We have another podcast out, this time with David Varga. David is a Co-Founder of the brokerage group Purple Trading and the prop firm Fintokei.
We talk about his background and setting up Purple Trading, as well as the launch of Fintokei – a prop which was launched two years ago specifically to target the Japanese market and which is now going global.
And now on to this week’s article!
Last week one broker was in the news in India, something followers of the TradeInformer WhatsApp Channel will have already seen. We’ll be kind and not name names here, but the article in question suggested that this company has made over $50m from the India market alone.
This is a remarkable amount of money, particularly for a country that is essentially gray market at best. India is not alone though. ‘The’ growth area for the CFD industry today is Southeast Asia. That means the ASEAN countries, as well as places like India and Bangladesh.
The problem, of course, is that most of these places have a less than favourable regulatory framework in which to operate. Indonesia is the only market that seems to have one, which explains why XTB recently acquired a firm there.
The result is that operating in these regions is harder than it otherwise would be. The most common route is obviously to go to market with IBs. However, IBs are also probably the worst model to use because they are unreliable, often cause problems for you and take a bigger cut of revenues.
So what are brokers doing to reach potential clients in these regions? From the outside looking in, I see a range of strategies that are often being used in conjunction with one another. I figured we’d run through some of them.
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- OEM marketing
This is something that came on my radar last week and, given it seems like some people have been doing it for years, I feel like a noob for only just clocking it. Anyway, OEM stands for original equipment manufacturer. It is primarily used, from what I see, to refer to the main Chinese phone manufacturers – Huawei, Xiaomi, Vivo and Oppo.
All of these companies have their own app stores and built in apps when you buy their phones. Because so many companies are being blocked by Apple, Google, and Facebook, a tactic to use is to market directly using OEM app stores and apps.
The other reason this works is that (1) it’s cheaper (2) you pay for downloads, not CPC, and (3) these phone brands are the dominant players in many parts of the world that brokers are targeting. For example, Xiaomi and Vivo are the top two phone brands in India by market share, with Vivo in first place, according to statcounter. Combined they constitute almost half of Indian mobile phone sales.
To give a more tangible example, OctaFX has used this system to begin acquiring clients in India, Malaysia, Nigeria, and Indonesia.
- Programmatic ads on DSPs
This is also something lots of firms are doing so probably no surprises here. A DSP – demand side platform – is basically a company that lets you buy ad space on pretty much any online medium. Programmatic ads are automated based on different criteria.
I will be honest and say I don’t know all the details about how this works but it can involve stuff like taking a huge number of different creatives (we are talking hundreds) and then running them across different mediums to see what works best, both in terms of placing and content.
If you get enough information you can also model what the ideal person looks like post-download. For example, if I download your app, then become an active client, what was the route to that and what do I look like as a client.
Some of the companies offering these services can also look at what apps you already have installed. So if I have Investing.com’s app on my phone and a bunch of other broker apps, for example, that might lead to higher installs.
Regardless, companies are doing this and having some level of success from it in the regions we’re looking at.
- Generic Google / US tech oligopoly ads
Not all brokers are being blocked by Google and Meta. To give an example, if you Google ‘trade gold’ in Japan, the first place ad is from HF Markets. You can see this below.
When you click through, you see this is an offshore entity in SVG. The URL tracking tags show they are targeting Japan with this, so it’s not an anomaly or mistake that it’s there.
Other brokers are able to do this in other ASEAN countries. For example, when I did a mini trip across Thailand, Cambodia, and Vietnam last year, XM and Exness ads were everywhere, across all major social platforms and on Google ads across different websites.
The point being – not everyone gets blocked by Meta et al. They can get through.
ATFX is on a hiring spree – read about it here.
- Ad cloaking
This is a more ‘interesting’ tactic that is definitely being used by some brokers. For those not in the know, ad cloaking is a piece of tech that lets you submit ads to a publisher or ad network, like Meta or Google Ads.
The person at the company reviewing your ad will see something completely innocuous. However, once the ad is approved, it shows to viewers as your broker. Clever stuff!
