Cannabis CTV Advertising: The Future of Advertising for Cannabis Industry

What is Connected TV (CTV)?

Connected TV refers to any television that connects to the internet, either through a built-in connection or an external device.

Examples of connected TV include:

• Smart TV

• Streaming devices: Roku, Fire Stick, Chromecast, Apple TV

• Gaming consoles: Playstation, Xbox

Difference between CTV and OTT

Connected TV (CTV) and Over-the-Top (OTT) are often used interchangeably in programmatic advertising, but there are differences. CTV encompasses devices connected to the internet that allow you to watch videos on your TV.

OTT, on the other hand, refers to video content available via streaming services on the internet, granting access to premium TV content that bypasses traditional cable. OTT is divided into three revenue models:

• SVOD (subscription-based services): Netflix, Prime Video, Hulu, HBO Max, and Disney+

• AVOD (free and ad-supported services): Crackle, YouTube, Peacock, Paramount Plus

• TVOD (transactional services): iTunes, Google Play, Vimeo On Demand

• All these services can be accessed through CTV, as well as other devices like smartphones.

CTV’s Potential for Cannabis Marketers

Traditional TV viewership has been declining, with around 55.1 million people (20.8% of the U.S. adult population) canceling their satellite subscriptions. However, many are still subscribing to streaming services. Approximately 78% subscribe to Netflix, Amazon Prime, or Hulu, and 55% subscribe to more than one of these services.

About 73% of CTV viewers prefer watching free ad-supported content instead of paying for ad-free options. A survey by Miner and Co. Studio revealed that 75% of respondents who consume cannabis watch more TV and are more likely to binge-watch shows (79%). They are also more likely to watch commercials while using cannabis products.

CTV Advertising and Its Benefits

Connected TV is emerging as a promising channel for cannabis programmatic video advertising and display ads. Ads are delivered in real-time during streaming, allowing precise targeting based on demographics, context, location, and more. This enables reaching current and potential customers in their homes while ensuring compliance.

Types of connected TV ads include:

• Home screen placement: Display ads on the home screen, featuring static images, animated content, or videos

• In-stream video ads: Unskippable 15-30 second ads that play before or during a show

• Interactive pre-roll ads: Interactive ads that can direct viewers to a website

Benefits of CTV Ads for Cannabis Marketers

Connected programmatic advertising offers a new channel for cannabis advertisers aiming to expand their audience and gain a competitive edge in the market. The advantages include:

1. Targeting: CTV allows precise targeting based on viewer demographics, interests, and behaviors, ensuring a more relevant audience and better ROI.

2. High Engagement: CTV viewers are typically more engaged, leading to higher ad recall and conversion rates.

3. Viewability: CTV ads are delivered full-screen, eliminating distractions and ensuring ads are seen.

4. Integration with Digital Campaigns: CTV ads can be integrated with other digital marketing campaigns, providing a unified marketing strategy.

5. Ad Completion: CTV ads have an average completion rate of 98%.

6. Measurable Results: Track video completion rates, impressions by date, and conversions.

7. Connecting with the Right Audiences: Gen Z and millennial audiences are more likely to use CTV over traditional TV.

8. Budget: While CTV ads have high CPMs, they offer compliant targeting, resulting in a higher ROI compared to broad linear TV advertising.

Running Compliant Video Ads for Cannabis

In the coming years, connected TV is likely to become an effective platform for cannabis marketers. Similar to alcohol and tobacco, there will be specific rules and regulations to follow, which may vary by state. Some common guidelines for CTV and other digital ads include:

• No false or misleading statements

• No depiction of cannabis product consumption

• No promotion of cannabis product consumption

• No depiction of people under the age of 21

• No elements that would appeal to a younger audience (e.g., toys, cartoons, etc.)

• No suggestions for health or medical benefits

• No pricing or promotional offers

• Depending on the state, disclaimers may be required

Cannabis brands should consider CTV video and display ads for brand awareness and to stay top of mind for those who have already purchased from the brand.

Connected TV is thriving, and while it has some challenges, like any other marketing channel, it is a profitable way to gain new customers and stay engaged with your target audience.

While your business prepares for CTV video placements, there are many ways to get started in programmatic advertising. Contact us to get your cannabis business growing in the display ad space.