CanaFarma intends to utilize a full suite of low risk, high reward marketing strategies to promote customer awareness, engagement and loyalty to its products. CanaFarma’s primary marketing engine will be the utilization of its already contracted proprietary network of affiliate-marketing “influencers” to drive customers to CanaFarma’s various online purchase points. This marketing model involves paying a relatively small percentage commission primarily for actual paid sales by referred customers,reducing risk and resulting in higher bottom lines. CanaFarma believes that a reliable reference source such as its planned marketplace website, with its objective lab results and reviews from only confirmed customers will have several effects on the overall CBD market.
The industry is full of sham products that have very little active cannabinoid ingredients or a host of other poor-quality characteristics such as impurities. A better educated CBD consumer is not as susceptible to suspect claims from sham brands. Due to the many ailments and disorders for which CBD has been employed to provide therapeutic benefit, CanaFarma believes that there will be no such thing as a “single best hemp oil” but rather some hemp oils will be the top relief provider for specific ailments and disorders.
The company plans a Low Risk, High-Reward Comprehensive Marketing Strategy unlike many other CBD companies who engage in high cost, risky marketing campaigns to promote their brands or pay high “paid-search” or Amazon listing and fulfillment fees, CanaFarma expects to primarily market its products through affiliate marketing campaigns that only pay a very small commission for high quality traffic and slightly higher rates for actual paid sales by referred customers, thereby substantially reducing risk and resulting in higher bottom lines. Various members of CanaFarma’s management team have successful track records of achieving high gross revenue returns on each marketing dollar spent for other nutritional supplements.
CanaFarma expects to utilize various methods of Direct-To-Consumer marketing. However, the primary focus of the initial marketing strategy will be “Affiliate Marketing” to drive consumer web-based traffic to various Ecommerce sites and landing pages where CanaFarma’s products are featured and can be purchased. The primary reason for this focus is that affiliate marketing uses a “pay for performance” model, meaning that the merchant.
(a) incurs minimal marketing expense for high quality traffic, which can itself be easily shut-off if it does not result in attractive conversion rates.
(b) can custom-tailor slightly higher payouts that would only get paid based on the volume of actual paid orders.
There are several payout models used by affiliate networks including the two primary models: Cost Per Sale, and Cost Per Action. CPS, also referred to as PPS (Pay Per Sale), is a low risk, high profit, revenue sharing model used by marketers to attract an unlimited number of new customers to their product or service. Cost-Per-Sale pays a set commission to the affiliate marketer who refers a lead that results in an actual purchase.
Merchants are drawn to the CPS model since they only pay a commission after they get an actual paid order by the purchasing customer. In essence, it’s free marketing and advertising since the affiliate refers the paying customer without any up-front cost to the merchant.
Generally, CPS will have higher commission rates than CPA. CPA marketing programs pay affiliates when a specific action is taken by the referral or lead. Common actions include clicks, impressions, form submits, sign-ups, registrations, or opt-ins. Since Cost-Per-Action models don’t necessarily involve a direct sale. However, the Merchant can easily and closely monitor conversion rates to see if such paid actions are profitable and turn them off or adjust when necessary.
The payout percentages are far less than they are in Cost-Per-Sale. Order Flow CanaFarma has already identified several affiliate networks that it expects to utilize. Generally, these have been chosen based on the experience of CanaFarma’s management team and the relevance of these affiliate networks to CanaFarma’s product offering. These networks have been identified as providing quality traffic that results in high sales conversions and extremely healthy subscription program “stick rates”. CanaFarma expects to utilize its management team’s abundant experience in employing a combination of both CPA and CPS marketing programs to maximize returns on each marketing dollar spent.
There are currently no industry-wide standards for categorization. The following types of websites are generic, yet are commonly understood and used by affiliate marketers. Search affiliates that utilize pay-per-click search engines to promote the advertisers’ offers. Loyalty websites, typically characterized by providing a reward or incentive system for purchases via points, miles, cash back Cause related marketing sites that offer charitable donations , coupon and rebate websites that focus on sales promotions , content and niche market websites, including product review sites.
Cost per action networks that highlight offers from the advertiser with which they are affiliated with their own network of affiliates including websites using adbars to display context-sensitive advertising for products on the site using virtual currency that offers advertising views in exchange for a handout of virtual currency in a game or other virtual platform, will also be utilized.
Several members of CanaFarma’s management team have experience in affiliate marketing for other nutritional supplements. Given management’s past experience and success with affiliate marketing, CanaFarma has already identified an attractive list of publisher candidates for its products. CanaFarma expects to launch its products primarily through Affiliate Network Marketing and augment that over time with other marketing and distribution strategies.
* All of the information in this article is taken directly from the December 2019 Prospectus, and edited for simplification.