Another method is for brokers to not do it themselves, but to get their affiliates to do it. You then run multiple ad accounts at once. The goal is to ‘warm up’ other accounts then use ad cloaking on one.
If you then get banned on one account, you can immediately switch over to your ‘warmed up’ account, where you’ve been placing genuinely innocuous ads, then start doing ad cloaking on there.
- SEO
This is also more of an affiliate play and it’s something you see globally. Basically you get some affiliate that ranks highly in Google searches or who does paid search as well.
You look for higher intent keywords (eg. ‘trade gold’ ‘trade forex’) and then pay them to appear as the ‘best’ broker for trading in X or whatever it is the person has searched for.
The reason I highlight this is that in Asian countries there seems to be a whole offshore industry for this, just for people that want higher leverage. Again, and as we looked at before, XM and Exness are often smashing this.
- Football
This is an old one and an obvious one. It’s also off limits unless you have a decent amount of cash.
Regardless, brokers are doing it and if you sponsor a football team (or some other sport) then a large amount of your audience will end up being in Asia. Indeed, sponsoring a team is less about that club’s domestic market and more about getting people to see you abroad.
For example, Exness recently partnered with La Liga but to be its partner for LATAM. Incidentally I always wondered if it would work to sponsor a Mexican team or even an Egyptian team. It would be cheaper and they have huge domestic audiences that are still worth targeting – but that’s probably for another article.
This strategy is not going to get you clients immediately but definitely works in terms of being another way to get in front of potential clients and build legitimacy. For example, I remember watching a Liverpool game in a bar in Vietnam and ThinkMarkets branding kept popping up on the sideboards. Imagine you already saw their ads on your RedMi phone when using the Picsart app, then they pop up when you Google ‘buy gold’, and so on. It’s another point of contact and big trust marker.
- YouTube SEO spam
If you imagine running all of the sorts of strategies above and then imagine the customer journey, the odds are at a certain point they’ll go ‘is X a good broker’ or something similar.
The problem is that Google search increasingly sucks. So a lot of people go to YouTube and then they search ‘is broker x good’ or something like that. Reddit is another avenue for this kind of activity.
Brokers’ solution to this seems to be to just spam YouTube with endless reviews, often by people that seem to have zero relation to finance. For example, if I go on YouTube here in Japan and search ‘Exness’ then one of the first reviews is…an anime frog.
Ok but another review is by this guy Marcus Reviews, whose most recent videos are SEO spam on how to build websites on Wix. He’s also done reviews for eToro, Capital.com, Plus500, IG Group, and more.
So basically you pay these guys, they do the review, and then it almost clogs up the search option so that people can only see more of your affiliates. And of course, the reviews are very favourable!
- SEO protection spam
This is an interesting area and one that is less about onboarding clients than protecting your brand. The main goal here is to basically make it so that if ‘bad’ things happen to you and are ranking somehow in Google, other stuff takes its place very quickly.
Sometimes there is actually a legit reason for this. To give a real life example, one broker got abused by scammers earlier this year. The scammers were then going around, including to me, and saying the broker screwed them.
This wasn’t the case, so I didn’t publish. However, I noticed that within about one day of them messaging me, the broker put out loads of press saying how they had managed to stop a group of scammers from abusing their systems. It worked because then that started ranking in Google.
Other times I see people paying affiliates to do this stuff. For example, let’s say you are in a gray market. You may have people Googling ‘is broker x legal in [insert country]’.
You then spam Google with affiliate content, kind of like YouTube, saying how you are regulated in multiple jurisdictions and so on. This stuff ranks highly in search and, again, you are protected from ‘abuse’.
Final thoughts
I’ve said lots of times before in this newsletter that capturing marketing activity is very difficult because it can take so many different forms. On top of that, if someone has something that is working, they aren’t going to tell you because they don’t want their competition to know about it.
As a result, the above points are likely to just be a fraction of what brokers are doing overall to target the ASEAN region (and indeed elsewhere). So even if it’s a good overview, it’s not a comprehensive one – a topic to revisit!