The Canadian dollar is on equal footing with the U.S. dollar, and trends suggest it will stay that way for a while. Now is the time for marketers to tap into Canadians’ new-found spending power.

Just four years ago, the Canadian dollar was worth 62 to 64 cents of the U.S. dollar. That means “there’s a lot of pent-up demand for U.S. goods and services,” says Murray Owen, VP Marketing, Metamend Software and Design Ltd., a marketing agency in Victoria, British Columbia.

“The economy is strong and Canadians feel comfortable buying luxury items, whereas there’s been a real pullback in the U.S.,” says Chris Breikss, President, 6S Marketing, Vancouver.

Vacations, electronics, cars and real estate, for example, are hot items for Canadian consumers. And online sales are rising. A recent Statistics Canada report said last year that online sales increased at a double-digit pace for the sixth consecutive year. And total Internet sales hit $62.7 billion in 2007 – up 26% in a year.

Canada’s underserved online advertising, pay-per-click and direct-mail markets offer another compelling reason to market to Canadians. Underserved means better rates, in most cases. Of course, marketing in another country means tailoring your creative, a process that can require some additional expense.

Customization is the best way to reach Canadian consumers, according to Canadian marketers. Breikss recommends that U.S. marketers create a separate keyword list, separate ad copy, separate landing pages, and a separate website just for Canadians.

“I think that Canadians like to be recognized and acknowledged … they like to feel like they are not being lumped in with Americans,” he says. “If you let a Canadian know you are Canadian-friendly, they are more likely to buy from you.”

3 Challenges to Marketing to Canadians
You will have to deal with some major challenges that will make it a bit tougher to market in Canada. Here are three main ones:

-> Challenge #1. Physical distance between buyer and seller

The three biggest turnoffs for Canadian online shoppers are shipping, duty and custom costs. Carolyn Gardner, Director of Customer Experience, Sitebrand, estimates that about 60% of Canadians put items in a virtual shopping cart, which they abandon without buying.

The most common scenario is one when a shopper abandons the cart during the checkout step because they don’t find out the total cost of the purchase until then.

One solution is to create a Web personalization campaign. Add geotargeting to your website so that it detects where a Web visitor is coming from. That way you can create content specifically for the visitor from Canada. Only Canadians will see it. The personalization then allows you to change the online experience in real time based on a visitor’s behavior or interest.

Kiyonna, a plus-size women’s apparel company, does this by having a banner ad pop up with a “free shipping” offer as soon as a prospect leaves the checkout process. “That will often save the sell,” Gardner says. “It’s like having a virtual sales assistant on a website.”

Because shipping is such a pain point for Canadians interested in buying U.S. products online, free shipping makes the purchase much more appealing. If you don’t want to go to that trouble, Gardner says, keep shipping prices reasonable. Also, offer a wide selection and an easy return policy.

In addition, it’s important to tell Canadian shoppers upfront what the total cost of purchase will be including shipping, duty and customs fees. Don’t make them fill out all the shipping data before showing them the cost.

-> Challenge #2. Language and cultural differences

In the province of Quebec, 95% of the population speak the official language -- French. It’s no surprise, therefore, that French Canadians want to be marketed to in French.
Motivated by political and historical reasons, Quebec’s citizens have contemplated separating from Canada so that Quebec could become its own country. Quebec’s nationalism should not be overlooked; it has been recognized symbolically as a separate nation within Canada by the government.
“That’s still very much an undercurrent,” Owen says. “There is a different psychology. Quebecers want to be treated as separate from their English counterparts.”

o Anticipate language differences
To avoid simple spelling mistakes in your copy, set your Windows or Microsoft Vista operating system to Canadian English. It will catch the subtle differences in spelling, such as “cheque” versus “check.”

Translate your creative into French or, at the very least, provide a “Français” link somewhere in the copy, so that site visitors could see the translated page for emails, landing pages, websites, etc.

o Segment email blasts
In email campaigns, especially, segmenting by language is a good idea. French Canadians generally don’t receive many French language email campaigns, says Gardner. This opportunity to serve an underserved market shouldn’t be wasted.

Translation services have been around for a while. Applying them to the Web is no different from applying them to print and broadcast media.

