Cannabis Industry Branding Expert Patrick Toste Urges Cannabis Brands to Cherish Your Customers and Rethink Instagram
In an ongoing series this year, we’d like you to get to know some of the fantastic companies and people we’ve had a chance to collaborate with over the years. Our first interview is with an incredibly talented branding expert, Patrick Toste, co-founder of Seattle-based cannabis branding agency, Highopes.
First, a little background about you:
I’m originally from Rhode Island and graduated from California State University Long Beach with a BFA in Graphic Design. I’ve been designing for over 10 years and have had the luxury of working with both large and small brands nationwide. I am the Creative Director and Co-Founder of HIGHOPES Design. We are a creative studio that focuses exclusively on helping cannabis businesses nationwide unlock their potential through branding, packaging, web design, and marketing services. Our client list consists of over 30 cannabis companies that include Have A Heart, VidaCann, and Nuvata.
When did you first start working in the cannabis industry?
Upon moving to Seattle and experiencing the recreational cannabis market for the first time, I recognized an opportunity, and established a passion for, helping cannabis businesses build successful brands. I captured a handful of freelance projects with cannabis clients in Washington and California that I completed some branding and packaging work for. From there, I decided it was best to brand myself as a more established business than just a freelancer to provide more growth opportunities for myself and my clients.
What were you doing prior to the cannabis industry?
Before diving into the cannabis industry, I worked as a designer on the in-house branding team at The Coffee Bean and Tea Leaf which is a nationwide coffee chain based in Southern California. In this position, I gained experienced managing and expanding a large brand through packaging design, digital advertising, in-store marketing, and other similar avenues.
After moving to Seattle from Southern California, I decided to explore the world of advertising by joining the team at Publicis Seattle as a designer. At Publicis, I was able to work with even larger brands like T-Mobile and assist in a variety of nationwide digital advertising projects. However, my true passion for branding was established there when I led the design team on the rebrand of the locally world-famous radio station, KEXP.
What lesson did you learn BEFORE cannabis that’s been most valuable in cannabis?
I’d say the lesson I learned before I entered the cannabis space that has been most valuable to HIGHOPES and our clients is the importance of knowing and understanding your customers. This methodology was something I gained over the years of working with larger, nationwide brands like The Coffee Bean & Tea Leaf, T-Mobile, and even Under Armour. I was able to realize how these companies were branded and marketing was significantly impacted by what their consumers think, want, need, and feel.
Something I see all too often in the cannabis industry is a rush to bring a product to the market with the idea of targeting all consumers due to a scarcity mindset. Operationally I understand why these businesses feel this is the right approach, but in hindsight, they realize they do not know who their customer is and what delights them which results in an unfocused and unorganized brand direction.
Is there a particular cannabis branding project you’d like to highlight?
At HIGHOPES we are extremely proud of all the work we create for all of our clients, but I’d like to highlight the project we did for the California-based vaporizer brand, Nuvata. Nuvata approached our team with only a product and a vision so we assisted in establishing their positioning, messaging, branding, packaging, website, and marketing. Each branding and marketing effort we performed was put through the filter of the established strategy resulting in an immensely focused and concise brand for the market. With the Nuvata team’s help, we were able to identify and understand their target customer and then make every branding and marketing decision with the goal to bring them delight. The end result spoke for itself as within the first year they spread across the entire state of California and gained considerable brand awareness.
What’s the biggest misconception cannabis companies have about branding?
I think the biggest misconception about branding in the cannabis industry is that your brand is simply your logo when this could not be farther from the truth. In essence, your brand is actually not controlled by you but rather your customers. A brand is the opinion and feeling a customer has about your company based on a combination of your logo, products, packaging, website, marketing, social media, customer service, and so on. For that reason, cannabis companies can only strive to manipulate the emotional response of their customers with the goal of creating a positively recognized brand.
In your view, what is the biggest branding challenge facing cannabis companies today?
I think the biggest challenge cannabis companies face today when building a brand is the lack of beneficial advertising and marketing opportunities. As mentioned in my previous response, if your brand is simply the feeling a customer has of your company then it becomes very difficult to establish a positive association with customers when you cannot take advantage of the many ways of influencing their point of view. Additionally, customers cannot begin to create that strong bond with your company when you do not have the ability to raise awareness of your brand through advertising and marketing channels.
What will be the biggest branding challenge in 2020?
