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It’s Christmas time or, if you’re more of a corporate person, the ‘holiday period’, which means that people across the world will invite you to their house to get drunk and rejoice in anticipation of the upcoming holy day. So it was this weekend for yours truly.
It was also an event that, for whatever reason, attracted employees of the various wideboy industries that the UK, having given up on manufacturing physical objects, seems to now excel at. I was there proudly flying the flag for CFDs, someone else was a ship broker, and another guy was making NFT artwork for a group of ex-traders from Essex. It was enough to bring a tear to the eye – images of Spitfires, pints of Fuller’s London Pride, and the opening lines of ‘Jerusalem’ flashed through my mind.
Someone else who was there worked for a large US spirits manufacturer as their head marketing person for non-US markets. Riveting conversationalist that I am, we ended up talking about marketing in ‘hard to market’ regions. For example, many Islamic countries permit alcohol but have total bans on marketing it. How do you get around this?
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The company that this person worked for realised if they gave bars unbranded, neon signs, with only text on it, their brand name recognition was good enough that the text would act like an advert for the company (no I’m not telling you the text). Another one was to go to places like Dubai and get people to throw amazing parties, then have loads of branding and other stuff at the party.
All this talk of trying to find loopholes and workarounds in the face of overly aggressive regulators sounded mighty familiar to me, as I’m sure it does to you. It also fits with a couple of things I’ve seen in the last few weeks.
We’ve looked once before at Brazil, which is a hard to access market because you are effectively precluded from advertising there. You can take the IQ Option approach and just pretend that’s not the case, which seems to have worked out ok for them.
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An interesting method that I spotted a couple of weeks ago comes from ActivTrades. They are one of the only firms to have a local license and operate that entity via a Brazilian URL. They also started offering trading in NDFs (non-deliverable forwards).
I think of these as an FX product that is mainly designed for people to hedge or get indirect exposure to a currency that is restrained by capital controls. But ActivTrades is offering them on FX, commodities, and indices. I have never seen this before and, to my knowledge, they are the only ones doing it.
One way of looking at this is that they did a cool, new product, which can be offered in the local market. Another way of looking at it is they have a local license and need a product for it, so they added NDFs. They can then market their brand in Brazil. Plus it seems like if you actually sign up to the Brazilian entity, you then get taken into a platform that has CFDs. Smart stuff.
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Another alternative, which seems popular among brokers, is to establish something like an ‘educational’ service in a place where it’s ‘hard’ to market. For example, Admirals has an educational centre in Indonesia and FXTM has one that is also targeting Brazil. How successful these are is another question.
What you can also do is something kind of like the booze company throwing a party in Dubai. This is what Exness has done by partnering with La Liga in LATAM, where the broker is the Spanish football league’s official partner.
Because they are La Liga’s ‘official partner’, they are able to do big events with their branding but – for better or worse – aren’t really promoting themselves. So there is a big event that lots of people want to come to, but they have some plausible deniability in terms of being able to say that they aren’t promoting themselves.
Another facet of this is that you can then use content from this partnership to market your product. For example, if you look at Exness’s Google marketing in Argentina at the moment, they are using an interview with Julio Baptista, which is on the Exness LATAM channel, as a YouTube advert.
Again, they can use this and then say they aren’t doing anything. All they’re doing is promoting a video with a guy that, unfortunately for him, used to play for Arsenal.
The downside of this is obviously that, a lot of the time, you aren’t actually talking about your product. However, it’s still more localised than something like a Premier League shirt sponsorship, where someone might see you during a match but that’s it.
Still, the best option to me seems to be something like ActivTrades is doing. Ultimately all of this is something like a cross sell. You want to put your brand in front of someone so that they ultimately trade with you.
If you get people in via something like an NDF but also have CFDs on your platform, that seems like it would probably have the highest conversion rate. The obvious risk is that the regulator might get angry at you. But yea…I’m sure it will be fine. Cheers.
