Cannacurio Podcast Episode 45 with Ben Walters of Pioneer Intelligence

Pioneer Intelligence founder, Ben Walters, joins Ed Keating on the Cannacurio podcast to talk about how his company leverages data to benchmark and explore marketing performance of consumer-facing cannabis brands.

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Cannacurio Podcast Episode 45 Transcript

Ed Keating:

Welcome to the Cannacurio podcast powered by Cannabiz Media. I’m your host Ed Keating, and today, I’m joined by Ben Walters, founder of Pioneer Intelligence. Ben, welcome to the show.

Ben Walters:

Thanks, Ed. It’s great to be with you.

Ed Keating:

So, I’d like to hear more of the creation story of Pioneer. How did it come to be and why did you do it?

Ben Walters:

Yeah. Again, thanks for having me on. It’s cool to be with you. My professional career has had a variety of different chapters to it. I started in the world of commodities many, many moons ago. I did the first seven years, the first three here in the East Coast of the US and the last four in China. 

I moved to Shanghai at the end of 2003 expressly for this commodities business. Found a bit of success in Mainland China, but more opportunity across the Asia-Pacific region and decided that that was a place that I wanted to spend some time, but also recognized that commodities was not what I was put on the planet to do.

So, I used to come home at night and bang my head against the wall in how you differentiate yourself, and actually took a couple cracks at that trying to make that business something more than it was. And at the end of the day, I made the determination that I wanted to go in another direction. 

And so, I had this idea of an original brand concept, and that became very appealing to me, this idea of, if you’re trying to sell something that everybody else was selling, let’s go the opposite direction and create something totally original.

And so, I had a company called Ospop that I started in 2007. I think we did specialty footwear, really shoewear shoes, not too dissimilar from Chuck Taylors, a canvas vulcanized shoe, and made some accessories. And that was a seven-year journey. The first three years far exceeded expectations in terms of what I thought was possible, almost by any measure. I had a lot of fun and really enjoyed the idea of building a brand and doing the blocking and tackling on a shoestring.

Yeah, some pricing mistakes in year three and sinking too much capital into inventory was my undoing. But at the end of the day, I did finally exit that business and that opened up a door for me at Beats by Dre. And so, this was the Beats brand, just prior to the Apple acquisition. The brand and a lot of smart people had done a lot of work in the Asia market. My focus was really on China. Had done a lot of really good work in constructing a sales architecture and distribution, but the brand was leveraging communications and marketing assets developed in Culver City, California. 

And so, our remit was okay, let’s get local. Because as much as the value proposition of Beats had and probably still continues to develop, it’s a lifestyle brand. And so, communicating in local language, through local communications channels, using local ambassadors is key. And so, we did that, and when we finally got that up and running and turned on the lights, which it was pretty amazing, the business really did hockey stick. And again, a lot of people did a lot of work for us to go in there in that glory moment and [inaudible 00:03:15].

But amongst our mandate was not only, obviously, to grow revenues, but being a lifestyle brand was to build what they call Beats Army, with this impassioned group of brand loyalists who were going to engage with the content. And when we started to do this in China, the people came and they came and they came, in huge, huge numbers. And so, that was really my first exposure to big marketing data, this endless supply-

Ed Keating:

Ah, okay. Yeah, right.

Ben Walters:

… people with a very, still green systems, whereby, okay, let’s bucket these people and figure out how to organize them and then continue to connect with them, and back into reconversion process and get that funnel going. 

And so, I took to the numbers and I really enjoyed it. And again, a lot of people were involved in it, but we had really good success with it. And so, I had spent 13 years in Shanghai, all of them, almost every day, an amazing one, but realized that was not a place where I wanted to grow old, and so, I repatriated back. 

And when I came back to the States, I had a consulting gig in the cannabis industry. I’ve been a cannabis consumer since my late teen years and always very interested in nascent markets, and so, I jumped at the opportunity there. And alongside that project, I started to collect data on consumer-facing brands in the space, without really a clear idea of what I would do with that data set, but that perhaps me or the organization that I was working with, we could learn things through the data that would give us a leg up in understanding that brand-consumer relationship before reading about it in another publication or through some other brand’s press releases. 

Ed Keating:

Interesting. So, there was finally data for you to grab onto in this cannabis space, which some argue is a commodity and others argue is very brand rich, and I think we could probably do a whole podcast just on that. So, what kind of data did you gather, Ben, and how did you put it together?

