Digital Marketing

Marketing Analysis Report: The Growing CBD Market

By Editorial Staff

Cannabidiol, better known as CBD, has become a popular natural remedy due to its calming effects without the mind-altering and euphoric “high” of marijuana. As an appealing option for those looking to get control of their ailments without pharmaceutical medication, the CBD market has grown mainstream and is continuously gaining a positive reputation in the health and wellness industry through topical oils, lotions, gummies, and more.

Since it’s legal, more and more consumers have begun to turn to CBD, and thus, more brands have popped up on the market to put their own spin on CBD through various new products and marketing strategies. However, some marketing methods have proved to be more significantly beneficial than others in terms of marketing goals and results.

What is CBD?

CBD, short for cannabidiol, is the second most prevalent cannabinoid, or chemical compound, from the Cannabis sativa plant, also known as marijuana. It’s an essential component of medical marijuana and is derived directly from the hemp plant, a cousin of marijuana. Unlike pharmaceutical drugs, CBD is a naturally occurring substance that imparts a feeling of relaxation and calm without the psychoactive effects of marijuana due to the lack of THC.

To create products like CBD oil or CBD tinctures, which are two of the most popular forms of CBD offered on the market, CBD oil is extracted from seeds, flowers, and stalks from the hemp plant. Then it is either diluted with a natural carrier oil to make it easier to digest such as coconut or hemp seed oil to result in CBD oil, or all of the organic plant matter is soaked inside of an alcohol-water solution to create CBD tinctures. All other forms of CBD, such as lip balms, lotions, and gummies, are all created through CBD oil infusion.

CBD in Product Form 

CBD comes in an abundance of forms. With how easy it is to infuse CBD in almost any substance or create tinctures in a variety of flavors, consumers can find CBD in practically any form imaginable. To make it even more flexible, CBD products can either be pure CBD, full-spectrum (the oil contains all other cannabinoids that are naturally occurring in the cannabis plant, like THC) or broad-spectrum (contains multiple cannabinoids without THC). Thus, CBD is consistently sought after for its ability to work for anyone in any way they can access it. Today, CBD can be found in the following most popular forms:

  • CBD Tinctures
  • CBD Oils
  • CBD Gummies/Edibles
  • CBD Balms/Gels
  • CBD Lotions/Creams/Ointments/Skincare
  • CBD Pills/Capsules/Soft Gels
  • CBD-Infused Drinks/Mix Packets/Flavor Drops
  • CBD Patches
  • CBD Roll-Ons/Sprays/Sticks
  • CBD Vapes

Looking to run an epic CBD influencer marketing campaign? NeoReach has the best experience in creating viral campaigns that convert on social media. Sign up here!

Playing into Its Popularity: CBD’s Health Benefits 

With more scientific studies confirming its beneficial properties for various ailments and issues, CBD has been praised for its effectiveness in treating both physical and neuropathic pain. Depending on which form a consumer gets their CBD in, CBD can come in a variety of potencies and some edible forms are even encouraged to be taken based on dosage, taking concentration, metabolism, and body weight into account. Most notably, CBD is used by consumers to:

  • Relieve Pain
  • Reduce Anxiety
  • Improve Sleep
  • Relieve Negative Health-Related Symptoms (such as nausea and vomiting)
  • Prevent Acne (reduction of inflammation)
  • Reduce Stress
  • Promote Focus
  • Soothe Sore Muscles and Tension for Exercise Recovery

CBD and Influencer Marketing

CBD has gained a huge market following in recent years because of the medicinal benefits patients have reported experiencing. With the legalization of marijuana in some states around the country, it was only a matter of time before the cannabis industry as a whole experienced unprecedented growth, as just the CBD oil segment of the industry is expected to be worth around $20 billion by 2024 according to market analysts. This is an impressive jump from sales of $1.8 billion in 2022 and $500 million in 2018. Some experts even believe that the CBD consumer market will soon outperform the entire legal cannabis industry.

With the market growing, it has become more important than ever for brands to adopt a proper CBD marketing strategy if they aim to rise as industry leaders and stand apart from their competition. The surge in CBD marketing is hard to ignore, as CBD-focused advertisements are scattered across Facebook, Instagram, Google, and more.

To successfully market their brands, CBD companies are focusing on utilizing influencer marketing to help them differentiate. According to a study conducted by High Yield Insights, approximately 40% of U.S. consumers aged 21 and above claim they would consider trying CBD. To successfully reach out to young adults, brands have pushed their media spend mostly on influencer marketing to successfully persuade these consumers to try CBD through the recommendations of their favorite online creators.

