Brokers spend a lot of time and resources on marketing using banner ads. Creating banners, finding placements and sites that work, trafficking & tracking – let alone how much money is being spent on the placements themselves.  Don’t get us wrong, Display marketing is obviously necessary to have a well-rounded marketing communications mix, and this tactic can be very effective in getting clients. The issue is that it takes away from the time and focus spent on search engine marketing.

So why should brokers spend time on Search Engine Marketing?

Glad that you asked. There are a few reasons:

1. A very important part of the acquisition funnel

If you think about your own usage of search engines, you’ll notice that when you’re interested in a new product category on average you’ll first search for generic terms in Google.. you’ll then start reading on sites that seem authorative (and see /click the banner ads there) and proceed to google and read about specific brands. Ofcourse this is just one scenario, but our research confirms this is a very representative user journey . Well, if you want to influence brand selection, you will have to be there when users first start searching for the product category (ie ‘forex’ or ‘CFD ‘s’) and when they start searching for your brand (ie ‘FXCM’ or ‘IG MARKETS’). See an illustration below using the classic marketing theory for the decision making process. In red, the steps that usually start with search. Depending on your strategy, you may or may not want to skip the need recognition phase as a target.

2. PPC clients & leads are higher quality

There is something about the channel that ensures a higher quality client (ie bigger accounts, trading activity) and that is true amongst almost all brokers we have talked to and seen data for.  Perhaps it is the fact that high quality clients are more often ‘readers’ as opposed to ‘browsers’ (they don’t have time to browse around, are more task oriented) perhaps it’s something else. In any case, specifically looking at leads & clients that have a search dominated journey versus a display dominated journey, search clients are higher quality.

3. Its quick and..well.. almost easy.

Ok, it’s in the industry’s best interest to make PPC sound complicated but the truth is that brokers with some time on their hands can easily set up a simple campaign themselves. See Google Adwords University for a good and free course. Of course at some point it will make sense to hire outside help. That point comes at a spend of around £25K a month, where you will either need to hire a full time staffer or run a campaign that is not very optimized. Of course there are further advantages of working with an agency, they will often know the right keywords to bid on without trial and error, they will run a more efficient campaign through knowledge and automated bid tools and they will be helpful beyond just technical know-how. Also, some will only charge you a percentage of spend which means that if you stop spending you won’t have a staffer to ‘re-assign’.

4. Need some extra leads? Just turn up the dials.

PPC is one of the few venues where you can very easily – in real time – turn up or down the dials. If your sales people are sitting on their hands, it’s but the work of a moment to up some bids, unpause some keywords, add some placements etc. Happy sales people, happier marketing people.

On the other hand, the market has gotten very competitive. Looking at figures from Adgooroo on the US market on a selection of Forex related keywords in Google, the top 20 brokers together have spent over $5M in the 6 month period from June till December 1st. 

Note that FXCM seems to be the only broker using more than one account and grabbing a huge share of all the clicks out there targeting different audiences and using different propositions (brands) – a strategy of diversification that is clearly working well for them. As you can see, of these Forex.com (GAIN Capital) has the highest CTR, that clearly has a lot to do with their domain forex.com being so relevant.

Some brokers plot a demand ceiling to see where their spend should be to hit their targets both CPL and volume wise. This could look something like the curve below and depending on your strategy you might pick a point on the curve as your goal. For instance, if a low CPL is your goal, on this curve we would pick 440 leads at a 75 CPL as a target for PPC advertising.

This goal could be very different from what goals you have in other channels – your overall CPL could be much lower or much higher – but being pragmatic means optimizing channel by channel. There’s no use in getting a few more leads if that means your CPL increases by 20% overall (likewise in the other direction), so thread carefully.

No matter what your goals are, if you are at the level where you could use some outside help with your campaigns, contact us for a no-obligation consult on your PPC account.

This article was published earlier in the ForexMagnates Industry Report.