Ben Walters:

So, at that point, when I first started to collect the data, the data set looked, in its structure, similar to what we do now. That data set grew in breadth and depth, but focusing in three areas, social media, online news media, and web-related activities. And so, the data’s all ethically sourced data that we are collecting. We had our own API plugin into Meta, which was, again, back at that time was still Facebook/Instagram. And we work with a company called Meltwater and have for a long time on online news. 

They have this monster pipe, I think the biggest pipe in the industry, and use some fairly sophisticated Boolean strings to make sure that we’re attributing brand mention in online news into the right bucket. And then web activities looking at traffic-related metrics. So, UVs, visits, time on site, bounce rate, pages per visit, and then some backend stuff as well related to on-page and off-page SEO, keywords and the like, and [inaudible 00:06:41]. Yeah, that’s some of [inaudible 00:06:45] there.

Ed Keating:

And I think back to, over the last couple years is, you and I have gotten to get to know each other. I think you’ve shared examples with me where some brands would suddenly see a rush of, let’s say, new social media interactions, and then you’re able to pretty much deduce over time that that company just bought a bunch of followers because the engagement dropped off, the number of followers dropped. I mean, is that the kind of blocking and tackling that you have to do with this data to help your customers understand some of these blips or trends that they see that may be easily explained away?

Ben Walters:

Yeah. We’re in the position to look at it at a macro level and then get super granular, super fast. And we have some proprietary tools that let us go see when the needle actually moves and then go back and look at the content and see what’s happening there. And our systems can also detect whether or not that’s organic in nature or manipulated. And yeah, I think by and large, the manipulated is probably purchase of followers, but then there’s other things. Brands often do sweepstakes activities and there’s nothing wrong with that.

Hopefully, you execute where it’s done in an on-brand manner, but that’s a way where you’re going to see spikes in user growth and engagement. And those will tail off. But generally speaking, if you’re doing a well-executed sweepstakes campaign, the fall-off, it’s not going to be so severe and that’s a way to effectively build your audience. Whereas, there are brands that go out and purchase thousands, tens of thousands, even hundreds of thousands of fans or followers, and then you see that decay each and every week [inaudible 00:08:34].

Ed Keating:

So some of these strategies remind me of consumer-packaged-goods data and information. I used to work for somebody who came out of Kraft Foods and she really knew this space well. Even though we’re in publishing, there was some of that came to us as learnings, like coupon drops and things like that, that are going to make changes. So, that leads me to think to your customers, which is, who uses these insights that you create and what decisions are you helping your customers make? Is it competitive intelligence? Like, “Oh, Ed’s company just did a big coupon thing, that’s why they’ve moved.” What are people doing and how do they ingest these insights that Pioneer creates?

Ben Walters:

Yeah. That’s a great question. I think we’re still learning that, which is great. Obviously, I think so many people [inaudible 00:09:24] in the same boat, right? Without a doubt, there’s utility in our intelligence for brand operators, retailers, both dispensary and delivery, the investor community, and then other marketing service providers. I think there are other groups, verticals, inside the space and adjacent, that can also find utility, but let’s focus on those first four. 

And if we look mostly at brand operators, I came to pioneer as a brand operator. That’s how I built it. Lots of utility there. I’ll give you a few. So, internally, the intel that we derive can be used to measure campaigns. So, a campaign can be anything from event sponsorship, launching into a new product territory, updating your website, paying a group of influencers to do something like that as a means to measure some sort of campaign or activity. Measuring personnel performance in-house or external, freelancers or agencies is another good use for it.

And then, for larger organizations where you’ve got a cultivation department and maybe a finance department and sales, it’s another means for marketing to be able to present in an all-hands meeting or something like that, this is what we’re doing in marketing, and this is how we’re helping to move the needle for them. So those are some internal uses. Yeah. 

Ed Keating:

I was going to ask you a question, because you talked about if an event occurs and what might the impact of that be. So, does that mean that there is some almost, like geofencing impact that you can measure, or you can say, “Well, in the Connecticut market, this happened,” or is it not quite that refined yet?

Ben Walters:

That’s not built into our scoring system at this point, but with a little bit of manual work, we can make certain assessments on the localization, particularly around online news, right? Because there, if you do a review of it, you can see where if you’re getting into local and regional policy records, how that’s helped to bump up an online. And yeah, you can also do that with decent levels of accuracy around web activities.

