Alternative Weeklies Corner New Ad Category in Several States

By Sarah Billingsley, AWN Communications Director

The patchouli lingered in my office as I marveled at the large wad of large denomination bills sitting on my desk. The clients had just left and we had sold a full-page ad and received a promise for twelve more.  Prepaid and open rate… too good to be true, right?

This recollection sums up how medical marijuana ads were first accepted at Sacramento News & Review a few years ago… just like little miracles. When I was the Advertising Director at SN&R, we received a few large ads from pot dispensaries, and we (not proud to admit it) acted like we were doing them a solid by accepting their ads. We made Medical Marijuana advertisers pay top dollar for the privilege of advertising in SN&R.

Fast-forward to 2010 and it’s a whole different ball game. The laws haven’t changed, marijuana for medical use has been legal in the State of California since 1996 when Prop 215, or the Compassionate Use Act was passed, yet something has changed. SN&R’s pot ads now dominate the publication, and the revenue benefits are undeniable. According a recent news report, “Jeff von Kaenel, president and CEO of the News & Review, said about 15 percent of the Sacramento publication’s ads are for medicinal marijuana.”

Similarly, we noticed a substantial amount of Medical Marijuana (MMJ) advertising in the State of Colorado, in Denver’s alt weekly Westword and particularly in AWN member paper, Colorado Springs Independent. Though we have not reported the percentage of MMJ ad biz for CS Indy, if you thumb through the publication’s pages, you’ll find roughly a dozen pages of ads in this category.

Medical Marijuana has been legalized in 14 states and DC, and other states are considering approving similar measures.   Medical Marijuana continues to grow in alternative weeklies too as a dominant local sales category. So, with that in mind, we turned to two AWN members to learn more about how they’ve developed the category and share that dialogue here. Answers to our questions came from Jeff Lang, Director of Advertising Sales and Marketing at Sacramento News & Review, and Fran Zankowski, CEO/General Manager at Colorado Springs Independent.

AWN- When I was at SN&R, we had a handful of random Medical Marijuana ads, and those advertisers came to us unsolicited. But, it doesn’t seem like you could “grow” MM category by waiting for the advertisers to walk through the door. What happened over the past two years that has broken this relatively new sales category wide open?

SNR: It was a concerted effort. We recognized the proclivity of those advertisers to make a commitment to a media outlet and we knew that if we didn’t go for it, someone would. We made sure those collectives or dispensaries advertising with us received excellent results, and that SN&R would be effective for them. At first, we tried to limit them to larger ad units but we realized we were pricing our advertisers out of the paper. So we opened all sizes and frequencies to the advertisers in the category. We discovered were helping them build their businesses, and before we knew it, they were booking larger ads. We stopped making it difficult for them to advertise and once they realized a mutual business partnership, they steadily came to us.

CSIndy: Ten years ago the citizens of Colorado approved an amendment to the state constitution allowing Medical Marijuana (MMJ). Last year the Obama administration made it clear they would not actively pursue investigations in states where MMJ was legal. In August of 2009 dispensaries really started to take off in Colorado Springs. At first we were treating them as regular classified advertisers, which in our case, meant at very low price levels. By end of October we realized there was more we could be doing, so we followed Westword’s lead, and made a back of the book section dedicated to MMJ dispensaries, caregivers and doctors. We changed our pricing to regular display rates. Since then we average 10 or more pages per week of MMJ.

Most importantly we present MMJ as a real medical need. We don’t refer to “pot,” “420,” “reefer,” “ganja,” or any common names that might infer recreational use (although our advertisers might do so). With many soldiers returning to Fort Carson with serious pain from amputations, bomb blasts, and other war wounds, along with terminal patients and others needing relief, we see a real need to offer our readers information on a safe, reliable non-addictive pain medication. In this seriously conservative town, that resonates with our community.

AWN- How has the fact that Alt Weeklies write about Medical Marijuana helped with ad sales?

CSIndy: Again we don’t write about recreational use, we cover Medical Marijuana caregivers and dispensaries, the laws and ballot measures that impact that industry. It has become an entrepreneurial business with cities and counties attempting to find the right degree of regulation and taxation. We have a half-page column each issue called “CannaBiz” that reports on MMJ news in our area. On our blog we offer more news from around Colorado and the region that is of interest to our readers.

SNR: At first, the Editors at News & Review did lend periodic editorial support, like writing about the benefits of Medical Marijuana which we appreciated. We’ve just published our 40-page, glossy-cover Capital Cannabis Guide where we were able to place even more editorial focus.

AWN- Do you sign the MM advertisers on frequency contracts? Are they required to pre-pay? Do you accept credit? Do you negotiate rate with them? Do you require business licenses?

SNR: We require business licenses for medical marijuana advertisers. They all pre-pay via cash or credit card and nearly every advertiser is on a frequency commitment. We offered special packages for frequency and they responded positively.

CSIndy: We sign frequency contracts, most are 52x with color. These clients also get discounts in our quarterly “ReLeaf” publication.

AWN- Have you received any negative feedback from other advertisers (like they do with adult ads)?