“It’s a hassle,” says Gardner. “But for the company that takes the time to translate and segment by language, they will always get a better rate, a better response.”

o Ask yourself if the investment is worth it
Remember that only about one-third (7.73 million) of Canada’s population speaks French (May 2008). The key question is – do we have a strong segment here?

Companies will need to decide that for themselves. To illustrate the big picture, take the populations of Canada’s 10 provinces and three territories into account for your marketing campaigns. The top four provinces in population account for 86% of all Canadians and all the major cities, including Toronto, Montreal, Vancouver, Ottawa, and Quebec City. Most Canadians live near the U.S. border. Here is a breakdown:

1) Ontario - 12.9 million (38.8%)
2) Quebec - 7.7 million (23.3%)
3) British Columbia - 4.4 million (13.3%)
4) Alberta - 3.5 million (10.5%)

Appealing to Canadian culture

A. Consider behavioral differences

We realize the following are stereotypes; however, there is truth in these statements. If your goal is to appeal to the general population, you will find these observations useful. Keep in mind that Canadians are:

0 More conservative. This means that, on the average, they respond better to softer-sell strategies.
0 Less trustful. Since they are less likely to give away their email address, relevancy and careful targeting is a key to marketing to them.
0 Savvy shoppers – Canadians’ accessibility to high-speed Internet is among the highest in the world, and they spend more time online than Americans do. It’s not unheard of for someone to spend four hours searching online to save $5 on an item, Breikss says. This isn’t a bad thing, though, especially if you offer them customer reviews, a blog or a video they can scan before making a purchase.

B. Personalize your marketing

Canadians have their pain points. Taxes, shipping, and long, cold winters are three of them. If you can appeal to those issues, you could reap great rewards. Here are three promotions designed with a Canadian sensibility in mind:

-> Promotion #1. Tax savings

Canadians are heavily taxed. Just about everything they purchase is subject to a Goods and Service Tax of 5%, which is applied after duties and shipping. In addition, Canadians are charged provincial sales taxes.

Highlighting a tax savings in your promotion can grab a lot of attention, says Owen. Canadians are likely to respond, for example, if you promote that you are reducing the cost of an item by the amount they are taxed.

-> Promotion #2. Free shipping

Try a “free shipping to Canada” promotion. If you’re an ecommerce site especially, your profit margins are a bit better than the brick-and-mortar stores. Free shipping could be the way to go.

-> Promotion #3. Vacation packages

Tourism is the largest ecommerce vertical in Canada, especially because of the country’s long winters. Providing vacation packages to warmer places for the Canadian market during the winter can be a definite niche market.

-> More Canadian elements to use to your advantage:

0 Canadians have a love affair with hockey. Major brands, including Ford, have incorporated Canadian hockey legends, such as Wayne Gretzky into commercials with great success, Owen says.

0 Canada is a country of extreme seasons – short, beautiful summers and long, sometimes harsh, winters. Note the seasonal differences. For example, while spring break is a great time to market swimwear in the U.S., it is probably a bit too early for the Canadian market.

0 Canadians have a different holiday schedule. Their Thanksgiving, for instance, is six weeks before the U.S. Thanksgiving. They also celebrate Victoria Day, Canada Day, and Boxing Day. That’s why it makes sense to purchase a Canadian calendar;you can customize promotions to the country’s holidays.

-> Challenge #3. Creating a Canadian presence

A. Show Canadians that you take their market seriously and you want to do all you can to appeal to them:

1. Create a Canadian website and/or blog. If you want to take it a step further, set up a Canadian office or purchase a warehouse in Canada.

2. Have a Canadian address and phone number to complement your online presence. Even though the investment costs more, it fosters loyalty with the Canadian consumer and creates positive ROI in the long run. Keep in mind that calling a local number is more convenient and less expensive for Canadians. So, register a Canadian phone number and route it to the company’s 1-800 number. You don’t need a physical presence in the country to do this.

3. Build a “.ca” domain website in English and in French. If you are marketing a product that is universally cherished in Canada (e.g., a hockey stick), you definitely need to do this.

4. Register your “.ca” domain with a Canadian company to improve SEO. Since Google recognizes where the servers are based, it’s definitely to your advantage if yours are physically located in Canada.