I believe the biggest branding challenge in 2020 will be establishing and solidifying customer loyalty. Most cannabis markets, both medical and recreational, are seeing a surplus of emerging brands which provides customers with an overwhelming amount of options to choose from. Additionally, product innovation has not kept pace with the number of companies entering the market leaving customers with a plethora of brands essentially selling the same product. These two factors combined prove the importance of understanding your specific customer and catering everything about your brand to what brings them delight. When that emotional bond is created with a customer it creates a sense of loyalty and trust in your brand that becomes invaluable to your success.
What can companies do to alleviate their branding challenges?
When it comes to navigating the regulations around advertising and marketing in the cannabis space companies can look to outside-the-industry partnerships to alleviate these challenges. When a business understands their brand outside the lens of cannabis it allows the possibility of partnering with non-cannabis companies that share the same mission, vision, and values. Through these types of situations, cannabis brands can advertise and market indirectly through their partner to an audience that is similar, if not exactly, their type of customer. For example, Plus Edibles recently partnered with Casper for their line of CBD gummies as both brands can benefit from each other’s audience.
For establishing customer loyalty, cannabis companies simply need to take the time to understand who their target customer base is and either build or shift their branding to align with that audience. The more focused the ideal customer then the easier and more efficiently a brand can market to their wants and needs. Every move a cannabis brand makes should be filtered through the lens of their consumer.
In your view, what is the most under-rated tool in the cannabis branding toolbox for cannabis companies?
I believe the most under-rated tool in the branding toolbox for cannabis companies is their brand website. This goes for cultivators, manufacturers, dispensaries, delivery, and ancillary businesses. With all the regulations surrounding advertising and marketing, your website tends to be the only platform where you can comprehensively communicate to your customer all the details of your brand. Additionally, depending on your business type, it tends to be a major channel in driving sales. For these reasons, the proper investment should be made in creating a website that is aesthetically attractive, engaging with content, and functions as a conversion tool for your business. At the end of the day, no matter who your customer is, people tend to take brands seriously that look like they take themselves seriously and your website is the perfect platform to communicate that.
In your view, what is the most over-rated tool in the cannabis branding toolbox for cannabis companies?
Although still an important cog in a cannabis companies marketing plan, I believe the most over-rated tool in the branding toolbox for cannabis companies is their Instagram profile. Many of the cannabis brands we speak with feel that Instagram will drive a majority of their sales and the data just doesn’t support that theory. Don’t get me wrong, I think it’s very critical for cannabis brands to have a consistent Instagram presence to communicate credibility to customers but I don’t think it requires a premium-level investment. The customer journey from Instagram to purchase is long and complicated resulting in frequent drop-offs, especially for CPG brands. Additionally, with the algorithm changes in Instagram, it’s most likely that only a small fraction of a cannabis brand’s followers are even getting fed their posts. My recommendation to our cannabis clients is to invest in their Instagram as a way to raise brand awareness but don’t throw all their marketing dollars at it thinking it will drive sales.
What’s the BEST piece of cannabis branding expert advice you give everyone you work with?
Focus on a target audience. Your brand doesn’t need to alienate customers, but it needs to understand who is going to hear you the loudest.
Should your cannabis company double down on a marketing or PR campaign during 420? It’s popular for marketing firms and PR agencies to develop elaborate campaigns during this famous cannabis holiday. But is it worth it?
Who Are Your Cannabis Customers?
It depends on what kind of cannabis business you have and who your customers are. Today’s cannabis buyers aren’t ALL celebrating 420. Lots of people have to go to work, take care of kids, or have other responsibilities that still happen on that day – but they might view 420 promotions to stock up on their favorites, either before or after the day itself, but they might not be particularly engaged with a 420 PR campaign.
For example, if you’re a cannabis dispensary, your core customer is probably expecting discounts. But they’re also getting discounts from every other dispensary, and probably a few brands. Would you get more bang for your buck with a “prepare for 420” campaign, or maybe a “replenish your stash” campaign AFTER 420?
In 2021, the Eaze Cannabis Report identified several days that were bigger sales days than 420 – and a lot of those holidays are all but ignored by many cannabis brands, while journalists are still looking for holiday gift guide inclusions.
If you’re a 420 B2B company, you probably know better than to run any kind of promotion to your B2B cannabis customers – it’s a time of year that is particularly stressed for cannabis brands with consumer customers.
Can You Create a Splash?
What about CPG cannabis brands? A lot of cannabis brands will use 420 as an opportunity to create a word of mouth or cannabis PR campaign. But is that the time for your brand? If your idea shows an incredible understanding of your community, or is truly newsworthy, then it very well may be a great time to grab that coveted coverage, but it probably comes at a diluted share of voice against your competitors.
Does Your Budget Compete?
