Sports Sponsorships and Forex Brokers-Are they Worth it?
Sports sponsorships have proven to be an effective marketing tool for many companies with an estimated $300 million going into sports sponsorship from the online trading sector over last 6 years.
For Forex and binary option brokers, the idea of teaming up with a well-known sports personality or international sports group has grown in popularity, despite the high cost involved in the partnership. Brokers work closely with their partners to develop long-term sustainable relationships, with some renewing their contracts on an annual basis and others sponsoring a different sports club or sports event each year.
Forex and sports both attract audiences with betting personalities. To cash in on this dimension, , Forex brokers have been eager to sign up with leading figures in soccer, baseball, polo, American football, auto racing and even wrestling for the economic benefit of both sides.
In May of this year, retail broker Orbex renewed its backing of WODWARS CrossFit fitness competitions, to sponsor Eleiko Weightlifting Training in Halmstad, Sweden endorsing two prominent CrossFit athletes. Global FX brokerage company EXNESS Group and Infiniti Red Bull Racing have worked together successfully for several years to promote their economic exposure. The list goes on.
Reasons for Sports Sponsorships
There are several reasons a Forex broker would lay out millions of dollars to sponsor a sports figure. The cost alone conveys a message of strength to prospective customers and the brokerage receives a major lift in credibility by association with worldwide respected teams or persons. It also receives global brand awareness.
But sports sponsorships do have problems. Most partnerships target a predominantly male audience, which is believed to be in line with the core demographics of Forex traders. However, more and more female traders are jumping on the bandwagon and some sponsors lose a good percentage of their audience by using male only sports figure. A tennis champion such as Venessa Williams never seems to teams up a Forex company.
Another problem, and perhaps the most important, is the fact that trading is often portrayed in an incorrect and misleading way. It is made out to be exciting, fun and thrilling when in fact, 90 percent of those opening a trading account for the first time will lose most if not all of their deposit within the first year. Trading in a real account is not the place to find elation.
It is difficult to know if these sponsorships prove profitable for most Forex companies. What is obvious is that more and more money is being used to develop these sponsorships and many brokers continue do so. An exception took place last week when FXPrimus terminated its sponsorship deal with Manchester City, one of the biggest deals in the sports partnerships for brokers, totaling $1.5 million during the course of a year and a half, starting in 2015.The reason given by FXPrimus officials was that they decided to move the firm's marketing strategy towards the main aspects of the firm's product. FXPRIMUS is currently not planning a different sponsorship deal, however the firm's spokesperson admitted that football sponsorships "?offer great exposure and an ideal way to gain global brand awareness."