prepared for: honda canada digital marketing...
TRANSCRIPT
Proposal to Increase Car Sales Through Online Chinese Ad Optimization in Vancouver
(2016)
Prepared for: Honda Canada – Digital Marketing Team
By:
YeJi An, UBC Undergraduate Student
November 30th, 2016
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Table of Contents
Abstract……………………………………………………………………………………………3
1. Introduction……………………………………………………………………………………4
1.1 Overview…………………………………………………………………………………..4
1.2 Background………………………………………………………………………………..4
1.3 Statement of Problem…………………………………………...…………………………5
1.4 Purpose and Significance of Study………………………..………………………………5
1.5 Study Limitations……………………………………………….…………………………5
2. Scope………………………………………...……………………………………...…………6
3. Proposed Plan……………………………………………….…………………………………6
3.1 Purpose…………………………………………….………………………………………6
3.2 Methods……………………………………………………………………………………6
3.3 Costs………………………………………………….……………………………………7
3.4 Feasibility…………………………………….……………………………………………7
4. Research……………………………………………….………………………………………7
4.1 Data………………………………………………………..………………………………7
4.2 Findings ………………………………………………..……………………………...…10
4.3 Interpretation…………………………………………………………………..…………10
5. Conclusion……………………………………………………….……………………..……11
5.1 Summary of Findings……………………………..……………………………………...11
5.2 Recommendations……………………………………………………………………..…11
Appendix A………………………………………………………………………………………13
Bibliography………………………………………………………………………………..……14
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Abstract
As digital automotive advertising increasingly becomes more competitive, marketing costs
continue to grow. This proposal sets to determine the feasibility of increasing Honda Canada’s
profit through displaying Chinese language ads in Vancouver. Targeting advertisements to the
large Chinese demographic will result in higher profits for Honda Canada; the revenue from car
sales to the Chinese will increase, and the cost of advertising will decrease. This proposal contains
primary and secondary research investigating the current demand for digital Chinese automotive
ads in Vancouver. The primary research includes data findings of 10 relevant survey questions
answered by 46 Chinese-Canadian participants currently residing in Vancouver. The interpretation
of the data shows that there is a demand for Chinese language online advertisement. A case study
from OpenRoad, and current trends in the automotive digital marketing field support the primary
survey data. The return on investment from optimized Chinese language digital ads in Vancouver
is predicted to be much greater than the initial costs. Hence, this proposal presents a feasible
solution for increasing profit in a competitive market.
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1. Introduction
1.1 Overview
Honda Canada currently does not have a separate digital marketing campaign for Chinese
automotive shoppers in Greater Vancouver. This proposal aims to determine the feasibility and
impact of creating separate Chinese digital campaigns with the aim to increase Honda’s car sales
in this demographic. The findings of this proposal are drawn from interpreted data collected from
Chinese residents (and Chinese-descent Canadian citizens) of Vancouver. The impact of the
findings will depend on the magnitude of each optimized digital campaign. The significance of
this proposal is the profit-increasing effect the result will have for Honda Canada, which is
achieved through tailoring advertisement to the Chinese-Canadian market.
1.2 Background
Honda Canada provides national marketing incentives and guidelines for all local Honda
dealerships. Honda dealerships spend on average 1 to 2% of total annual revenue on marketing
costs alone (Austin). Marketing expenditures are constantly increasing as all dealerships look to
stay competitive in the automotive industry. Within these marketing costs, digital advertising
methods are becoming progressively popular as the demand for traditional advertising methods
continue to shrink.
However, Honda has yet to specialize its digital marketing focuses on specific demographics that
make up a large part of the population, such as the Chinese. The current Chinese-speaking
(Mandarin, Cantonese, “not otherwise specified”) people in Metro Vancouver consists of almost
30% of the total population (“Census”). Although the spoken dialect of Chinese greatly varies, the
written format is mostly the same. A digital campaign written in traditional Chinese will be
effectively communicated to all Chinese users. Most Mandarin speakers are able to read traditional
Chinese, and 2/3 of the Chinese-speaking population in Vancouver communicate with traditional
characters (“Census”). From 107,450 immigrants to British Columbia in 2001, to 167,535 in 2011,
the number of Chinese immigrants into Canada has increased 58.8% within ten years (“Chinese
Immigration to Canada”). The majority of these immigrants to British Columbia reside in the
Greater Vancouver area.
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As there is an increasingly large demand for cars amongst these immigrants, optimized online
marketing towards the Chinese population will increase revenue, while decreasing costs. Honda’s
goal is to raise profits through specialized advertisements.
1.3 Statement of Problem
Currently, Honda Canada’s marketing strategy are not optimized towards specific groups, such as
the Chinese. This results in dealerships spending more advertising money towards a large part of
the population that may not understand English fluently. Oftentimes, many digital car
advertisements will make claims such as “No Down Payment”, and “0% Financing Until 2017”.
Particular words such as “down payment” and “financing” are difficult to understand, and
therefore does not appeal as strongly to a non-native speaker. This language disconnect leads to
less impactful advertisements, and therefore, decreases the overall profit of online campaigns.