Is a 420 PR campaign even in your budget? If you don’t have a budget that competes with your aspirational competitor, then you might very well be better off developing an omnichannel or a PR campaign at a different time of year, that gives you a great share of the attention. Think about what Amazon did with Prime Day, and consider ways you could own a day when no one else is looking. It’s one way you can make your PR budget go further.
Or you could look at 420 to open the conversation with a whole new audience through a guerilla marketing or word-of-mouth PR stunt that creates buzz.
Activism and impact are a core part of the 420 culture. 420 might be the start of a year-long purpose-driven initiative for one of the many social and cultural causes important to your community.
There’s no right or wrong answer to whether of not a 420 PR campaign is right for your brand. It’s more a matter of whether 420 fits in with your strategy.
Meet Allison Disney, for Receptor Brands, Allison serves as Partner and Business Strategist for cannabis brands who want to stand out from the “sea of sameness.”
First, a little background about Allison Disney:
I love my job. At Receptor Brands, we transform relationships between cannabis brands and their customers. As Business Strategist, I help define the field of opportunity for my clients’ businesses in this exciting new economy.
I’ve spent almost two decades leading global teams to produce award-winning advertising and marketing campaigns for some of the world’s most beloved brands, including M&Ms, Ziploc, Bacardi, YouTube, Special K, Cheez-It, and Johnson & Johnson.
After working in highly regulated and nuanced markets my entire career, I’m excited by the opportunity to work alongside our client partners and build culturally relevant, attention-getting brands in cannabis.
I live in Chicago with my botanist husband, Ryan, and, tiny boss, Maxine.
When did you first start working in cannabis?
Do you sit on any industry boards or associations that you’d like to mention?
NCIA Marketing Committee – Officer
What lesson did you learn BEFORE cannabis that’s been most valuable in cannabis?
I didn’t expect my experience managing global brands to be as relevant as it has been. Particularly when working with multi-state operators, understanding how to develop strategic brand communications that travel well, while taking into consideration local nuance and regulatory guidance, enables us to deliver more effective solutions more quickly.
Is there a particular cannabis project you’d like to highlight?
One of my favorite projects continues to be the art program we’ve developed for Cresco’s Sunnyside dispensaries. As a creative agency, having the opportunity to collaborate with local artists to create an inclusive and welcoming space for shoppers is a dream assignment.
What’s the biggest misconception cannabis companies have about marketing?
The biggest misconception is that “marketing and advertising aren’t possible in cannabis.” It’s simply not true. Brands must comply with regulations, but there are lots of ways to engage customers if you’re willing to think creatively and be innovative about how.
What were you doing prior to cannabis?
I was an SVP, Client Service Director at Energy BBDO in Chicago, and before that a Client Parter at AMV BBDO in London.
In your view, what is the biggest cannabis marketing challenge facing cannabis companies today?
I see too many cannabis brands getting lost in a “sea of sameness” because they believe, or more often hope, that their product experience will be enough to convince consumers to choose them. The competition in the industry continues to increase and consumers are becoming more familiar with shopping in the regulated market.
As companies look to sustain early business success, the role of their brand and how they connect people with it through marketing and advertising activities is incredibly important.
I applaud every operator who successfully gets their product or service to market; that is a particularly difficult task in cannabis. Getting that product or service into people’s hands, lots of people’s hands, and having them come back to buy or use it again is the next, biggest challenge that will determine the success of cannabis companies.
What will get easier in cannabis marketing? What will get harder?
As cannabis becomes more mainstream, companies will have to do less-and-less to educate people on the positive impact of an increasingly complex industry. It won’t be a fast change, but the need to explain the benefits of cannabis to consumers, the positive impact to regulators and the opportunity for potential business partners should get easier. Although, I acknowledge, the [cannabis] industry will inherently become more complex as it grows.
Increased competition will make it harder for companies operating in the industry. Obviously, the struggle for investment capital, the retention of talent, and the fight for customer attention all get harder with increased competition.
What can companies do to ease their cannabis branding challenges?
Get help from capable agency partners, specifically those with cannabis experience and a commitment to staying on top of the rapid changes within the industry. Faster, more creative, and more effective solutions are much more likely when your agency partners are actively engaged in the industry every day.
In your view, what is the most under-rated tool in the brand marketing toolbox for cannabis companies?
Talking to consumers. Cannabis companies are finally getting access to a meaningful volume of consumer data, but purchase data is a backward-looking view of WHAT people do.
Understanding WHY people do what they do is important for building brand strategy, marketing plans, and advertising or PR campaigns. If you’re searching for ways to create a more innovative product, attention-grabbing campaign, or compelling promotion, meet with your core customers and listen to why and how they use this category.
In your view, what is the most over-rated tool in the branding toolbox for cannabis companies?
