Limited by other platforms, weed marketers are flocking to podcast advertising

Brands like Cresco, Aplós, and Caliper say the space offers fewer restrictions than other digital channels.
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Francis Scialabba

7 min read

Two industries have (probably) been called the “Wild West” more than any southwestern town in the past year or two: cannabis marketing and podcast advertising.

As Olivia Rodrigo put it, it’s brutal out there—as more and more states legalize weed, marketers struggle to keep up with the ever-changing laws (and advertising regulations) for that sweet sweet Kush the product in question.

Combine that with the hyperspeed growth of the US podcast-advertising industry, which Insider Intelligence expects to grow by 38.7% YoY in 2021, and you either get a huge mess or strike gold. Ultimately, marketers across the CBD, hemp, and cannabis spaces are betting on the latter scenario—and some are seeing it pay off.

As we recently wrote, CBD and cannabis brands don’t have an easy time advertising on major platforms like Facebook and Google since weed is still federally illegal and mostly violates their advertising policies.

These restrictions are partly why cannabis brands are interested in podcast advertising. Connor Skelly, former marketing director at cannabis market research firm Brightfield Group, told Marketing Brew that podcast advertising has fewer restrictions than other popular digital marketing channels, like search or social.

He expects that podcasting will likely become a primary channel for this sector. “Podcasting just opens up more nuance. With something like Instagram, it’s overall just antiquated ad policies and terms of service. Same with Google,” Skelly said.

In one corner: CBD and hemp folks

While CBD and hemp aren't technically what is thought of as cannabis, they often get caught up in its web of restrictions, even though hemp (and some forms of CBD) are federally legal. But brands in these spaces have found that podcast advertising works, as long as they’re aware of what they can and can’t do.

According to Lisa Buffo, founder and CEO of the Cannabis Marketing Association, hemp-derived CBD brands can advertise on podcasts that stream to Apple and Spotify, but they need to follow regulations set out by the FTC and FDA.

“CBD companies should not be making health claims, and their advertising statements must not be deceptive or unsubstantiated. There is a lot of gray area, so companies should be careful and consult with counsel before launching campaigns,” she said.

Caliper, a brand that sells CBD powder, has started investing in podcast ads and is seeing gains. At least that’s what its VP of marketing, Missy Bradley, told us. “Being a CBD business, the marketing strategy is trying to figure out where we can spend money on the platforms that will allow us,” Bradley said, explaining that Caliper has encountered a lot of difficulty advertising on other channels, like television, social, and search.

But that hasn’t been the case with podcasting. “Podcasts were initially a trial for us, then we realized that we could scale. We haven’t found that in any other media outlet,” Bradley said, adding that podcast advertising now takes up the lion’s share of Caliper’s performance marketing budget, although she declined to provide exact figures. That’s a big deal for the brand, as 70% of Caliper’s yearly advertising budget goes towards performance marketing.

Ad Results Media (ARM), a podcast ad agency that Caliper works with, pitches the brand to podcast hosts—such as Alaina Urquhart and Ash Kelley, the pair behind true-crime podcast Morbid—and sends them products to review. Once a show accepts, ARM has weekly calls with Caliper to discuss how the ads across various podcasts are performing.

“When we’re having these hosts endorse us, people are hearing from a trusted source that has tried this product and they like it for X, Y, or Z reasons,” Bradley shared. She added that they’re always looking for new hosts to send their products to so fresh audiences can hear about the product—rather than the same listeners on the same podcasts over and over again—to prevent drop-off.

Bradley said Caliper briefly experimented with programmatic ads, but hasn’t tested them enough to feel certain that it’s worth the brand’s while. For now, she prefers the authenticity of host-read ads.

Still, Bradley said podcast advertising can present challenges for CBD marketers. For example, although all CBD derived from hemp is federally legal, the FDA says CBD isn’t allowed in food or dietary supplements, Bradley explained.

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“Because of this, many companies and individuals have taken the stance that CBD is not legal, and therefore they will not accept money or programming from CBD companies,” Bradley told us. “As it relates to podcast advertising, some networks do not allow CBD advertising at all—it’s a banned substance, some have restrictions on content, and some hosts do not want to market CBD.”

In terms of the messaging itself, there are ad copy restrictions that brands should be mindful of. “For example, you can’t make any sort of claim that involves CBD being used to cure a medically diagnosable health condition, like anxiety, depression, cancer, or insomnia. It sounds crazy, but many companies will do just that,” she said.

Aplós, a hemp-infused spirit brand that rolled out a little over eight months ago, has only recently started experimenting with marketing channels. But its cofounder and CMO Emily Onkey told us she’s optimistic about podcast advertising for her product.

“We didn’t spend a dime on marketing for the first five months of our business. So we are starting to test into acquisition channels, and podcasts to me [are] right up there at the top. I think it’s such an interesting forum and also, with some of the restrictions on hemp advertising on other platforms, it’s a really nice way to make sure we can diversify our acquisition funnel and not be too reliant on one specific channel,” Onkey said.

And in the other corner: cannabis

Cresco Labs, a publicly traded cannabis company, has a podcast advertising strategy that is just as nuance-filled as you’d expect given the *gestures to everything crazy about cannabis marketing*. Its core strategy hits at the intersection of host-read and programmatic ads.

Matt Pickerel, senior director of performance marketing at Cresco Labs, told us the company has found a way to advertise its cannabis brands legally on podcasts such as Doughboys and The Gratitude Podcast.

Question: How’s it legal? Answer: The company only advertises in states where cannabis—and therefore, marketing cannabis products—is legal. Pickerel said Cresco pays for “pre-roll, mid-roll, and post-roll” podcast ads procured through podcast networks like Kast Media and Headgum.

“We follow the letter of the law in terms of our content in our delivery,” Pickerel said. “So, because we’re dynamically inserting podcast ads, we only serve in the states where we have a footprint and where we have all the licenses that we need,” he continued, adding that Headgum allows the cannabis org to dynamically insert pre-recorded host-read ads in states Cresco wants to advertise in.

To break it down Barney-style for you, that means the host records an ad, then that ad is dynamically inserted only in the states where it’s legal to do so.

“It’s helpful in that it’s in the tone and the voice of the podcast itself,” he said. But here’s where it falls short, in his opinion: Competitors who don’t use pre-recorded host-read ads—opting instead for the host to read a new ad with fresh creative every time—might have the authenticity advantage. “But it comes with the territory,” Pickerel told us, “and it’s better than serving in places where we don’t have a footprint, because then we’re wasting impressions.”

Because podcast measurement is still “in its infancy,” Pickerel said, Cresco tracks success with “some pretty elementary metrics.” Those include number of impressions, completes, discount-code redemptions, and website visits if the podcast mentions Cresco’s URL.

While Cresco hasn’t jumped into the podcast advertising landscape headfirst due to those measurement concerns, Pickerel told us it’s doing more than dipping a toe in, with about 15% of its marketing budget going toward podcasts. “Especially now that we have the ability to dynamically insert our brands into these pods and to specific states, it can be a good tool in the toolbox for us,” he said, adding that the 15% figure “could go up over time.”

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