (PPC) advertisements that appear on search engine result pages. We’ve all seen them, but how effective are they and do they really lend themselves well to cannabis businesses? Unfortunately, if you’re looking to market anything involving actual cannabis then you’re pretty much out of luck according to the matters. group who tell us that google and other other search engines have been moving even farther away from being a cannabis-friendly platform. This makes the possible benefits of it irrelevant for most of the cannabis industry.
Here’s what both Google and Bing have to say about marketing cannabis:
According to Google’s advertising policies help page, “Ads for substances that alter mental state for the purpose of recreation or otherwise induce "highs.” they go on to cite marijuana as one of the drugs banned from marketing on their platform.
According to Microsoft’s list of restricted and disallowed content policies page (Microsoft owns Bing), “Drugs and related paraphernalia,” are not allowed to be advertised.
Text message marketing
Luckily, there is a form of marketing that has proven its ability to help grow your cannabis business and that won’t take up your whole marketing budget for the year: Text message marketing. Unlike SEM, social media and native advertising, text message marketing is cannabis friendly and enables you to send out an advertisement campaign without having to worry about it getting flagged or taken down.
Additionally, text message marketing boasts impressive numbers with a 98% open rate, and with 90% of text messages being opened within the first 3 minutes of them being sent. On top of this, these messages are sent to customers who have already shown purchase intent, making them much more likely to be influenced by the ad. What's more is that text message marketing is geared more towards retaining customers which has shown to be 5 times less expensive than recruiting new customers. Sent directly to the customers pocket, text message marketing has become one of the most popular marketing techniques for cannabis businesses. Compare this to native ads and their 0.38% CTR on the high-end of things, and you’ve got a clear winner.
With springbig’s software, messaging your customers has been made extremely time and cost efficient, with the ability to automate the messages that are sent and the ability to target certain demographics. Compare this to organic social media marketing where it may take years to gain a substantial following, and it becomes clear what text message marketing is more effective.
With springbig’s CRM software you can make text message marketing do even more for your business by enabling your customers to become influencers and affiliate marketers via our Budz platform, running a loyalty program, and being able to reach out to customers at crucial moments via springbig’s auto connects.
We’ve already seen how effective text message marketing is for dispensaries. By joining brands by springbig, brands can finally get in on direct-to-consumer advertising and increase brand awareness by gaining access to over 20 million customers who have already shown interest in cannabis products. More specifically, brands can partner with cannabis dispensaries using springbig and market to their customer bases. This direct-to-consumer type of marketing is rarely seen being used by cannabis brands and could be a game changer when it comes to getting ahead as a brand.
Clearly, when it comes to marketing as a cannabis business text message marketing is the way to go. Having proved its superiority over other marketing techniques such as SEM, native advertising, and social media advertising, text message marketing is something no one in the cannabis industry should leave unutilized! Optimized for cannabis companies in allowing them to advertise without worries of being flagged or taken all while boasting impressive stats and ensuring that you are reaching your target audience, text message marketing is truly the most effective cannabis marketing strategy. But what if you could make it even stronger and incorporate it into even more of your marketing efforts? Well, with springbig you can:
Powering-up your text message marketing strategy
Pairing text message marketing with your dispensaries loyalty program is essential to making the most out of both your text message marketing capabilities and your loyalty program. While it may take some effort, building a comprehensive loyalty program could produce impressive results. Some studies have shown that improving retention rates by only 5% can boost profits up to 95%. So how does one build an effective loyalty program? This, paired with the power of text message marketing could reinvent your dispensaries marketing strategy.
While a lot goes into creating a loyalty program that works for your cannabis dispensary, there are a few things that are essential to making sure it thrives…
Tiers: A tiered loyalty program not only rewards your customers based on their investment into your dispensary, but it also adds a competitive element to the process by giving them a goal to shoot for: the next tier.
A referral program: Integrating a referral program into your loyalty program will help you bring more people into your shop and reward your loyal customers for helping you build your client list. A win-win.
Points per dollar: A points per dollar reward system encourages your customers to spend more during their visits in order to get their rewards. For example, you could offer triple points on purchases over $100.
Mobile optimization and automation: Making sure your loyalty program is optimized across all platforms whether it be text, app, or through your website, is crucial to ensure a satisfactory customer experience. Not only that, but communicating with them regularly is also crucial, which is where text messages come in. With springbig, you can automate these messages so you never miss an opportune moment to get in touch with your loyalty customers.
Unique to springbig, Brands by springbig is the cannabis industry’s first digital ad network. Brands by springbig allows cannabis brands to partner with retailers and directly market to customers via text who have already opted-in to receiving texts and that have higher levels of purchasing intent.
On the dispensary side, you’re able to partner with cannabis brands that you may carry in store to allow them to advertise to your customers, customers that have already shown their intent to use cannabis products. This is in essence free advertising for you, seeing as the brand would be paying for the messages being sent out and not the dispensary.
On the brand side, you’re able to partner with dispensaries carrying your products and market to customers enrolled in their loyalty programs. That means you’ll be marketing to customers who have already displayed their desire to purchase cannabis products.
In other articles, we’ve discussed how referral marketing is important to implement into your loyalty program, but it is important to note that a referral program is important in and of itself. Referral programs produce the highest ROI of another other form of marketing, so it would be a major disadvantage to not have one.
With Springbig’s Budz, a customer referral program, you’ll be able to easily implement referral marketing into your cannabis dispensary’s marketing strategy. Not only that, but you’ll also be able to turn willing customers into affiliate marketers and social media influencers. With the unique referral links Budz provides, you’ll be able to easily keep track of referrals and track your progress.
With Budz, you’re able to tackle two things at once: you’ll be able to establish an effective referral program at your dispensary while also being able to take advantage of affiliate marketing all through one platform. Want to know more? Click here to read more about Budz!
In this article, we have shown why we believe text message marketing is the most powerful avenue of advertisement for cannabis businesses over other channels such as native and social media advertising. In this we also discussed how to give your text message campaigns even more power with Brands by springbig, springbig’s Budz, and more.
That being said, making sure that you are using a multi-channel approach when it comes to your marketing strategy is key to marking sure your cannabis marketing strategy is as effective as possible.
Not currently using text message marketing in your marketing strategy? Demo with springbig today!