The assent given by President Trump to the 2018 Farm Bill has thrown the U.S. marketing landscape into a frenzy and why not so? CBD is projected to rake in a staggering $23 billion by 2025. This, however, is fraught with some bottlenecks especially as it regards social media advertising.
Vote Hemp’s report, that the total of 23,343 acres of hemp farmed across the nation in 2017, more than doubled in 2018, to 77,000 acres from over 3,500 participants is an indisputable sign that the CBD market is in for a big boom in years to come. This is in addition to the observation by the Federation of American Scientists who reported that the number of imported hemp from Canada and China is on the decrease, it was $67.3 million in 2017 compared to $78.1 million in 2015.
Farmers are buoyed to invest more in hemp as a result of provisions in the Farm Bill that guaranteed them crop insurance, interstate transportation of their products, and basic banking facilities which are very vital but were only available to the typical and traditional farmers. There are high expectations of exceptional and bumper harvests and higher investments by brands in the CBD market.
The foreseeable problems, however, will arise in marketing CBD products across the length and breadth of the U.S. This bottleneck does not arise from the Farm Bill but rather from big players in social media advertising. The reality on the ground is that with the present levels of competition and lower conversion rates, brands are doing all that is required to achieve a good return on advertising spend.
The two dominant online advertising platforms Google and Facebook or Instagram (owned by Facebook) which account for 57 percent of the U.S. digital ad market, have explicitly banned CBD and marijuana promotions. This will impact the CBD market negatively as the Statista reports that the number of worldwide social media users reached 2.34 billion and is expected to grow to some 2.95 billion by 2020. It’s not a hidden fact that virtually all emerging brands depend heavily on Google’s search ads and Facebook’s precision targeting to effectively get their message across to their potential consumers.
At the end of 2018, Facebook had 2.32 billion monthly active users and with Facebook and Zuckerberg wanting to ensure that both Messenger and WhatsApp will remain the main ways of private communication as Mark Zuckerberg wrote in a long note on his Facebook Page titled “A Privacy-Focused Vision for Social Networking,” social media advertising will definitely prove an uphill task for CBD companies.
Marketing has become data-based and consumer-centric and incidentally, Facebook and Google have the data. Without an ample and in-depth knowledge of the customer, CBD brands will not be able to send personalized messages which is what today’s customer wants.
It will be difficult to decipher how, where, and when they want your products delivered since it’s not by intuition. Data analytics comes into play on actually understanding the customer life cycle and based on this, Facebook discovered that there are 13.3% more interactions on weekends from customers compared to weekdays.
People are also becoming very reluctant on sharing public messages with all their networks. Private communication is replacing that and it’s taking place between a small number of people and Facebook is working around the clock to avail customers of what they want.
According to Zuckerberg, their goal is to “build a platform that focuses on all of the ways people want to interact privately.”
Even where you have other channels of sending messages, your message may invariably lack context and personalization. A one-fixes-all message you may eventually send through some other channels will generate low leads and conversions, typifying an abysmally low ROI.
The attendant result will be that investors will lose on their investment and that will be a very big blow to the hemp and CBD industries. This is clearly based on the fact that 63% of customers actually expect brands to offer customer service via their social media channels and the 90% that will increase 10-times more by 2020, are using social networking as a means of communicating with a brand or business.
Since hemp has been stigmatized for a long period of time, getting customers to purchase CBD products may prove daunting. Operators in the industry need a platform to embark on very serious social media advertising to launder the image of CBD products.
The advertising must be consistent and targeted in order to appeal to the needs-based ideology of the customers and that is why it’s important that the social media must be incorporated into the CBD project. They will be able to take advantage of the low-cost advertising features offered by social networks to promote CBD products.
It’s very important to note that social media advertising is cheaper than traditional advertising and as the CBD project is just fully kick-starting as a result of the 2018 Farm Bill, the last thing operators need is a cause to spend more on growing an active audience, increase their audience, and grow their businesses. Marketers have understood the need to meet the consumers where they are and that is the reason why the face of marketing is changing very rapidly.
Apart from affording marketers better opportunities to nurture leads, social media advertising is a much more effective means of transforming potential consumers into brand advocates. Where other advertising platforms are incapable, social media allows you to engage and interact with consumers.
Social media marketing gives validity to a brand and the CBD industry will be missing this vital aspect of marketing campaign terribly. A company’s social media presence is an unequivocal way of telling consumers that a brand is active especially when it’s done correctly.
Without social media, it will prove an overwhelming task for a CBD brand to tell consumers convincingly that the brand is a go-go and engrossed on thriving communication with consumers. “So you can’t advertise on Facebook or Google – it’s not the end of the world,” said Wirth. “There are plenty of other media channels that will get you contextually next to relevant weed content.”
We may have to agree with Wirth but at what cost and how effective will that be? The situation is a really dicey one for CBD brands.