Affiliate marketing plays a major role in overcoming the customer acquisition challenges faced by financial trading brands across the globe. Retail forex, binary options and CFD trading are all becoming more competitive spaces. While small to mid-tier brokers struggle with offline marketing budgets and larger organisations need to maximise ROI.

The industry’s crossover with iGaming and its key verticals, such as sports-betting, means that affiliates are also important in helping brokers to acquire players outside of the core financial trading demographic.

Here, we look at how all sizes of financial trading brokers are using affiliate marketing to improve results.

The Challenges of the Financial Trading Space

Financial trading is becoming increasingly competitive. According to FinanceFeeds, new brokers are being set-up on almost a daily basis. Therefore, it’s difficult for smaller brands to stand out. Brokers of this size also have less marketing spend for offline channels, such as TV and print ads, meaning they tend to look online for more cost-effective acquisition methods.

Even in the digital space, media buys with relevant high-traffic websites like the Financial Times, Wall Street Journal and major daily newspapers and magazines require significant investment. Ad spend can accumulate quickly on these sites’ impressions-based or CPM advertising model – without necessarily achieving significant conversions.

It’s also not just the smaller brokers who have to be budget-conscious. Larger financial brands need to complement their high-traffic channels, which include paid social as well as media buys, with niche traffic sources. In order to maximise ROI, they require more cost-effective channels.

In addition, forex’s regulatory landscape is relatively uncertain and this is likely to continue going forward. In particular, the rules governing the tightly-controlled European market are expected to get stricter when the Markets in Financial Instruments Directive (MiFID) comes into force for all EU-based brokers next January.

Given the financial trading space’s various market and marketing challenges, brokers are increasingly looking to affiliate marketing. Typically, a financial trading affiliate programme takes around six months to build results, meaning that the savvier brokers will develop and launch their strategies sooner rather than later. In the meantime, less cost-effective but more rapidly-building channels like media buys, where budgets permit, PPC and promotional social media posts can actively support trader acquisition.

How Affiliate Marketing Supports Trader & Customer Acquisition

Affiliate marketing provides huge acquisition potential. Indeed, as much as a third of new trader acquisitions (30%) can be driven by a mature affiliate programme, according to Income Access’ data. Furthermore, the IAB and PwC reports that UK online performance marketing spend is rising, reaching £1.6 billion in 2016 – a growth of 12%. However, brands will only achieve these results if they build a team of expert affiliate managers and leverage sophisticated affiliate software to manage the programme.

While affiliate programmes take time to build, the medium is more cost-effective than PPC, paid social and media buying in the long-term. Rather than paying for click-throughs or ad impressions, only conversions (new depositing customers on either a CPA, revenue share or hybrid basis) trigger a payment.

Affiliate marketing also supports brokers’ other digital channels, including their organic search strategies. Affiliates act as external SEO experts for financial brands. Let’s not forget that, according to imFORZA, 93% of online experiences begin with a search engine.

Affiliate marketing also offers third-party endorsement. Smaller brands, who are likely to struggle in organic and paid search results, achieve greater recognition when they strike partnerships with big affiliates.

The affiliate channel also supports content marketing, which helps brands to deliver their sales message more effectively. According to Forbes, we see between 3,000 and 20,000 brand messages every day. This means that resonating with potential customers is difficult.

Rather than driving an explicit sales message, content marketing can be used to educate and inform potential traders by creating visual and written guides on how to trade, and writing about the latest economic news and its impact on forex and other assets. This content can be developed in partnership with affiliates for their sites as well as the broker’s own portal.

Affiliates also support financial trading’s natural crossover with iGaming. Sportsbook affiliates can help brokers target new customers, in the shape of non-traders. Forex, binary options and CFD trading attract gamblers because they are similar to traditional betting, in the way that you either win or lose money based on your prediction – the biggest difference is that traders speculate on an asset’s  movements in the financial markets instead of, say, the result of a 90-minute football match.

Looking Ahead…

Financial trading is likely to see significant changes in the near future. The increasing number of emerging brokers is probably not going to slow down, especially in forex and binary options.

Brands will therefore be looking to the affiliate channel more. We can also expect regulation in Europe and the US to tighten, which will mean that affiliate marketing will be more important in terms of specific geographical targeting.

Here at Income Access, we’re partnered with leading global financial trading brokers such as GAIN Capital and ETX Capital. To discuss leveraging our affiliate software and affiliate programme management services, please reach out.