1.4 Purpose and Significance of Study
The purpose of this study is to determine a partial digital marketing solution to increase car sales
through Chinese ads in Vancouver. This is significant as the proposal may lead to greatly increased
revenues if successful, for a minor cost. This proposal is also spearheading, and addressing the
need for radical changes to how digital marketing is performed in a multicultural country, such as
Canada. With today’s online profile, and cookie tracking capabilities, it is very possible to target
distinct groups of people with different language variations of the same creative. This study looks
specifically at possible advantages of targeting automotive digital advertisement to Chinese-
Vancouverites. The feasible outcomes of this proposal will improve the bottom line for Honda
Canada and its dealerships.
1.5 Study Limitations
One limitation in this study is that the survey is conducted in English. Ideally, the study would be
done in both Chinese and English to depict more accurate results. Also, the results include data
from 46 fully completed surveys; this is a very small fraction of the potential available market of
Chinese online digital advertising.
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Another limitation is that this study does not provide an estimation of increased profits. This is
because the profits greatly depend on the creative of the campaign, which differs for each year,
make, and model of car.
2. Scope
The proposed plan and research identifies:
1. The demand for Chinese-specific digital advertisements in Vancouver
2. Which online platforms can best reach targeted Chinese ads
3. Challenges of advertising in Chinese in Vancouver
4. Additional optimization steps Honda can take to fully target the correct in-market
automotive shopper on various digital platforms
3. Proposed Plan
This proposed plan determines probable factors that hinders the current use of multi-language
digital car ads. The plan provides ideas that are feasible to implement in the current Vancouver
automotive market.
3.1 Purpose
The purpose of this proposal is to increase profits for Honda Canada through reduction in digital
marketing advertisement costs. This proposal seeks to increase the impact of Honda’s marketing
dollars through displaying more relevant ads to certain prominent groups in the Vancouver
community, such as the Chinese. It also seeks to determine the feasibility of this task.
3.2 Methods
The primary data source for this proposal is through conducted survey questions (see Appendix A
for a list of the questions). This survey was distributed online and on paper to residents in
Vancouver who spoke any dialect of Chinese (mainly Mandarin, Cantonese, and Taiwanese). For
secondary resources on the feasibility of this proposal, articles and case studies on the current trend
of digital marketing are used.
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3.3 Costs
The costs for this proposal are relatively low. Each campaign will have to be translated, but there
is no initial heavy investment. If Honda Canada launches a national translated campaign, there will
be no additional costs to individual dealerships. If Honda dealerships in Vancouver decide to
launch individual campaigns in Chinese, the costs will still be small as the same creative can be
used with Chinese translations. A possibility to consider is to provide website landing pages in
Chinese, but this requires a greater cost. As most Vancouver dealerships have Chinese-speaking
sales associates to accommodate potential Chinese buyers, this will not be a separate cost.
3.4 Feasibility
The issue of advertising in Chinese to the correct audience is definitely doable. It requires extra
effort as each online campaign will have to be translated into Chinese characters. When initially
setting up the campaigns, the Chinese campaigns will have to be separated from the English on
each platform used. This will ensure that the key performance indicators are recorded to measure
out the proper return on investments for each language campaign. Once the demand for online
Chinese ads are determined, the feasibility of posting translated versions of the creatives should
not pose difficulty.
4. Research
4.1 Data
This data is from the survey that was conducted both online and in-person. Every person who took
this survey is a Chinese, or Chinese-descent resident in Vancouver. There were a total of 46
completed surveys. Below are compilations of the data collected.
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Figure 1. The language that is most fluently spoken by the residents versus the language that the
salesperson has spoken to them in.
Cities North Vancouver Downtown Vancouver Richmond Burnaby Surrey
# of
Residents:
4 / 9 18 9 /
Cities New Westminster Coquitlam Surrey Langley Surrey Other
# of
Residents:
/ 4 / 2 / /
Table 1. Where the residents have purchased their cars. Total of 46 replies.
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Figure 2. Online sites most visited. Residents selected all that applied, and each site is a percentage
of total number of Chinese residents surveyed.
Figure 3. Online sources most used before purchasing a vehicle. Residents selected all that applied,
and each source is a percentage of total number of Chinese resident surveyed.
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4.2 Findings
As shown in Figure 1, there is a disparity in languages of the resident’s most fluent language, and
the language that they are sold the car in. Of the 46 Chinese Vancouver residents who have taken
this survey, 83% of the participants have stated that they were most fluent in a language other than
English. However, only 48% of the residents were sold cars by people speaking in the customer’s
preferred language.
As shown in Table 1, the areas of Vancouver where people purchase their cars greatly varies.
However, Richmond is the most popular amongst the Chinese-descent residents, followed by
Vancouver and Burnaby.
Figure 2 shows that a variety of Chinese and English sites are used by Chinese-Vancouver
residents. Other than Google, the leading sites are YouTube and Facebook, followed by the popular
Chinese search engine: Baidu. In correlations with Figure 2, Figure 3 shows people use general
internet search to research the cars that they want to buy before walking into the dealership.
