It’s high time programmatic became available to the budding cannabis industry, which is projected to hit $8 billion by 2020, but regulatory hurdles have kept it from lighting up.
Instead of examining the legal ramifications around cannabis marketing, many advertising platforms simply fall back on a blanket ban, said Paris Holley, chief technology officer of ad network Mantis. Meanwhile, exchanges are mostly worried about brand safety.
Mantis, which originated from the publication Medical Jane, aggregates inventory from 350 to 400 publishers, most of which focus on the cannabis industry. It’s the closest thing to programmatic in the cannabis industry, but it hasn’t been able to get its inventory on mainstream exchanges due to the risks associated with marketing the still federally illegal drug.
“We’ve reached out to just about every programmatic player and haven’t had much luck in establishing a relationship,” Holley said. “Some vendors have been open to it, but they don’t have enough demand for us to justify any kind of server-to-server integration.”
The same goes for placing ads on big ad platforms like Facebook and Google, which don’t want to deal with federal regulation headaches even though 28 states have legalized cannabis. Google’s AdWords bans websites with content or keywords related to marijuana. LinkedIn, Facebook and other networks have similar restrictions.
“The risk for them taking it on when they’re making so much money isn’t worth it,” said Frank Lane, CEO of Cannabis Financial Network (CFN), a marijuana content production company and publisher.
“Until the industry can show to the mainstream advertising world that it’s spending real dollars, I don’t think we’re going to see any support for [cannabis] any time soon,” agreed Mantis’ Holley.
Mantis is trying to install best practices, since Holley knows one bad apple can ruin the whole barrel. The network bans ads that target children, make unproven health claims or show explicit images.
Still, expansion is difficult. This year, Mantis hopes to make inroads with demand-side platforms as a data provider.
“If we can provide some data model that shows that people would be interested in these products based on what we know about them and the industry, we can mitigate some of that [hesitation],” Holley said.
Because of regulations, most cannabis marketing needs to be one-to-one, so it’s driven by email, CFN’s Lane said.
“You regress back to older forms of advertising,” he said. “Because you can’t use mainstream platforms, you have to travel to expositions, meet the people in the industry, get their contact information and put them in your database – things you did 15 to 20 years ago.”
Mantis is innovating as much as it can in a restricted environment. The network launched a header bidding product in beta last year and is in talks with large website networks to onboard billions of impressions.
But targeting opportunities on Mantis remain limited. The network offers device and location information, but leaves it up to advertisers to comply with local laws and restrictions.
While the big platforms and exchanges have shown no support for cannabis that would scale ad spend significantly, mainstream publishers are warming up to putting their inventory on Mantis’ exchange as monetization continues to lag.
“Over the year, there’s been a trend in publications willing to support this kind of advertising,” Holley said. “As long as we’re able to fill that slot better than other demand can, they really don’t have much of an objection.”
Agencies are inhaling the cannabis opportunity too: Demand from both creative and media agencies for Mantis’ inventory grew significantly in 2016, Holley said.
“They’re seeing these companies that have raised $100 million and they’re saying, ‘We can manage your digital presence online,’” he said.
This post was syndicated from Ad Exchanger.