If you have followed the Premier League over the past couple of seasons you may have noticed that a number of teams have entered into sponsorship agreements with Forex brokerages. This Premier Leagues season sees both West Ham United and Swansea City enter into shirt sponsorship deals with retail Forex brokerages. But West Ham and Swansea aren’t the first teams to be sponsored by retail Forex brokerages with FxPro having become main shirt sponsor of Fullham for the 2011/12 and 2012/13 seasons. Increasingly brokerages are looking towards sports sponsorship as a way to entice new customers to try out FX trading. We take a look at the increasing prominence of sports sponsorship as a way to
Why Sport Sponsorship?
The Premier League and Forex Sponsorship
A number of brokerages have specifically targeted Premier league Football, in the opening paragraph we mentioned how a number of brokerages had entered into shirt sponsorship deals with various top flight clubs. Other brokerages have also entered into smaller sponsorship deals with GAIN Capital (better known as Forex.com) announcing a strategic partnership with high fliers Manchester City. So why has the premier league become such target for brokerages?
The Premier League has a huge global reach with an estimated 1.46 billion fans tuning in to watch each week. This allows for retail Forex brokerages to get their brand in front of a huge audience. Many of the brokerages which have opted to enter into sponsorship agreements with top flight clubs have a significant international presence. Alpari currently Russia’s biggest retail Foreign exchange brokerage and shirt sponsor of West Ham United has operations in America, the United Kingdom, Japan, New Zealand and Russia. So the global reach of the premier league gives the company the chance to reach potential customers in all of the markets in which Alpari operates.
In particular the huge popularity of Premier League football in South East Asia has been something that brokerages have looked to exploit. Swansea City for instance entered into a £2 million pound deal with GWFX, while GWFX does hold a FCA licence the majority of the firm’s business comes from countries in South East Asia. By entering into a sponsorship agreement with Swansea City the firm is able to increase its profile in the United Kingdom where its FCA regulated operation is based, while the brand is at the same time exposed to huge audiences in South East Asia.
All the market research into who the average retail trader is suggests that Premier League football and sports sponsorship in general will allow brokerages to tap into their core demographic. While Premier League football has a growing female fan base, the leagues audience is primarily male. Many marketers believe sports audiences to be extremely competitive and less risk adverse, which is part of the reason why sports sponsorship has been popular with online gaming and poker sites in recent years. Some have suggested that there may be some overlap between those who are keen gamblers and those who are interested in Forex, due to both activities involving significant risk.
Other sports have also been targeted by retail brokerages. Again brokerages hope to tap into a global and primarily male demographic. For instance Swiss FX and CFD brokerage MIG Bank has been a long term partner of the Mercedes Formula One team, while FXDD has also jumped on the Formula One bandwagon previously sponsoring Red Bull racing. Motor Sports have been a popular target due to the fact that the audience is again predominantly male. Market research has also suggests that those who keenly follow motor sports tend to have a higher net worth, with high net worth individuals being a brokerages dream clientele.
Sports sponsorship allows for Forex brokerages to get their product in front of a huge global audience with a demographic that aligns well with brokerages target demographic. Sports sponsorship is likely to remain popular with brokerages looking to reach a primarily male and international demographic. How effective such partnerships are is up for debate and whether brokerages truly get their money’s worth is debatable.