The evolution of Forex sports sponsorships: Where does the money go?

As an industry which thrives and survives on marketing, and which targets mainly a young, male demographic, it is no surprise that many of the marketing dollars of Retail Forex brokers end up at sports sponsorships.

But where exactly are those marketing dollars going?

How is Forex sports sponsorship changing?

Is it the right investment for my brokerage?

We are please to present a special guest post on the subject by Stephen Pearson, CEO of Sports Media Gaming Ltd (SMG). SMG is a leading international sports marketing agency, and has been involved in brokering a number of the recent sports sponsorships by leading Retail Forex and Binary Options brokers. Stephen has held Board roles at UEFA Champions League and English Premier League.

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The Evolution of Fx Sponsorship: Creating Standout in a Growing Market

Stephen Pearson, Sports Media Gaming

FXTM’s announcement of its endorsement of world champion base jumper,  Valery Rosov demonstrates the evolution that sponsorship by forex brokers has gone through over the last five years.

It was FxPro that trailblazed the way for Forex brokers into large sponsorship deals going back to 2010. At their peak its estimated that FxPro were investing some $20 million in sports sponsorship with front of shirt deals at football clubs Fulham, Aston Villa, naming rights of Southern Hempisphere Super Rugby and Formula1 deals with teams like Virgin and Sauber.

Fast forward to 2016 and there have now been over 70  sponsorship deals done by FX and binary companies with an investment totaling some $300 million.

Football sponsorship continues to dominate the investment and currently accounts for 58% of deals done (see below index) There is of course  a natural fit for brokers with football – a demographic match of males 18-45, global brand TV exposure, access to club databases, extensive digital and social media assets and of course being able to use the intellectual property of the clubs to provide a stamp of stature and credibility.

Motorsports, particularly Formula1 has also attracted significant investment. Speed and technology are what unites Formula1 with online trading and F1 provides the opportunity to activate a sponsorship in 20 different markets round the world. Brands like Exness continue to effectively use their partnership with Redbull F1 to great effect. Other forms of motorsport have also seen investment by the sector – CFI Markets recently became the partner of World Rally and IQ Option a partner of Aston Martin Racing in the World Endurance Race Series.

But what we are also seeing now is a diversification by brands into different sponsorship sectors.

As the number of companies continues to grow then the desire to create standout intensifies.  LMAX and CMC Markets have undertaken sailing sponsorships (Clipper Round the World Race and Land Rover BAR teams respectively) which focuses on a different class of audience for their target markets. These types of sponsorships also enable the brands to invite their clients to actively participate by being on board the yachts.

ICM Capital recently became shirt sponsor to the England Polo team which also gives them a point of difference in the market and allows them to focus on  a very bespoke high net worth audience.

One of the more recent growing trends has been for Brand Ambassador deals. Several brokers have appointed a high profile brand ambassador of late – Xtrade secured  the services of Cristiano Ronaldo, tapping into his 200 million+ social media following whilst ADS Securities have bucked the trend for sports stars by appointing David Hasselhof and Adrien Brody to represent them in brand advertising. These deals offer the brand the opportunity to tailor the marketing on a more personal level.

FXTM’s partnership with an extreme sports athlete is a positive and exciting step change in the direction that some brands are prepared to take to create point of difference and the deal appears to have been cleverly constructed to maintain the interest of their clients through a series of challenges the athlete will undertake.

Mainstream sports like football and motorsports will certainly continue to be a major part of online trading firm’s sponsorship budgets since they offer “one stop” global benefits but we will continue to see the evolution of sponsorship into other areas as brands seek that point of difference.

% split of total sponsorship investment by online trading brands 2010-July 2016

Source Sports Media Gaming Ltd – data includes FX and Binary brands of 70 sponsorships between 2010 and October 2016.