Nicole Baytala, Director of Strategy and Marketing at Surfside, shared valuable insights on digital marketing strategies for cannabis businesses who are a part of the CMA membership during part five of Cannabis Marketing Association’s 2024 Cannabis Marketing Summit web series, “Ask a Marketer Anything.” CMA hosted this 8-part series to respond to the volume of questions they get from members and to allow members the opportunity to ask questions of the experts, directly. CMA values peer knowledge sharing and believes that these forums can facilitate a healthier and more robust understanding of the work professional cannabis marketers are required to execute.
Nicole Baytala is an experienced professional who has held various roles in the advertising industry. Nicole currently serves as Director of Account Strategy at Surfside, overseeing a team and managing campaign sales. Prior to this, Nicole worked at S4M and SITO Mobile, where Nicole managed client relationships, built media proposals, and supervised advertising campaigns. Nicole holds a Bachelor’s degree in Marketing from Rutgers Business School.
This comprehensive summary highlights key points discussed during the session, offering actionable advice for cannabis marketers navigating the complex digital landscape.
This blog post was crafted in collaboration between Cannabis Marketing Association and the AI tool, Perplexity, using the live transcript from the session. All content was reviewed and fact-checked by a human.
The Current Cannabis Marketing Landscape
Despite regulatory challenges, numerous digital marketing opportunities are available for cannabis businesses. Baytala emphasized that while restrictions exist, they vary on a case-by-case basis, similar to other regulated industries like gambling and alcohol.
What Channels Are Available to Cannabis Marketers?
Cannabis marketers can leverage various digital platforms, including:
- Digital display advertising
- Connected TV
- In-video solutions
- Digital out-of-home advertising
- Traditional out-of-home advertising
How Do Cannabis Marketers Choose the Right Channel?
Baytala stressed the importance of tailoring marketing strategies to each company’s unique needs and target audience. To determine the most effective channels, cannabis marketers should:
- Identify their target audience
- Research where their audience spends time online
- Define clear short-term and long-term objectives
- Work backward from these goals to select appropriate platforms
Audience Targeting
Once the right marketing channels are identified, the next crucial step is to refine the targeting approach. Surfside helps cannabis businesses implement targeted marketing strategies by:
- Analyzing customer demographics and behaviors
- Identifying optimal devices and platforms for reaching specific audiences
- Considering factors such as time of day and day of week for ad placement
Best Practices for Cannabis Advertising
In today’s crowded online advertising space, where users typically view ads for mere seconds, it’s crucial to create content that immediately captures attention. Baytala shared some general guidelines for creating compelling cannabis advertisements:
- Include a clear call-to-action (CTA)
- Drive users to relevant landing pages that match the CTA
- Ensure images are legible and copy is concise
- Avoid being too specific about products or SKUs
- Tailor messaging to specific audience segments (e.g., pre-roll buyers, returning customers)
- Implement A/B testing to optimize performance
How do Cannabis Marketers Implement Ominchannel Marketing Strategies?
In today’s digital landscape, a cohesive and integrated marketing approach is essential for reaching consumers across multiple touchpoints. Surfside assists cannabis businesses in implementing omnichannel marketing strategies by:
- Connecting online and offline marketing activations
- Integrating various platforms (e.g., email, SMS, digital advertising, search)
- Providing attribution across different marketing channels
- Collaborating with partners like Alpine and Spring Big for SMS integration
By adopting these omnichannel strategies, cannabis businesses can create a seamless customer experience and maximize their marketing impact across various platforms.
Optimizing Campaign Performance
Once marketing strategies are in place, continuous optimization is key to achieving and maintaining success in the competitive cannabis market. To maximize the effectiveness of digital marketing campaigns, Baytala recommends:
- Working with partners who measure comprehensive metrics (e.g., online and in-store sales, foot traffic, ad engagement)
- Continuously optimizing based on time of day, day of week, and past purchasing behaviors
- Analyzing the optimal sequence of ad placements across different channels
- Considering broader business objectives beyond just return on ad spend (ROAS)
By following these optimization practices, cannabis marketers can refine their strategies over time, ensuring that their campaigns remain effective and aligned with evolving business goals and market conditions.
How Can Cannabis Marketers Manage Digital Marketing Budgets and Return on Investment (ROI)?
The potential elimination of Section 280E of the Internal Revenue Code could be a game-changer for the cannabis industry. This provision currently prohibits businesses involved in the trafficking of controlled substances from deducting ordinary business expenses, significantly impacting their financial operations and marketing budgets. With the potential removal of 280E tax restrictions, cannabis businesses may have more budget available for marketing efforts. Baytala advises:
- Understanding overall market size and potential reach
- Adjusting ROI expectations based on market conditions and business objectives
- Considering long-term goals such as brand awareness and market share in addition to immediate ROAS
The removal of 280E would not only provide financial relief but could also lead to a surge in marketing investments across the cannabis industry. As businesses gain the ability to allocate more resources to marketing, it’s crucial to approach this newfound flexibility strategically, balancing short-term gains with long-term brand building and market positioning. This shift could potentially level the playing field and foster more innovative and comprehensive marketing strategies in the cannabis sector. For a deeper understanding of these potential changes and their impact, CMA Members can log into the Member Portal and watch our May 2024 War Room Wednesday recording, analyzing the latest Gartner report on marketing trends. This members-only content offers valuable insights to help businesses navigate this evolving landscape and stay ahead of the curve in their marketing efforts.
