Advertising regulations on marijuana can be pretty restrictive and vary from state to state. Just as there are limitations for tobacco ads, there are also limitations how cannabis companies can advertise for their businesses.
For example, California allows medical marijuana to be advertised, but it has to contain a specific notice to consumers. Colorado requires that any television or radio ads can only be aired if they can prove that no more than 30 % of the audience is under 21, which is fairly impossible. Same rule applies to the internet.
Most of today’s big ad spending happens on the search engines on the internet. Google earned roughly $17 billion last quarter from advertising and Facebook makes approximately $1 billion a quarter in ad revenues. However, both of these sources have chosen to not allow marijuana ads.
That means that cannabis businesses must use creative means to reach their clientele. Cannabis specific advertising firms have cropped up in order to help these businesses. Mantis is the largest of these and works with over 250 websites and social media accounts. It serves more than 130 million ad impressions and reaches 12 million unique readers.
Bang Digital Media takes a different approach. It connects cannabis brands to influencers. This new company started in 2014 and is having to turn down advertising checks because they are still building out their platform.
“We sign social influencers,” said Steve Berke, Bang Digital Media chief executive officer. “The must have at least 250,000 followers.” Berke said he reaches 2 million subscribers. “I have people wanting to give me money and we’re not set up to do it.”
A study by McKinsey found that “marketing induced consumer to consumer word of mouth generates more than twice the sales of paid advertising.” Those customers also had a higher retention rate. So if Bang Digital Media can get Vine star Amanda Cerny to recommend your cannabis product, odds are its going to be an affective ad.
Berke has had some experience with success on getting eyeballs on the internet. He’s made several parody videos that have gone viral and as such feels he knows what he’s doing. The company’s Facebook page 4TwentyToday has almost 400,000 likes.
Also, influencer marketing solves the state line problem for many cannabis companies. If say, Cerny posts something on her Instagram recommending a product, she doesn’t have to worry which state she is in.
Since tobacco advertising remains restricted, it is expected that marijuana ads will face the same limitations. If it ever gets federally legalized, expect big dollars to flow to ad spending and these early marketing companies will be ready.