The Pros And Cons Of Paid Ads for Cannabis Businesses

Dispensary owners and online cannabis and CBD retailers all understand the importance of advertising, but not all of them understand which parts of advertising are the most important. The Coca Cola Company spends close to three billion dollars on advertising each year, just to stay top of mind for consumers.

Most dispensaries don’t have an advertising budget and rely on free forms of advertising like word of mouth and organic engagement on social media. Organic, free advertising is great, but it’s also the most saturated space and method of reaching your customers. Most dispensaries have an Instagram account or some other form of social media, but not every dispensary is running display ads. If you have the budget to incorporate paid advertising into your cannabis marketing mix, you can reach customers and segments that you could never reach with word of mouth.

Understanding the pros and cons of paid ads can help you to determine if it is the right option for your business.

Benefits of Paid Advertising

Paid advertising is self explanatory, it is advertising you pay for. This can include hiring a cannabis marketing agency or some other digital marketing agency to perform specific services like dispensary geo targeting, display advertising, SMS marketing, cannabis SEO, or PPC.

PPC and display advertising both function by serving an impression to a prospective customer. PPC or pay per click advertising is most commonly associated with Google Ads, but social media platforms like Twitter, Tiktok, Instagram, and Facebook also offer some form of PPC advertising. PPC is great for high dollar value products that you know you can convert customers on.

Display advertising functions by purchasing a flat number of impressions instead of purchasing the clicks. This means it is up to you or a cannabis marketing agency to put together an engaging display ad that convinces potential customers to click. Display advertising isn’t comparable at all to word of mouth or social media advertising, the impressions you buy are a guarantee that your company’s name and products will be seen by a certain number of people. It’s essentially a billboard that you can track.

Cons of Paid Advertising

Unfortunately for dispensaries and CBD companies, there are unique restrictions to cannabis and hemp that aren’t present in other industries. Instagram and Facebook are among the most restrictive, not allowing advertising of cannabis and only allowing some forms of advertisements for hemp products. PPC advertising is also heavily regulated and restricted by Google, we’ve heard many stories from our clients about how they attempted to run a PPC campaign only for it to be taken down a few days later. We do have a workaround, but it’s the kind of thing we only share with clients and prospects.

The other con of paid advertising is the cost. If you’re used to the free impressions gained from organic posting, any advertising expense will feel prohibitive. The important thing is setting a budget and having realistic expectations and goals with your advertising. Organic growth is important, but when you’re trying to catch up or beat your competition, you’ll need to invest in your brand and image. The biggest dispensaries and ecommerce companies found success after investing in marketing with a cannabis marketing agency or working diligently with their internal team.

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