Impact of Potential Rescheduling
While the potential rescheduling of cannabis may not dramatically change marketing strategies, Baytala highlighted two key impacts:
1. Increased marketing budgets due to the removal of 280E tax restrictions:
The elimination of Section 280E would allow cannabis businesses to deduct ordinary business expenses, including marketing costs, from their taxes. This change could significantly increase the funds available for marketing initiatives. With these additional resources, cannabis companies could:
- Invest in more sophisticated omnichannel marketing strategies, integrating online and offline activations more seamlessly.
- Expand their presence across various platforms, including email, SMS, digital advertising, and search engines.
- Allocate more budget to data analytics and attribution tools, enabling better tracking of marketing performance across channels.
- Increase spending on brand awareness campaigns and long-term marketing initiatives that were previously difficult to justify due to tax restrictions.
- Explore new marketing channels or technologies that were previously cost-prohibitive.
2. More competitive advertising landscape as more companies enter the space:
The rescheduling of cannabis and the removal of 280E could make the industry more attractive to new entrants and investors, leading to a more crowded and competitive market. This shift could impact the advertising landscape in several ways:
- Increased competition for ad space and consumer attention, potentially driving up advertising costs across various channels.
- A need for more innovative and differentiated marketing strategies to stand out in a crowded market.
- Greater emphasis on optimizing campaign performance, including more rigorous testing and refinement of ad placements, timing, and messaging.
- The increased importance of comprehensive metrics and analytics to measure ROI and justify marketing spend in a more competitive environment.
- Potential for more partnerships and collaborations between cannabis companies and mainstream brands or influencers, as the industry becomes more normalized.
- A shift towards more sophisticated branding and positioning strategies to differentiate products in a more saturated market.
In this evolving landscape, cannabis marketers will need to be more strategic in their approach, balancing the opportunities presented by increased budgets with the challenges of a more competitive market. This may involve a greater focus on omnichannel strategies, data-driven optimization, and long-term brand building to maintain a competitive edge.
How can Cannabis Marketers Leverage Holiday Marketing Best Practices?
The cannabis industry experiences significant sales spikes during key holidays such as 4/20, 7/10 (Oil Day), Labor Day, and even the 4th of July. To capitalize on these high-volume sales periods, cannabis marketers must plan and execute their holiday campaigns strategically. For effective holiday marketing campaigns, Baytala recommends:
- Starting promotions 1-2 weeks before the holiday
- Ideally, beginning campaigns two weeks prior to allow for influencing buying decisions
- Working with agile partners who can deploy campaigns quickly (e.g., Surfside can launch within 48 hours)
By implementing these best practices and planning ahead for major cannabis holidays, marketers can maximize their impact during these crucial sales periods. It’s important to remember that while these high-volume days present significant opportunities, maintaining a consistent marketing presence throughout the year is key to long-term success in the competitive cannabis market.
Key Takeaways from the Digital Marketing AMA
Nicole answered over 20 questions from CMA members, and a few key themes emerged from her knowledge. Her insights provided a comprehensive overview of the current state and future potential of digital marketing in the cannabis industry. From navigating regulatory challenges to leveraging emerging opportunities, Nicole’s responses offered valuable guidance for cannabis marketers looking to enhance their digital strategies. Here are the key takeaways from the Digital Marketing AMA:
- Despite restrictions, numerous digital marketing opportunities exist for cannabis businesses.
- Tailoring marketing strategies to your specific audience and objectives is crucial.
- Potential rescheduling may increase marketing budgets and competition.
- Adhering to platform-specific guidelines and best practices is essential for successful cannabis advertising.
- Implementing omnichannel strategies can help connect various marketing efforts and improve attribution.
- Continuous optimization and performance measurement are vital for campaign success.
- Consider broader business objectives beyond immediate ROAS when evaluating marketing effectiveness.
- Planning ahead for holiday marketing campaigns can maximize their impact on consumer buying decisions.
By following these insights and best practices, cannabis marketers can navigate the complex landscape of digital advertising and create effective campaigns that drive results for their businesses in an evolving regulatory environment.
Want to access more AMAs and cannabis marketing content? Join the Cannabis Marketing Association community today!
CMA Members: log into the Member Portal to watch the full recording and register for the entire virtual “Ask a Marketer Anything” Cannabis Marketing Summit mini-series here. All sessions will be recorded and available in the Member Portal.