SNR: We have experienced categorical push-back, but mostly from other advertisers. The objections are not due to the content of the advertising, rather, some advertisers are beginning to feel lost in the new environment, amid the numerous MMedical ads.

CSIndy: We’ve lost one full page 4color advertiser, and insurance company who did not want to be in the paper because of MMJ. Otherwise, no, there hasn’t been any serious complaints from advertisers and prospects.

AWN-How have you dealt with any negative backlash?

CSIndy: None really, just jokes about the category of business. In fact, much less negativity than we ever got from Adult Services advertising.

SNR: Frankly, we’ll take this revenue increase any day, even if it means we lose a few advertisers. That’s not to say I would drop a client like an old toy, loyalty is extremely important to us, but the truth is that even if only 20% of our readers pick up the News & Review for the advertising, that’s still 75,000 readers that see ads in our paper. If MM ads are increasing the number of eyes on the ads, then all the advertisers in the paper benefit.

AWN- How are Medical Marijuana clients different from other, more traditional, advertisers?

CSIndy: For one, they are less likely to use any other media for advertising. Broadcast is out of the question because of the FCC guidelines and licensing requirements, daily papers just were too slow on the draw to respond to the new category of business, and local community neighborhood papers don’t seem to be going after the business. So we have loyal, regular customers whose biggest problem is getting us new ad copy by deadline. In fact, we feel, but don’t know for sure, that this category of customers may be the hardest to get through the production cycle each week. With communication challenges amongst the many partners each dispensary tends to have, to just being new business owners, we’ve had to lead the way training our clients what to do from finding a bank that will accept their deposits, to insurance and security needs. BTW, this has lead us to offer another section in the paper, adjacent to this MMJ section for MMJ-related services (lawyers, banks, insurance, security, grow supplies, etc.)

Another one of the surprising developments has been the growth of edibles, tonics and tinctures. Rather than the traditional forms of imbibing, seems many folks have an aversion to smoke and request their medication by less irritating means. The city is requiring these dispensaries, and/or their vendors, to have commercial kitchen licenses.

SNR: MM Collectives are incredibly loyal. We treat them like respectable businesses (because they are) and they are completely loyal to us in return.

AWN- In November, California will vote and can make the use of marijuana legal and easily taxable, and certainly contribute toward the State’s tremendous budget shortfall. In Colorado, Governor Bill Ritter is also proposing to use $9 million in medical marijuana fees to help make up budget shortfalls. In California, what happens if the law changes, or in Colorado will there be any changes that will effect advertisers?

SNR: Honestly, we’re not worried either way. Of course there are unanswered questions (like how it will be distributed) but even if the law passes, things won’t change immediately. Many people will go ahead and grow their own anyway, so maybe we’ll see an uptick in hydroponic and other “grow” supply store advertising.

CSIndy: No such ballot measure to legalize marijuana use is in the foreseeable future for Colorado. However, the state does require hefty fees for licensing (upwards of $15,000), restrictions on who can own and manage dispensaries, be a caregiver, etc., plus both the state and city charge sales tax on all items.

AWN- But, I mean, it’s legal to make your own wine, but I’m sure as hell not going to do that…

SNR: Exactly. So I think our readers will continue to rely on SN&R to let them know where to go to purchase medical marijuana, whether it be with a medical evaluation card or otherwise. And if marijuana is not legalized, and Sacramento decides to limit the number of collectives in the city, we will continue to serve them as we do now – we’ll continue to be the resource either way.

AWN- What advice do you have for Publishers and Ad Directors who are considering accepting (or even soliciting) medical marijuana advertising?

CSIndy: Any of our reps may pursue MMJ. That’s how we handle any category of business and we haven’t had to change our policy for MMJ either. However, all MMJ customers must pre-pay by check, money order or credit card. We don’t accept cash as a general rule for any ads….

SNR: Number one – understand what works for the client. Our top MM sales rep, Josh Burke, has learned what works. He helped organize the medical evaluation doctors together into collectives. Josh learned through trial and error what works with ads in this category. News & Review gets results for these clients, and that’s the bottom line.

Also, consider increasing your promotional budget. We put our name on everything in Sacramento because we want to make sure that we’re not only associated with medical marijuana. We want to be a part of everything going on in the market so we have strategically increased our presence with promotions and events. Consequently, we have also seen a considerable increase in revenue from promos and events. We want to be out there, everywhere, all the time.

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…OK, so pot ads may not work for everyone – especially if medical marijuana is not legal in your state. Every market is different, and you all know what your local community can produce (no pun intended) but, if MM is legal in your state, you may be sitting on a goldmine. And don’t forget – AWN members can sell non-local advertising through AWN!

Thanks to Jeff Lang and Fran Zankowski. Many of the above comments may work for other new categories (not just medical marijuana), so we appreciate the 411 on this subject. Now if someone would just explain what 420 means…

Medical Marijuana is legal in the following states:

Alaska
California
Colorado
DC
Hawaii
Maine
Michigan
Montana
Nevada
New Jersey
New Mexico
Oregon
Rhode Island
Vermont
Washington

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