A brand logo. Don’t get me wrong, I appreciate a well-designed visual identity, but what good is a fantastic brand mark if no one ever sees it, remembers it, or has any attachment to it? Building a great brand takes more than choosing a great name and designing a beautiful logo.
What’s the BEST piece of advice you give everyone you work with?
Choose good partners. Nothing will be more costly to your business than time, energy, and capital spent with a poor-fitting partner.
What’s your advice for people who want to get into cannabis brand marketing?
Be clear about why you want to work in the cannabis industry. There are a lot of opportunities to work in marketing and advertising at incredible companies where you can get a much more structured introduction to the field. While there are many advantages to working in cannabis, you won’t find a playbook for how to do your job. If you’re not clear why you’ve chosen to work at a cannabis company, you may get lost in the ambiguity that is inherent in the industry.
How can someone contact you, Allison?
Thanks for sharing your cannabis branding insights with us today, Allison.
Maybe you’ve never hired a PR firm before, or maybe it’s been a while and you’re just unsure of what a PR agency costs. Either way, you’re asking yourself, “how much will a PR firm cost me?” Since PR usually falls within the marketing budget, let’s start there.
To grow your position in the marketplace, a good marketing allocation is about 15% of revenue. In 2022, the average marketing budget for B2C brands was 13.7% of revenue, and for B2B brands, it was about 10% of revenue.
So if you’re an average company, and you’re looking to maintain your position, you’re probably spending in the range of 10% of revenue. If you’re looking to dominate, your budget should be higher. Ambitious startups typically allocate between 12-17%. A typical breakdown might be that 1/3 of the budget is advertising, 1/3 of the budget is content, and 1/3 of the budget is PR. Large international agency budgets can be $380,000 or more annually, while a mid-range agency budget typically clocks in at $156,000-$180,000 annually and a smaller agency budget would be $120,000 per year, a mid-range freelancer could be anywhere from $36,000-$100,000 a year. If you’re a CPG or DTC brand with a marketing spend of under $100,000, then you might consider consumer product PR sprints, which feature micro contracts that align with key buying seasons. Hiring a PR agency is an investment, but considering PR converts ten to 50% better than advertising, PR is indeed a place where the ROI pays off.
So what goes into a PR agency’s fees?
According to Muck Rack’s 2021 State of PR report, the number one cost to a company to PR is the agency, which makes sense because unlike programmatic ad spending (a typical minimum is programmatic spend is $25,000/month), PR agencies rarely have a minimum spend or activation fee requirements outside their retainers.
PR agency rates increased, and in 2020, the average PR agency CEO billed $417 per hour, while VPs clocked in at $319 per hour and Account Managers billed $256 per hour. The average blended rate was $240 per hour. It’s safe to say that if your PR team has executive PR experience, and your agency spends an average of 10 person-hours per week on your account, your monthly retainer will be around $13,226 per month.
If you require more executive hours, your fees could go up. If you work mostly with a junior team, your rates could go down. Oftentimes, fees are different depending on your strategic objectives. For example, if you want to keep a firm on retainer for a few calls a month, and no proactive media outreach, your annual fees may be considerably less. If you are trying to secure investment or you’re pre IPO, you may find your fees are on the higher end of an agency’s fee structure.
It’s a balance to strike your budget with your goals, but when asked, I always give the same advice to CMO’s and startup founders. In 2020, 45% of companies increased their PR budget. If your budget is $400,000 or more per year, hire an agency that does $20 million+ in revenue. If your budget is $180,000 per year, hire a boutique PR firm, with less than $10 million in revenue. If your budget is $60,000 per year, don’t hire an agency, hire a freelancer.
Odwyer PR’s annual report shows rates increased considerably between 2019 and 2020, so if your agency didn’t raise its rates, you’re fortunate.
Agencies are notoriously reluctant to share minimum retainers, but in 2013, several agency executives did just that with PR Observer, an industry publication.
“To properly scope a client program and assign the proper team support, we feel $15,000 – $17,500 per month is a reasonable starting point.”—Anne Green, President & CEO, CooperKatz & Company, Inc.
“Our retainers range from $7,500 – $50,000 or so. Crisis costs are different and generally charged by the hour with a $20,000 minimum.”—Ronn Torossian, Founder & President, 5WPR
“We have some clients that pay us $100,000 or so per year, some clients that pay us more than $100,000 per week, and many clients that pay us $100,000 or so per month.”— Mark Hass, President & CEO, Edelman United States
“Our clients generally pay between $15,000-$30,000 a month depending on the workload.”—Stu Loeser, Founder & President, Stu Loeser & Co.
