Why COVID-19’s Digital Ad Markets Are A Boon For The Cannabis Industry

The biggest contributing factor to this opportunity is the impact that shelter-in-place orders have had on both ad supply and consumer behavior.

For cannabis marketers, generating mass awareness is far more difficult than it is for marketers in traditional consumer goods.

Cannabis marketers must navigate scores of disparate regulations that limit where, how, and who they can target with their message. This creates a serious challenge for brands that aim to move the needle on awareness or ad recall.

However, recent shifts in consumer interest and supply and demand dynamics due to shelter-in-place orders have created an environment where cannabis marketers have a unique opportunity to generate brand awareness more efficiently than ever before.

The biggest contributing factor to this opportunity is the impact that shelter-in-place orders have had on both ad supply and consumer behavior. With consumers stuck at home, the amount of time they are spending engaged with digital media has skyrocketed, creating a glut of digital ad supply. The circumstances around the health crisis have also recently shifted consumer interests with users flocking to content about natural and holistic health. This has led to a large number of new users interested in cannabis’ applications in stress relief, anxiety, and sleep.

Stay-at-home and ad supply dynamics

Nearly all digital media is now bought programmatically on a non-guaranteed basis, meaning shifts in supply and demand dynamics can create timely opportunities for markets to buy broad reach at a discount. These opportunities can arise during “tentpole events,” where special events, such as highly-rated sporting matches or awards shows, create an increase in ad supply for a short period of time. Generally, advertiser demand rises to meet supply around these events. It means those efficiencies can be difficult to capture.

However, recent shelter-in-place dynamics have created a supply increase similar to those seen during tentpole events, but without the rise in advertiser demand to meet it. This is because marketers in other industries are slashing budgets as quarantine orders drag on. The supply increase is also far more prolonged than those seen during “normal” tentpole events.

Video supply alone has seen a huge increase in avails since the first shelter-in-place orders were issued at the end of February. Industry data points to conventional televisions (CTV) supply experiencing a 124 percent increase, web supply increasing by 18 percent, and in-app supply up by 4 percent.

Published: June 16, 2020

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