B. Keep in mind that most Canadians have broadband:

1. Test your rich media and video campaigns in Canada. Because 77% of Canadians are high-speed Internet users, according to IAB Canada, they learn behaviors very quickly. For video, for example, Canada leads the world in terms of minutes viewed per month online, says Paula Gignac, President of IAB Canada. This is why Canada is a good place to test rich-media campaigns.

2: Host videos or create a video ads placed inside Canadian content to target locations close to the border. That would go over great. Take tourism destinations near the border cities of Canada, for instance. You could create a video ad featuring activities at your locale.

Rules and Regulations: 3 Survival Tips
Canada’s PIPEDA (Personal Information Protection and Electronic Documents Act) laws are similar to CAN-SPAM in the U.S. Here are some differences:

-> Tip #1. Be aware of new terms and conditions

IAB Canada recently created Standard Terms and Conditions and Late Creative Policy for Internet Advertising for Media Buys of One Year or Less. As in the US, ad creative must be in three business days prior to campaign launch; for video or rich media creative, it’s five business days.

The difference in Canada: if your creative isn’t in on time, and you don’t have your own stand-in creative to submit, the online publisher will run an IAB Canada-approved Public Service Announcement in its place. Go to IAB Canada’s site or sign up for its newsletter to stay updated.

-> Tip #2. Beware of the consequences of not complying with PIPEDA

Make yourself familiar with PIPEDA’s regulations, including its recommendations for email marketing and adhering to privacy issues. “The thing that’s so powerful about PIPEDA is its public documentation of cases … so if you do something wrong, the consumer can complain, and your case will be put on the website for all to view,” Gignac says. “There really is no penalty other than the public exposure and, believe me, that’s quite enough.”

-> Tip #3. Match creative to Canadian publisher expectations

There’s really only one key to keep in mind when thinking about compliance in Canada: Develop creative according to the standards, and you’ll have a wonderful experience, says Gignac.

You can’t, for example, expect Canadian publishers to accept file sizes that are larger than those the IAB allows. It might be acceptable in the U.S. because the market is bigger. Marketers play one publisher against another. But the Canadian market is much smaller, so those things don’t fly.

In fact, many of the big publishers are located in downtown Toronto, Canada’s largest city. They work closely with the IAB’s Ad Opt committee, which makes the prospect of playing one against the other even more unlikely, Gignac says.

Useful links related to this article

Creative Samples of Canadian-specific Online Banner Ads that Kiyonna used in its geotargeting campaign:
http://www.marketingsherpa.com/cs/kiyonna/study.html

Past MarketingSherpa articles:

SPECIAL REPORT: How to Market to Canadians Online – Advice, Data, Legal Info and Useful Hotlinks
http://www.marketingsherpa.com/article.html?ident=27474

How to Grow Your List to 2 Million Opt-Ins -- and Which Tactics Give You Higher Quality Names,” a case study about Bell Canada:
http://www.marketingsherpa.com/article.html?ident=24182#

How to Use Geotargeting to Find Your Best Customers - 5 Strategies & Pitfalls to Avoid:
http://www.marketingsherpa.com/article.html?ident=30135

Other links:

Statistics Canada, ecommerce report:
http://www.statcan.ca/Daily/English/080424/d080424a.htm

IAB Canada’s Standard Terms and Conditions and Late Creative Policy:
http://www.iabcanada.com/standards/terms_and_conditions
shtml

WeNetShip, import/export services:
http://www.wenetship.com/index.html

ZipLocal, Canadian portal:
http://www.ziplocal.com/

Vancouver.com, Canadian portal:
http://www.vancouver.com/

Canada Post:
http://www.canadapost.com/

Canada Post’s GeoPost Plus:
http://www.canadapost.ca/business/offerings/geopost_plu
/can/default-e.asp

ICOM Information & Communications:
http://www.i-com.com/default.asp

Kiyonna, plus-size women’s apparel company with geotargeted ad campaign:
http://www.kiyonna.com/plus-size-clothing.htm

Google.ca:
http://www.google.ca/

The Globe and Mail:
http://www.TheGlobeandMail.com/

Yahoo! Canada:
http://ca.yahoo.com/

YellowPages.ca:
http://www.yellowpages.ca/

Canadian Marketing Association:
http://www.the-cma.org/

6S Marketing:
http://www.6smarketing.com/

Sitebrand:
http://www.sitebrand.com/

Metamend, SEO marketing firm:
http://www.metamend.com/