Sports Sponsorships and Forex Brokers —— Are they Worth it?

Source: Fazzaco 2020-08-28

Through effective marketing methods, many foreign exchange brokers have established a firm foothold in the industry and even developed vigorously. Many of the marketing expenses are contributed to sports sponsorship, which seems to be a reasonable phenomenon. After roughly checking the news about foreign exchange brokers participating in sports sponsorship cooperation, Forex brokers choose many sports projects and sponsorship methods: some provide simple jersey sponsorship or naming services, some use the image of athletes or teams to shoot advertisements or promotional videos, and even more directly become regional Global official partners to maximize cooperation rights. Everyone has taken a fancy to the return on investment of sports sponsorship and is eager for it. However, whether this part of the cost is the right investment for a foreign exchange broker has to be analyzed from multiple angles. Fazzaco got some search results listed below (this is definitely not a complete list):

FXPRIMUS (Manchester Football Team, England);

ETFinance (Spain Real Madrid Basketball Team);

IG (Harlequins, British Rugby League team);

FXPro (Asian Champions League Rugby);

Swiss FX (Mercedes-Benz F1 team);

Olymp Trade (LCR Honda Motorcycle Team);

AlpariFX (Sailing World Tournament);

AFX (Capital Sailing Team);

FXTM (Skydiving legend Valery Rozov)

There are many sports items selected by foreign exchange brokers, and the sponsorship methods are also diverse: some provide simple jersey sponsorship or naming services, some use the image of athletes or teams to shoot advertisements or promotional videos, and even more directly become regional or even Global official partners to maximize cooperation rights. Everyone has taken a fancy to the return on investment of sports sponsorship and is eager for it. However, whether this part of the cost is the right investment for a foreign exchange broker has to be analyzed from multiple angles.

First of all, which sport in the sports world to choose? Which team or which athletes can better serve the purpose of promotion?

As can be seen from the part of the list listed above, the projects sponsored by foreign exchange brokers are diverse and have a trend of diversified development in different sponsored fields. Sports sponsorship has proven to be an effective marketing tool for many companies. In order to increase brand exposure and even build global brand awareness, foreign exchange brokers need to consider the popularity of sports and the audience base.

At present, football sponsorship occupies a dominant position in investment, and it is a stable business for many brokers. Football is the most participated sport in the world. The five major football leagues in Europe alone attract billions of spectators worldwide. With the continuous growth of the number of foreign exchange brokerage companies, building an outstanding brand has become the wish of every foreign exchange broker. Therefore, choosing football as the entry point for sponsorship has two obvious advantages:

1. The status and credibility of football clubs are logically linked to the foreign exchange broker brands with which they have a cooperative relationship in the minds of consumers. This has brought a good effect for brokers who don't have much time to establish a reliable position in the fast-developing and chaotic market. On the one hand, the emerging foreign exchange industry, on the other hand, is a football club with a century-old history. This way of gaining credibility is very efficient.

2. Use of various visible and invisible assets: digital and social media platforms, databases and other advertisements of football clubs.

Whether the club held a press conference or participated in a charity event, along with the image of the team and the players, the image of the brokerage brand appeared together, bringing it to relevant participants, exposure groups and potential investors. In order to create a sense of differentiation, this differentiation will attract customers of more ages in more industries. People may not have heard of your brokerage brand, but the presence of household names such as Coca-Cola and Nike with your name will definitely enhance the brand's status and influence.

Since it is for the purpose of attracting viewers or users, in order to obtain the maximum benefit from this perspective, foreign exchange brokers naturally hope to sign contracts with leading figures or top teams in sports. The foreign exchange online trading platform FBS stated when it signed a four-and-a-half-year global sponsorship agreement with FC Barcelona: “Just like Barcelona strives to become the number one in the league, FBS’s goal is to win global leadership and become a successful online investment player. Synonymous." Apart from the cost factor, if conditions permit to sign a Premier League team, foreign exchange brokers will naturally not choose a Premier League team.

But football is definitely not the only choice. Sometimes foreign exchange brokers need to make different attempts for different types of target markets and customers. LMAX and CMC Markets chose to sponsor sailing events (respectively for the Round the World Yacht Race and Land Rover BAR), and ICM Capital recently became the T-shirt sponsor of the England Polo team, which opened up a unique market for them. Allow them to focus on high-net-worth audiences (customized transactions). Seeking differentiated publicity and tailor-made marketing strategies are full of infinite possibilities in the future, and it is also a good way to break a blood path among many foreign exchange economic brands.