- Strategies about how to stand out from your competitors using PR
- Internal and external communication strategies that match your growth goals.
- Campaign development and creative activations for marketing opportunities.
- Media relations, and securing regular media coverage, speaking engagements.
- KPI and business impact reporting.
- Copywriting such as press releases, speeches, white papers, and branded journalism.
- PR crisis planning – but not necessarily crisis management.
- Partnership strategy and potentially management such as cause, social impact, or purpose-driven PR initiatives.
- Executive training, including media training, interview prep, and research or executive ghostwriting.
- Content strategy for video, social media, and inbound leads.
- Content creation oversight, including social media, photography sessions, and video development.
- Poll or research development, implementing the poll may or may not be within the agency’s retainer.
- Peer agency coordination, such as with branding or advertising agencies.
- PR campaigns that “make the news,” are designed to create word-of-mouth or media opportunities.
For a complete list of what we would include in your PR retainer, reach out to us and tell us more about your business and your goals.
Hiring a PR agency is an investment, but considering PR converts ten to 50% better than advertising, PR is indeed a place where the ROI pays off.
Because of the competitive nature of customer acquisition, hyper-growth DTC (D2C) brands are always looking for ways to improve word of mouth and awareness. So it’s no surprise that a lot of fast-growing DTC brands of all sizes are asking, “should we join the metaverse?” The answer to should DTC brands join the metaverse naturally depends on several external factors. From an awareness and PR perspective, there are some considerations before DTC brands joining the metaverse.
What Have You Learned From Watching Other Brands?
Brands like Nike, Warner Brothers, Gucci, and Wendy’s are already in the metaverse. Have you watched these brands closely and experienced their ventures? CMOs and founders intrigued by the metaverse and its opportunities should be sure to sit back and watch a bit. What worked, what didn’t? What inspiration can you take from these digital experiences? Notice many of these ventures are co-branded, which is a great way to double the potential audience size – so what partnerships would enhance the digital introduction of your DTC brand? Gamers are already intimately familiar with NFTs and Virtual goods, so what games appeal to your audience? From breakfast cereal to gaming super powers to fashion add-ons there truly are endless ways for DTC brands to join the metaverse.
Have You Tried Virtual Goods Yet?
46% of consumers haven’t bought a virtual good yet because they don’t understand how it works and 35% might try it if it comes from a brand they trust (full report here). Those two considerations are a lot to unpack. But if your customers are curious early adopters, AND they trust your DTC brand, a great way to test the waters is to experiment with virtual goods (NFTs) like music, memes, or even artwork.
If your customers are curious, but midrange adopters, maybe you set the stage and start educating your consumers a bit, adding to that trust bucket so when the day comes for your brand to fully invest, your customers are ready to come on the journey with you. . The key to intriguing your customers to start their virtual good collection is to pair it with another passion or interest. Virtual goods like avatars or virtual event tickets are easy enough to understand to most consumers, even if they aren’t ready to use them or engage with them yet.
There’s a tremendous value in being the trusted brand that takes your customers by the hand to introduce them to the digital landscape that will make social media look like a flash in the pan.
What Will You DO Once You Get to the Metaverse?
With something like the metaverse, the end goal isn’t to BE there, it’s to activate there. Given that for most consumers, the metaverse is just some vague notion they don’t know how to even access, you’ll need to take stock of where this lands on your priority list. If your customers aren’t in the 18-34 age range of typical NFT purchasers, then this is a pretty big consideration.
Now, if your only goal is to be an early mover, and you have the bandwidth, that is the financial and team resources to do so, by all means, go for it, it’s an interesting brand move right now and it may even get you some press. Media coverage over brands with placement in the metaverse won’t garner attention for long – the metaverse will be as common as having a website and social media. And yet, even now, simply being in the metaverse itself doesn’t garner media attention. You’ll want to activate in some interesting, notable way. The options are endless, but keep in mind that your audience is likely to be small, but starting with a metaverse experience is a great way for the brand and its customers to connect in the virtual world.
The “Ready Player One” vision of the metaverse isn’t quite here yet. For one, adoption hasn’t reached a tipping point yet, but it won’t be long. Today’s consumers are now used to moving into new platforms every few years and the metaverse will follow a similar trend of other platforms: younger people will start, but soon their parents will follow, then their parent’s friends. Instagram was the domain of the youthful for a long time, then its users expanded; for TikTok that process was much faster some of the most vibrant TikTok hashtags belong to GenX, and they’re in their 50’s already. The metaverse is coming, tomorrow’s brand will be there.
As a digitally forward PR firm, we can help you maximize the digital world. Give us a call.