General internet search closely follows the dealership websites when researching cars. This is also
supported by the general trend of customers researching the car make, and dealerships they want
to buy from before stepping into a dealership (LeBeau).
A case study that has also been done previously comes from a dealer group: OpenRoad. The
OpenRoad group’s headquarters is located in Richmond BC, and they currently have 19
dealerships including OpenRoad Honda (“Open Road Car Dealerships”). According to previous
president Christian Chia, 70% of all customers from the OpenRoad client database were Chinese
Canadians (Lazarus). Chia also claims that Asian marketing is cost-effective, and only takes a 25%
hit on the budget, even if the Asian demographic accounts for more than 50% of all impressions
for OpenRoad marketing (Lazarus). The cost effectiveness of OpenRoad’s targeted marketing can
be credited to its optimized advertising towards Chinese customers.
4.3 Interpretation
In conjunction with the findings, and data from the Census, it is evident that there is a strong
demand from Chinese residents for Chinese online ads. The majority of residents speak Chinese,
and the trend indicates that there will be a continual increase of Chinese residents into Vancouver
(“Chinese Immigrants to Canada”).
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The survey data on most often visited online sites presents a number of opportunities that Honda
can use to run its Chinese campaigns. In addition to Google Adwords, and Facebook Business
Manager, Honda should take Baidu Advertising into consideration. To further target a larger cohort
of the population, Honda also should consider popular Chinese news sites (including Vancouver
Chinese news outlets: Ming Pao Daily and Sing Tao). With today’s cookie tracking capabilities, it
is easy to retarget those who have visited the dealership site on various advertisement platforms.
The greatest challenges in advertising in Chinese in Vancouver is that it is a progressive measure.
Although individual dealer groups such as OpenRoad have taken measures to advertise towards
Chinese-Canadians, original equipment manufacturers (OEMs) have not taken such a step.
However, with a targeted advertisement to in-market Chinese shoppers, the costs will be decreased.
There is also clear suggestion of Chinese sites that Honda Canada can take into consideration when
launching its campaigns.
5. Conclusion
5.1 Summary of Findings
It is evident from the findings that there is a demand amongst Chinese residents in Vancouver for
cars. As there is also a growing trend of potential customers researching online when deciding on
a car brand to purchase, this presents a great opportunity for Honda Canada to launch Chinese
campaigns. The costs of these campaigns are not very high compared to its English counterparts.
Although there is a large variety of sites that Honda can advertise in Chinese, the findings show
that there are favourites amongst the choices. Through careful optimization of these ads to in-
market audiences, Honda will see an increase in ROI. Targeting digital advertisement towards the
Chinese population in Vancouver will increase Honda’s profit through a decrease in marketing
costs, and an increase in car sales.
5.2 Recommendations
It is important to acknowledge a community that makes up a large part of the population. With an
easy change, such as translating words into Chinese characters on current English creatives, Honda
can efficiently advertise to the Chinese members of the population. Most popular sites such as
Google, YouTube, Facebook, Baidu, Sohu.com, and Vancouver Chinese news sites are suggested
when first launching Chinese campaigns, as they provide wide access to a multitude of Chinese
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Canadians. Also, targeting in-market shoppers with keywords, and fully optimizing Honda’s brand
identity will produce the best results for these new ads. There are a few challenges of implementing
online Chinese digital ads such as having to set up new campaigns, translating text, and providing
appropriate website landing pages. However, the benefits of increased revenue, and stronger
customer service will outweigh the initial cost. Overall, Honda will see an increase in profits as
digital advertisements are targeted towards Chinese residents in Vancouver.
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Appendix A
Survey Questions Used:
1. In what language do you speak most fluently?
2. Where in Vancouver has your family purchased a car?
3. In what language did the sales person speak when selling your family the car?
4. How likely are you to buy an automobile in the next 12 months?
5. How likely are you to buy an automobile because of an advertisement you saw online?
6. Which online sites do you most often visit?
7. What language setting is your browser in?
8. Which of the following online sources do you plan to use when researching your next
automobile purchase?
9. How much more likely would you be to buy a car after seeing online ads in Chinese?
10. What are suggestions you have on how online advertising towards Chinese-Canadians in
Vancouver can improve in the future? (Optional)
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Bibliography
Austin, D. “Dealership Marketing Spend: Too Much or Not Enough?” Digital Dealer. N.p., 09
July 2015. Web. 06 Oct. 2016.
“Census Profile.” Census Profile. Statistics Canada, 31 May 2016. Web. 07 Oct. 2016.
"Chinese Immigrants to Canada." The Canadian Magazine of Immigration. N.p., 31 Mar. 2016.
Web. 18 Nov. 2016.
Lazarus August 28, 2006, Eve. "Vancouver’s Driving Force." Marketing Magazine. N.p., 28
Aug. 2006. Web. 18 Nov. 2016.
LeBeau, Phil. "Americans Rethinking How They Buy Cars." CNBC. CNBC, 26 Feb. 2014. Web.
18 Nov. 2016.
"OpenRoad Car Dealerships." OpenRoad Car Dealerships, BC, Canada. N.p., n.d. Web. 19 Nov.
2016.