Sponsorship’s rate of return depends on research aimed at the target audience

Just as the football population perfectly matches the online trader population of foreign exchange platforms (males between 20 and 45 years old), the types of audiences covered by foreign exchange and sports (which tend to attract risk appetites) are also relatively consistent. But there is no lack of subtle choices made by market-sensitive brokers: more and more female businessmen are starting to catch up with the trend and enter the foreign exchange industry, and some sponsors have lost a large part of the audience because they only use male sports figures as spokespersons. FxPro took a different approach and sponsored the 7th Monte Carlo International Women's Volleyball Competition, which played a very good role.

The drive by sports rights holders and brands to create geo sponsorships has been led by an increasing demand for alignment to global sports properties, the growing regionalization of rights holder assets (via multi-language websites and social media, the touring of clubs overseas, signing of foreign sports stars) and the development of new technologies.

Being able to align with a global sports property on a regional level offers highly targeted marketing with limited wastage and at a fraction of the cost of a global sponsorship.

Forex brokers can now become the “official Asian partner” of a team or the “official LATAM partner”, and rights can be defined accordingly. The growing sophistication of research has been an important driver in this process.

Rights holders now know exactly what fan bases, TV viewership, and digital/social media presence they have in every market around the world. This can be used to sell regional sponsorships by continent or even down to a country level.

Technology also plays an important role, digital replacement technology is now widely used allowing the replacement of advertising boards that fans see in the stadium with digital billboards that fans see on TV – messages can be now changed for Europe, LATAM, Asia, and MENA.

It is very interesting that there is a strong similarity between the foreign exchange market and the online gambling industry. Forex brokers are more likely to accept those sports sponsorship projects that online betting and poker sites have selected, while F1 racing, golf and other projects that indirectly contain labels such as "high quality" and "high consumption" are the core attraction of foreign exchange transactions ( High yield) has good synergy. Corresponding athletes can be said to be like-minded partners of foreign exchange brokers on the standard of expressing "we have similar values". And these campaigns tend to attract people who are wealthier or want to become richer, which is simply an ideal marketing goal for foreign exchange brokers.

Way of cooperation

Sponsorship is more than just naming and labeling, it's all done with a thumbs up. Now sports sponsorship has evolved to a deeper level of interaction.

Only recently, UFXMarkets, a London-based online trading platform announced its partnership with Mike Tindall, outside center and former Captain for Gloucester Rugby. Tindall, whose reputation as a successful rugby player and individual team coach will go far as a spokesman for UFXMarkets, promoting its image as one of the few online brokers offering its traders customized training and personal one-on-one coaching. In fact, Captain Tindall will be using his own tailored trading strategy, made exclusively for him by UFXMarkets.

Oftentimes, an entire team is used as a firm's PR representative. Last year, Easy-Forex, an Australian Forex broker, ran a competition and offered as its top prize a trip to Sydney to meet the legendary National Rugby League team, the Canterbury Bulldogs at their final home game. Yes, part of the prize was a neat $1 million, but the big attraction was the chance to ‘meet the players.' Interestingly enough, the winner of the prize was a 29 year old business networking student, Shivanand Swami ,from Parbahni in rural India, who never heard of the Bulldogs, never heard of Rugby League and certainly never kicked a football in his life.

Last February, Alpari, another U-based broker, renowned for its sponsorships of the NBA's New York Knicks and New Jersey Nets, signed a multi-year, multi-million dollar partnership to sponsor West Ham United of the English Premier League. To kick off the deal, members of West Ham United visited Alpari's UK trading floor and held a trading competition.

But sports sponsorship is not without its drawbacks. The biggest problem is to cover up the possible risks of foreign exchange investment through whitewashed copywriting, expressing a beautiful appearance of profit to the public.

"Order execution" in the advertisement is compared to a fierce punch in a boxing arena. The smooth trading experience is shown by Ronaldo’s precise shot with a beautiful arc. But what about the packaging behind these packages, if the platform Without the support of trading technology and convenient special service functions, if a trader is not satisfied with the trading platform, trading environment, customer support, etc., he will not stay here just because the broker happens to sponsor his favorite football team platform.

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Sports Sponsorships and Forex Brokers —— Are they Worth it?

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