We’re not at the point where we’re doing all that much on social. But yeah, and the idea is right. So you have a baseline of where you were at before given activity started, you know where you sit, and then where does it spike up to at the height of that activity or the height of the influence of that activity? And then if you naturally would go back down, are you above where you were at the beginning?

Ed Keating:

Yeah, exactly. So is it accretive or not? So, I think we focused a lot on the internal users and benefits. Flip side, is there an external user or more of an observer, investor?

Ben Walters:

I think it’s just sticking with the brand operator. Two big external use cases for the product, one is as a tool for your wholesale department, right? So, if you’re a brand that enjoys awareness and engagement, you can bring that into target dispensaries where you want to get in the door, or if you’re already in the door and you want to get better shelf space to talk through this idea of our brand is enjoying increased awareness and engagement. 

So obviously, buyers would be interested to know that when they’re making their purchasing and then merchandising decisions. Then also for co-marketing opportunities, for a big brand can go into a smaller retailer and potentially leverage their awareness as a means to negotiate a better deal with a smaller dispensary, because they can maybe help elevate the awareness and the awareness for that smaller dispensary. 

Ed Keating:

Excellent. 

Ben Walters:

But once we… Yeah. 

Ed Keating:

No, I was going to move on. I’m curious, just from a numbers perspective, how many brands are you covering now and what does it take for a brand to get on your radar screen? Because I imagine that there’s a lot of brand proliferation, but I don’t know if that’s true. That’s my biasing in hypothesis. So how many are on the radar screen and how do they get there?

Ben Walters:

Sure. So, there are a lot of brands in cannabis. Some may say it’s, particularly in certain territories where there are too many. As of last week, about every two months, we activate brands from our pipeline into our active brand pool. Brands will sit in our pipeline for six months. The reason being, for almost all the metrics that we look at, we do include, we look at absolute position and then change in period. So, to get a quarter-over-quarter measure, we need 26 weeks of data. 

So a brand will sit in our pipeline for 26 weeks before we move them to an active brand pool. And I would say this year, every two months we’ve been adding another 25 brands to the active brand pool. We’re now at 705, I think, as of last week. And then the other question about how a brand gets in, it’s a really organic process and just happens naturally. 

There’s no prerequisite to getting involved. If you’re a licensed seller of THC, if you’re a THC wholesale product, we’d love to have you. And so, we publish the brands that in our interactive brand pool and in the pipeline on our website. And so, for anyone out there, who’s looking at this, if your brand that you work at or you love is not on our radar, by all means, hit us up and we’ll be happy to add them.

Ed Keating:

Excellent. So, one of the things I was thinking was, is there a minimum requirement for a brand, like how many geographies does it need to be in or sales, social media clout? I guess, which factors have perhaps the most valance so that they can break through that organic process to be like, “Pick me. I want to be in the brand pool.”

Ben Walters:

No. I think, to our mind, is if you’re actively branding, right? If the team stumbles upon a brand that we hadn’t heard about, that’s actually been around for a little bit, but their last social media post was from November, and when you go to their website, it’s showing a copyright date of 2020, we’re not running to include them. But for brands that are in the moment and of the moment when we’re reading about them and go see them, if they’re actively marketing, yeah, we’d be happy to add them to the mix.

Ed Keating:

Excellent. So not all brands are created equal, and brands, there are different types of brands that are out there. Some are tied to celebrities, some are owned by MSOs. I know last year we did some brand research just to try and get an understanding of which brands were carried across some of the major MSOs, and it was hard to dig into that data. There’s also craft brands. So, I’m curious, from where you sit now with all this data that you’ve been ingesting and observing, what is your take on these in terms of the celebrity brand, MSOs and these different, if you will, flavors of brands or types of brands? Which ones do you think are most impactful and why?

Ben Walters:

Yeah, it’s a good question. I think if we’re going to focus on, let’s say, celebrity, MSO and crafters, for sure, room for all three in our industry. And I’m sure that all three will be a part of it, going forward. So if we’re going to talk about celebrity brands, right? I think celebrity brands, or celebrity affiliations, I guess I should say, make a lot of sense. First of all, our culture is obviously celebrity obsessed or celebrity focused. So there’s that, but the other thing is that cannabis marketers face a huge number of obstacles in terms of what you can and can’t do, from a regulatory perspective, on marketing and communications. 

