Online retail marketing in Canada

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Like much of the Canadian online retail market, the landscape of online marketing looks very familiar.

 

Internet and device penetration is significant, online and browsing behaviour is fairly typical of a developed market, and the available platforms are much the same as elsewhere.

 

That said, don’t let that familiarity desensitise you to the nuances. Retailers should be aware of the subtle but significant differences between the Canadian and the UK markets.

 

This article looks at use of marketing methods for online retailers in Canada.

 

Key Points

  • Canada has very strict anti-spam laws under the CASL code. The Canadian authorities are quite prepared to inflict swingeing fines for non-compliance
  • The social network landscape is a familiar one. Facebook dominates. Twitter usage is rather low
  • Familiar online marketing approaches work in Canada
  • There is a developed ecosystem of price comparison sites and affiliate networks, which includes some probably familiar names such as TradeDoubler
  • The search landscape will be very familiar to European retailers: Google dominates, with Bing an extremely distant second
  • PPC / SEM costs can be expected to be slightly, but not hugely, cheaper than back home. Given the rapid development of online retailing in Canada, this might well change rapidly

Social media

 

In Canada, social media has an 82% average penetration rate, with active social media users spending an average 2 hours and 19 minutes on social sites daily (source: We Are Social: Global Digital Statistics, 2014).

 

Unsurprisingly, Facebook tops the charts when it comes to usage.

Canadian Social Media Usage

Figure 1: Canadian social media usage in previous month (Forum Research, 2015 (except Instagram data point from previous source.

Facebook users visit about nine times per week, French speakers are actually slightly more enthusiastic users than average (65% vs 59%), and mothers the most enthusiastic demographic of all (70%). The overall user profile is, as might be expected, skewed towards the young.

Canadian Facebook User Demographics

Figure 2: Canadian Facebook User Demographics (Source: Forum Research, 2015)

Note the relatively low Twitter penetration, whose users visit about five times per week on average, and the fact that its usage has stayed pretty much constant over the last three years while satisfaction with it has been falling. However, it’s an effective channel to reach young men on: around 56% of users are male (Source: Forum Research, 2015).

 

Email

 

The Canadian Anti-Spam Law (see Canadian government guidance1 on CASL) is one of the most stringent such regimes in the world. It demands consent, as you might expect, but also goes further and makes a clear distinction between explicit and implicit consent. You must record which applies to each customer record you have captured.

 

The law applies to businesses inside and outside of Canada; its aim is that all Canadian citizens are protected from spam by both domestic and foreign businesses. When it was first implemented in July 2014, many email marketing companies saw 50% of their database effectively rendered useless.

 

The law also stipulates that a simple unsubscribe process must exist and those who choose to unsubscribe should be unsubscribed and removed from the system ‘without delay’ i.e. with no real period of grace (Source: Exact Cloud: email marketing and Canada’s anti-spam law).

 

The Anti-Spam Law is a federal act with numerous regulatory bodies able and willing to impose fines on those deemed to be in breach of the regulations. For example, media company Rogers Media Inc. was recently fined CA$200,000 merely for failing to comply with unsubscribe rules (Source: Direct marketing association of Canada).

 

Nevertheless, well-managed email is a highly effective direct online marketing tool in Canada.

Canadian Reported Sales Return

Figure 3: Reported sales return multiplier per CA$ spent (Source: Direct Marketing Association of Canada)

SMS

 

A survey from 2012 (Canada Post, Online Shoppers & Buyers, 2012) suggested that 18% of consumers were receiving promotional texts on a regular basis, and 41% were inclined to always or usually open them.

 

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However, consumers in the same survey were not overly keen on receiving such messages. Only 1% of respondents to the same survey stated that their preferred form of communication was via text messages.

 

The 2014 implementation of CASL significantly impacted the SMS-marketing industry, with various estimates of between 20% and 65% reductions in the size of properly qualified databases (source: ATS Mobile, July 2014).

 

Price comparison sites

 

The top Canadian price comparison sites2 by visitor numbers are Shopbot.ca, Shoptolt.ca, Nextag.ca, PriceGrabber.ca, PriceBat.ca, Bizrate.ca, Comparator.ca and PriceFinder.ca. Each site varies slightly in what it offers in terms of comparison, with PriceGrabber, PriceBat and PriceFinder focusing predominantly on consumer electronics while the others have a broader variety of categories for comparison.

 

Affiliate marketing networks

 

Top CPA affiliate networks active in Canada include: MaxBounty (which is based in Canada), PeerFly, ClickBooth, NeverBlue and CPAWay. Top CPS affiliate networks active in Canada include: Amazon (no surprise there), Linkshare, Commission junction, Tradedoubler, Clickbank, and Share-a-Sale.

 

These are by no means exhaustive lists.

 

Display advertising

Format

 

It’s worth remembering the statistics presented earlier, showing Canadians as highly enthusiastic users of the internet for entertainment purposes, and especially for watching video (1,476 minutes per viewer average in Q4 2014).

 

This isn’t fully reflected in creative formats (NB this data is from 2014 before Google started obstructing Flash). Over 29 billion retail display adverts were served to Canadian customers in 2014, second only to those for financial services (35 billion).

Display ad formats used in Canada

Figure 4: Display ad formats used in Canada 2014 (Comscore: Canada Digital Future in Focus 2015)

Placement

 

To support adapting an existing domestic preferred placement strategy to the Canadian market, here are the device shares of times for key online activities in Canada. Note that retail still takes place on desktop to a greater extent than in many other developed markets, although doubtless this will change.

Device share of Time on Selected Activities in Canada

Figure 5: Device share of time on selected online activities (ComsScore: Canada Digital Future in Focus 2015)

Search

 

Search engines

 

As with so many other aspects of planning online retail into Canada, you will find yourself in familiar territory here: Canada is a Google-dominated country.

Search Engine Share in Canada

Figure 6: Search engine share comparisons

In fact Canada is especially similar to the UK in profile, with significantly less usage of Bing than is seen in the US. Other search engines have less than 4% share in total.

 

SEM/PPC – relative costs

 

You might be pleasantly surprised, but not wildly thrilled, by the relative cost of SEM / PPC in Canada compared to your domestic market. It’s certainly cheaper than the US, and generally somewhat cheaper than the UK.

SEM PPC costs in Canada

Figure 7: SEM / PPC costs as a % of UK level (source: Research by Redsock.biz for eCommerce Worldwide & IMRG)

 

(These figures should be regarded as for planning guidance only – it’s obviously going to vary a lot depending on the specific nature of your business.)

For more information on the Canadian eCommerce Market, download the FREE Canada Country Guide.

 

References:

 

1 - Canada's Anti-Spam Legislation
2 - HowToSaveMoney.ca

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