Welcome back to Marketing Monthly, the imaginatively named, once a month newsletter, where we look at all things broker marketing.
This time we’re looking at sponsorships in emerging markets.
If you watched the Egypt vs Ethiopia game over the weekend then you may have noticed that the side billboards kept switching to show XS.com branding. The same was true of the Morocco vs Niger game.
Sponsoring football teams is not really new but traditionally brokers have gone for bigger teams in Europe. Like gambling companies, the goal is often to reach a global audience and tap into local markets.
Sometimes it is just the former. For example, broker IUX sponsors Fulham but does not take UK or EU clients. Incidentally, I always find it funny when people complain about gambling ads in the Premier League for this reason. About six months ago I went through all the gambling sponsors of teams in the English top flight and more than half didn’t take UK clients.
However, one change I’ve seen over the past couple of years is more of a shift among brokers to working with teams in the markets and regions that they are trying to acquire clients in.
XS’s branding efforts were one example of that and its decision to sponsor the African world cup qualifiers was presumably a way of reaching an audience in the North African, Arabic-speaking countries.
Other brokers have done similar things. For example, Exness became La Liga’s main LATAM sponsor last year. TrioMarkets is one of the main sponsors of Nigerian football team Enyimba FC.
Over the last couple of months, Hantec Markets became a LATAM partner for Spanish club Atletico Madrid and then followed that up earlier this month by announcing they were sponsoring Brazilian team Fortaleza. Rival brand Axi has also been a long-term sponsor of Bahia, another Brazilian football team.
“Sponsoring teams in the UK or in Europe is a good way of building trust and awareness of your brand globally,” said one senior marketing executive, who worked on several brand initiatives with top flight European teams. “But it’s impersonal. Like, if you are trying to reach clients in Asia, you have to do a lot more work alongside that, compared to the place where the team you’re sponsoring is actually based.”
One way that (arguably) you can see this is with eToro’s financials, which it filed earlier this week as part of its plans to go public. eToro sponsors lots of football teams across Europe and those are also its core markets. In other words, sponsoring Premier League teams did not mean eToro got loads of clients in China, for example.
I reckon there are a couple of reasons for that. One is more ‘feels’ based, rather than tangible. If you watch a Premier League game, for example, you feel that the stuff you are seeing there is tied to the UK.
I have (oddly?) lived very close to two Premier League teams in London and when you see brands at those games, your mere proximity to them makes them feel closer to you and like they are a local company, even if they aren’t. This is probably why so many people don’t realise that gambling companies are just using the prestige of those teams for international audiences. They see games in the UK as tied to the UK.
Another factor is additional branding and marketing benefits you accrue from having a sponsorship. For example, I have been to watch Real Madrid with Exness and once played at the Emirates when Markets.com sponsored them.
Now if they had realised that I’m a hack, that probably wouldn’t have happened. But the point is that you can use your sponsorship to get those kinds of benefits. For instance, there was a representative from almost every major UK media outlet at the Emirates event and some of the broker’s partners – this was a cool benefit for those people.
Now imagine you want to reach clients in Argentina. You might fly a local partner to the UK for an event, but it’s not easy to do that. If there is social media promotion, the majority of it is going to be in English. Ultimately people in Argentina might see your brand but it’s something far away and more impersonal.
In contrast, local sponsorship opportunities allow you to do these sorts of things much more easily.
For example, Exness had a massive event in Mexico in conjunction with La Liga earlier this year – a positive for its local presence, with a chance to meet partners and clients. Axi has used its Bahia sponsorship to give benefits to partners in Brazil, something we also saw INFINOX do recently too via its F1 Sponsorship.
Another factor here is obviously more on the regulatory front. Sports sponsorship is a way of doing more indirect marketing in countries that may have stricter rules on financial promotions. As an aside, one of my favourites here is the gambling company 1XBET, who created an entire news site and sportswear brand called 1XBAT to get around advertising restrictions and sponsor cricket games.
Brazil, which seems to be the main market a lot of brands are going after, has an odd regulatory framework, where you can do quite a lot of marketing, so long as it’s not CFDs.
Exness has been able to use its partnership with La Liga in fun ways here. They have done interviews with former players, like Brazilian player Julio Baptista. This has all of their branding on it, as well as La Liga’s, but nothing about finance. So it’s an interesting way to reach their target audience and stay compliant.
As readers can infer, a lot of the focus here is on LATAM, something that reflects brokers wanting to do more business there and the fact that the ‘footeh’ is pretty popular over there.
But we do see this in other markets and sports teams. For instance, prop firm FundedNext and broker Olymp Trade have sponsored cricket players. Over in the UAE, broker VPFX has sponsored a local cricket team. EC Markets’ partnership with snooker player Judd Trump also seems primarily aimed at the China market.
The point being that sports sponsorship opportunities go beyond European football teams and as we see more and more brokers trying to reach people in markets outside of the continent, it’s natural you see more sports sponsorship initiatives reflecting that.