And so, leveraging the celebrity names as a means to get your brand name out there or communicate a particular product launcher initiative makes a ton of sense. There are a lot of celebrity brands and some of them are doing the celebrity affiliation thing quite well, and maybe others a little bit more, I don’t know, a little bit more head scratching. If we’re going to dive into it, I would think celebrity brands, we could bucket them, thinking about ambassador teams is one approach. 

A group out in Oregon started doing that years ago called, Oregrown, and they did it, I think, reasonably effectively, many, many moons ago. Claybourne is a group that’s doing it and they’re leveraging different types of athletes, from rodeo riders, BMX motocross. And so, using ambassadors to do it. And even Trulieve, last month or two months ago, used Ethan Zohn, who was one of the first winners of Survivor, quite effectively. Because he ran the Boston marathon and was talking about use of their product. And they have recently come to the Massachusetts market. So, that was quite an effective use in terms of ambassadors. 

CANN has done a really good job. You’re talking about building an investor roster, and so that they can use… I think Gwyneth Paltrow, Rosario Dawson, Baron Davis, and the list goes on. Of people who I don’t think appear in any of, or don’t necessarily appear in any outward communications, but are using their voice or their soapbox as a means to further the CANN name. 

Line extensions is another celebrity affiliation that can be really effective. Viola did one earlier this year with Allen Iverson, which I think was super effective. AI still has a lot of clout in a lot of places in culture. Jeeter, the pre-roll brand out of California, did one with Dwayne Wade. So those line extensions can be quite effective. And then you have the celebrity face brands, where the celebrity and him or herself becomes the face of the brand. Bella Thorne has one with Forbidden Flowers. 

Seth Rogan and his brand Houseplant, they seem to be doing a lot of things really right when it comes to brand development. Whereas, yes, you know that it’s Seth Rogan, but you don’t see his face or read his name when you go to their website, till way down on the page. And they’ve actually come up with an original brand position that’s not reliant upon Seth Rogan, but doing something totally different, with neatly-designed houseware accessories, lamps, cups, and the like, and then good-quality cannabis to go alongside of that. It’s really quite interesting.

Ed Keating:

I mean, this gets to the heart of things, how much do you think that matters to the average consumer? Because the thing that I’m trying to wrap my head around, and we talked about earlier is, unless that brand is available in your state and you’re a consumer, you’re not going to have access to it. Plus, there’s no real national advertising platform yet for this. 

So, I’m curious to get your thoughts as to how does this move the needle? Does this work really well in California or in these markets that have been around for a long time? Whereas, on the East Coast, it’s mostly MSOs because it came out of a medical market model and the brands aren’t quite as established? So, I guess the question is, do consumers care, and does that show up, let’s say, in perhaps, sales, if you could even go, extend that far out?

Ben Walters:

Yeah. I think there’s a few things to unpack there. Market maturity being one, and then the nature of the licensing within a state and the competitive nature. There are some states that have growing cannabis consumption where the licenses are still held pretty tightly, and so, brands don’t really need to do all that much. Question, I think, at the top was, does it matter for consumers? I also think that brands… the consumer, but as a means to raise awareness with prospective dispensary clients or investors or the like. I’m sorry if I lost track on your question.

Ed Keating:

No, that’s all right. I was just trying to figure out, for the average consumer, is it something that really affects their purchasing behavior? Because some of these brands are not available in all 39 markets that are medical and/or adults. So, I was just curious how much that really plays out in terms of, let’s say, increased sales.

Ben Walters:

Right. I think it’s a great question. Brand loyalty, I think, it’s an even bigger question even in places where getting about at a national level, but people who are going to go in and buy a particular product in a given market, even if that product is readily available each and every day is another… I think it’s an interesting question. 

Most brands aspire for growth. And so, as a means to raise awareness, again using leveraging celebrity influence is a way to raise awareness for your own brand, whether your aspirations are big or gargantuan. And if you’re only in a couple states or you have a national footprint, I still think that there’s a case to be made that an effective celebrity strategy can be beneficial. And again, it also comes down to what the nature of that business arrangement is.

Ed Keating:

Yep. No, that makes good sense. And you’re right, I mean, the celebrity does cut across the sovereign nations that all these states have turned into with their own rules and regulations. And if you know that Mike Tyson is doing something or Snoop Dogg or whoever, that’s probably going to break through, at least in some way. 