The Challenges with CBD Marketing

Like other industries, CBD brands have faced numerous challenges when it comes to marketing, such as:

  1. Lack of Education: Despite its surge in popularity, consumers can be riddled with confusion from the start when they confuse CBD with THC or assume CBD contains the same psychoactive effects of marijuana. Therefore, some brands have had to learn to utilize education methods in their marketing strategies when targeting non-CBD consumers who might be hesitant towards embracing their CBD products.
  1. Targeting the Right Audience: The legal status of CBD products varies from state to state, making it a bit more difficult for brands to create solid marketing strategies that can apply to consumers from multiple locations at once. Similarly, with all of CBD’s beneficial effects, consumers can come from all backgrounds, ethnicities, and age groups. Also, some brands struggle with their brand identity when it comes to unifying their marketing methods and content to address various audiences that utilize CBD in different ways and for different reasons.

NeoReach’s Work with CBD Brands

 With NeoReach’s focus on full-service influencer marketing, we’ve applied our data-backed strategies, influencer sourcing, and performance reporting methods to various top-tier brand campaigns. More recently, we’ve worked with top CBD brands, like Sunday Scaries, to provide them with instant access to top-performing niche influencers that we hand chose for their campaign. Aiming to work with micro-creators, NeoReach created a roster full of relevant influencers for the Sunday Scaries campaign including Instagram blogger Hannah Peetz.

By launching strategies derived from data, including competitor audits, audience demographics matching, and platform-specific insights, NeoReach matches CBD brands with the perfect influencers for their campaigns. Then, with the right influencers selected, our team manages the entire process including introduction, contract negotiation, deployment, shipping, and payments. To judge the success of the influencer-pushed campaign, NeoReach also analyzes influencer performance, social channels, types of content, and the audiences who performed the best. 

CBD Campaign Findings: Marketing on Social Media

While some CBD brands are noticing mass success, some are burning up against the competition due to misunderstandings of the CBD market and non-beneficial media strategies. Below, two separate fairly new CBD brands will be analyzed for their success in the industry in relation to their marketing strategies.

Ignite

As mentioned, a lack of education is one of the main problems that CBD brands run into when it comes to strategy. Then, marketing to the wrong audience comes into play. Dan Bilzerian’s brand Ignite ran into issues with both. In addition to CBD-infused toothpicks and nicotine vape juice, Ignite also marketed water, vodka, and clothing. From selling vastly different consumer products at once, Ignite confused potential customers and failed to educate them on CBD’s multiple benefits.

In fact, by conflating CBD with nicotine vapes and vodka, Ignite seemed to alienate any consumers who would potentially try the product for pain management, sleep, or anxiety reduction. In a statement, Ignite’s Board of Directors even claimed they struggled to secure partnerships due to an unfavorable perception of the Ignite brand. As a result, in 2019, Ignite’s budget for marketing and promotion was $22.26 million, which was more than twice what the company managed to register in sales revenue.

iCBD Oils

Video creator, recording artist, and social media influencer Scotty Sire recently added another job title to his resume when he became a founding partner of iCBD Oils. As a CBD-user himself, Sire has reported using CBD for pain relief, anxiety reduction, and improved sleep. Already, Sire set up a beneficial foundation for his company by knowing the background of CBD and the plethora of ways it can be used. By creating the first influencer-owned and operated CBD company, Sire and his partner, influencer Jay Boice, took full control of the products they promoted on their social channels.

Just one search of iCBD’s Instagram shows that while the brand first posted in June, it has already amassed 211K followers. In almost every post, iCBD describes and shows users how CBD can be used, the ingredients of the products, and even include diagrams that explain the benefits of CBD. Aiming to have a full roster of trusted influencers with products that they’ve developed with iCBD to further segment their audience, the brand is headed for success by avoiding common issues of CBD marketing.

 With the influencer marketing industry positioned to become a $10 billion industry in 2020 and the booming success of the CBD industry, both will continue to intertwine for years to come. As brands aim to strategize and avoid the common mistakes made with CBD marketing, more will follow the trend of iCBD Oils in terms of successfully identifying their target audiences, drawing in potential customers by marketing with educational tools, and utilizing the power of influencers.

This article was written by Selena Ponton

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