Interview with StackAdapt: How Companies Should Advertise Sensitive Verticals

Three wooden blocks together, two end ones are a person with the middle one being a handshake.

TapClicks recently connected with StackAdapt's Director of Platform Quality, Connie Yan, to discuss how companies should advertise sensitive verticals (i.e. cannabis, tobacco, gambling, etc.). In this article, we dive into federal laws and restrictions surrounding ad placement, how advertising sensitive verticals have changed since 2020, the successes and challenges companies should consider when advertising sensitive verticals, and more.

1. Can you introduce yourself and StackAdapt?

Hi, I'm Connie, the Director of StackAdapt's Platform Quality Team. StackAdapt is a self-serve programmatic platform that offers technology to target interest-based audiences online. Our multi-channel platform helps brands buy ads on channels such as display, native, video, connected TV, and audio.

The Platform Quality team at StackAdapt is comprised of ad specialists who work closely with our legal counsel to keep informed and compliant with all advertising regulations, including targeting requirements for campaigns. Our team vets and reviews every campaign prior to going live. They also approve every domain on our sitelist, enabling StackAdapt to have a proactive approach to brand safety. 

2. How has your success in Canada benefited as US states begin legalizing?

StackAdapt has leveraged its success in Canada to standardize a program for the US. As the US has begun legalizing sensitive verticals, StackAdapt has built a great foundation to scale deployment across these verticals. Sensitive verticals are complex due to evolving regulations, regional specific requirements, and looming privacy laws. As more states begin to legalize sensitive verticals, having solid practices in place has helped us tremendously.

Our Platform Quality team is equipped with the right tools and expertise to advise clients at every stage of the campaign lifecycle. From onboarding, campaign planning, to creative consultation, we offer support every step of the way. Over time, we've become more sophisticated in developing best practices and have built sustainable and scalable infrastructure to take on sensitive vertical complexities all across the globe. 

3. What are some of the hurdles clients have found when advertising sensitive verticals (i.e. tobacco, cannabis, gambling, etc.) in the digital realm?

Understanding advertising regulations in the digital realm can be complex. Take cannabis for example; there are federal laws, state-specific laws and even by-laws that advertisers need o navigate. Taking the time to dissect and analyze each layer of law requires effort and a level of understanding from the digital advertising perspective. 

Another challenge is turnaround time. For verticals like political, speed really makes the difference as state regulations frequently change. Keeping up-to-date on policy is crucial to execute campaigns that align with current regulations, but can be time consuming. 

With all these factors combined, it's important to have a strong working relationship with our clients. We have a team of compliance experts who work closely and collaboratively with StackAdapt clients to advise on our policies, infrastructure to execute same day turnarounds, and provide support around the clock.

4. How has advertising sensitive verticals changed, grown, or evolved since 2020?

Sensitive advertising has become increasingly complex in the past few years, especially as the popularity of brands in these verticals has grown. The lessening of regulations has allowed more brands to advertise. Considerations include geographic nuances, and privacy regulation differences within each region.

StackAdapt has been able to anticipate this growth early on and ensure we built platform infrastructure and business processes to support this global expansion. For example, since 2020, we have seen a handful of states legalize sports betting in the US, which is now available in 30 states. The industry is booming, especially among younger fans who are betting online. Last year, sports betting in the US doubled. Americans wagered more than 52.7 billion throughout the year, according to a report from Morning Consult. 

Overall, the number of Americans who bet on sports grew by 30% over the 18-month period ending in September 2021. This was an overall increase of 15.3 million bettors, according to a September study released by the National Council on Problem Gambling. This demonstrates that there is indeed an opportunity to get ahead of change when you address the increase in popularity of sensitive verticals.

5. What are some of the federal laws and restrictions companies should be aware of when advertising sensitive verticals within the US and Canada?

When advertising sensitive verticals, companies should be aware of laws at the federal level, country and regional level, and vertical specific laws. At the federal level, laws like GDPR in the EU were enacted to protect the personal data and privacy of EU citizens in 2018. In 2020, we saw similar laws adopted in the US at the state level, starting with California and its CCPA/CPRA

Three US states currently have comprehensive consumer privacy laws: California (CCPA and its amendment CPRA), Virginia (VCDPA), and Colorado (ColoPA). At least four other states (Massachusetts, New York, North Carolina, and Pennsylvania) have proposals in committee right now. There are also state-level laws that carve out coverage of individual aspects of data privacy. Examples include e-privacy book rules in Missouri and the Illinois Biometric Information Privacy Act (BIPA), which gives people privacy rights over their biometric data (such as their fingerprints or face scans).

In Canada, we are seeing vertical specific regulations come into play. Last year, Canada passed Bill C-218, legalizing single event sports betting at the federal level. Ontario is the first province to launch its regulated sports betting program. iGaming Ontario (iGO) has worked with the Government of Ontario and the Alcohol and Gaming Commission of Ontario (AGCO) to establish a new online gaming market that helps protect consumers gambling through private gaming operators. 

6. What concerns should businesses consider when advertising sensitive verticals?

Businesses should consider the evolving rules and regulations when advertising for their sensitive brand. Businesses that cannot keep up with these regulations may see a detrimental impact to the success of their advertising campaigns. 

It's critical to ensure that laws and regulations permit the brand to advertise in specific geographic locations, as these rules tend to change on a regular basis, regardless of vertical. Similarly, depending on the nature of the product or service that you are advertising for, there may be technicalities in the advertising rules for this vertical that need to be considered. For example, within the gambling vertical, advertising may be allowed if you are simply promoting the brand of your business, or not allowed if your business is advertising a medium for gambling and trading. These small technicalities in advertising may seem menial, but they are extremely important to consider when creating an advertising plan for a sensitive brand. Keeping up with these regulations is crucial to a successful advertising strategy. Finding the right advertising partner who is up-to-date creates a second level of assurance and trust for your business. 

Another concern for businesses is the quality of inventory within their sensitive vertical. Finding the right partner who provides transparency in reporting for domains and supply sources is important, as it enables advertisers to reduce media waste and ensure quality control in their digital ads. To combat the risk of low-quality inventory, ask for regular domain reporting from your advertising partner, and analyze performance per domain to ensure your media spend is being used optimally. 

7. When considering ad copy, should cannabis' or CBD' be used in place of marijuana'? What are some other insights that are helpful for advertisers to know? 

Cannabis and marijuana can be used interchangeably, but CBD should not be used. This is a common mishap in ad copy and is an even bigger issue for compliance. 

The most common compounds derived from the cannabis plant are tetrahydrocannabinol (THC) and cannabidiol (CBD). The 2018 US Farm Bill legalizes hemp that has a THC concentration of no more than 0.3%, so we've had to include additional checks as part of our vetting practices.

When it comes to ad copy, we've seen a lot of creativity. It's more important to know your audience rather than outright using the word cannabis. There are better ways to connect with the intended audience using cannabis or marijuana alone doesn't always resonate.

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