Focusing a little bit more on your business then of Pioneer, I’m curious, how do you find customers? How do they find you?

Ben Walters:

We’ve been quite successful in terms of our own top-of-funnel activities in so much as we’ve got a really nice subscriber list, and being able to see who’s opening up the emails that we send out on a monthly basis. And I’m not afraid to hit someone up from our email list who I know is regularly reading our newsletters… interest in it. Yeah, I think that’s our primary way is using our email subscription as a means to bring people in and then leveraging it from there.

Ed Keating:

Excellent. Yeah, I know. And your newsletters are certainly insightful. And as you look across those people who do subscribe and moving toward paying customers, do they tend to come from MSOs, mom and pops, vendors, brand companies themselves? I mean, because they certainly exist. I mean, who fits into that bucket of customer for Pioneer?

Ben Walters:

Yeah. We’ve done some work with agencies and they’re using our tool and reporting as a means to demonstrate their performance back to their brand clients. And that’s another area where I’m super bullish on and hope we can expand that segment of our business. Most of the business right now is brand operators, and it’s really neat. I think we have certain brand operator clients that are quite sophisticated marketers and they’re using some of the same tools that we are, but the fact that we’re… in this benchmarking capability.

Whereas, if they’re looking at a given tool, they can see what their own performance is and perhaps a couple other select brands to compare against, but we’re going to show them their performance against the industry at large. And so, those are sophisticated folks and they really just use our reporting. On the other hand, we work with some other less-sophisticated operators and they come to us for strategic guidance alongside of the reporting. So we help them develop strategy based on the data-backed intel that we can present to them.

Ed Keating:

Yeah, makes sense. And to speak from a Cannabiz Media standpoint, would be the first one to say there’s a lot of power in aggregation, because that’s what we do. I mean, we go to all the states, we get as much information as we can. We add to it, et cetera, so that somebody can get a perspective that they’re not going to get on their own, unless they choose to go visit 150 regulators every month, and month after month after month, and we haven’t found anybody who wants to do that. So that’s a good thing. 

Now, any challenges that Pioneer is contending with or things that are making you scratch your head or keep you up at night?

Ben Walters:

I mean, shortening the sales cycle, but that probably the same with everybody who’s watching… podcast. Our industry right now is obviously faced with a lot of challenges and capital is not as loose and easy as it once was. And so, finding the right people where we can really demonstrate that we can drive effective value and moving from that nice to have to need to have is a challenge that I’m still trying to crack every single day.

Ed Keating:

Yeah, excellent. No. Great point. And then, finally, the question we always like to ask, looking forward, what trends are you keeping tabs on? What should we be looking for if we’re interested in understanding what’s going on in this brand space that you’ve already got your finger on the pulse?

Ben Walters:

Yeah. I mean, from the brand space, starting from a marketing space, I do think it will be interesting, as you talk about benchmarking marketing performance around web activities, we are moving to, eventually, we’ll be in a cookie-free world and that will have implications, significant in how you measure different metrics that factor into what Pioneer is doing today. 

And then from the brand space, yeah, I think it’s going to be really interesting. There were some quality brands that came out of the West that were doing a lot of things right very early. Without going down the rabbit hole of investor and sort of valuations, but maybe that market hasn’t developed as quickly as they want, and then trying to figure out what their strategies are to take those brands and help them expand into new markets. I think that will be a really interesting story.

More significantly, though, is I think, whereas, our industry has been very West Coast and Western states focused, there are real brands that are being developed in newer, less-mature markets that are coming and they’re probably learning from, hopefully some of the stuff that maybe Pioneer is sharing with them, but learning from the development that’s happened before them. So there are real players in Massachusetts and in Michigan, and in a handful of other newer markets that are going to be real brands five years from now. And I imagine we’ll have some presence back in the more mature markets on the West Coast.

Ed Keating:

Yeah, absolutely. No, you bring up an interesting point. One of the things that we’ve been doing with our products, and I think you do the same, is coming up with the leader board, who’s leading, and people love to see that and compare. And the longer you build out your data, the richer that gets, and the more fundamentally insights you can provide, because it’s really built on a stable foundation. So, I think it’s very exciting what you guys are doing, and thanks for joining us today, Ben. I learned a lot and I’m sure our listeners did, too.

Ben Walters:

Awesome. Thank you, Ed. I had a good time being with you.