FOREX, Crypto and Football: A Win-Win Situation?

FOREX, Crypto, and Football: A Win-Win Situation?

Despite, or perhaps because of the COVID-19 pandemic, FOREX brokers and crypto companies are investing in football sponsorships at levels not seen before. Do FOREX/crypto and football – arguably the most popular sport worldwide – represent a match made in heaven? Arincen examines the matter and tries to provide clear answers following the below structure:

● A Brief History

● Why Football?

● Why Now?

● FOREX Industry/Crypto Companies-Football Sponsorship Growth Drivers

● Pro and Cons of Football Sponsorships by FOREX brokers and Crypto Companies

● The Bottom Line

As any marketing executive will tell you, you get to people’s hearts by hitting at what they love most. Many people around the world love football, so it is understandable that FOREX brokers and crypto companies and exchanges would want to associate themselves with such a visible and high-profile sport. In such deals, FOREX brokers and crypto companies get the right to use the football team or player’s images to promote their services, while the other party (in this case the football club) gets a new sponsor and a hefty check. These relationships have given us some very significant sponsorship deals of late, some worth noting more than others.

A Brief History

The first FOREX company to get the proverbial ball rolling in terms of football sponsorships was FxPro in 2010. The trend has only accelerated since and taken on a new level after the pandemic took hold. These developments happened at a time when other types of marketing sponsorships came to a standstill. It is now safe to say that FOREX brokers and crypto companies and exchanges make up some of the most active sponsors in the upper echelons of football today. This not only includes the English Premier League, Spain’s La Liga and Italy’s Serie A, but also big international competitions like the recent Africa Cup of Nations earlier this year, when crypto giant Binance was plastered all over stadiums.

According to one estimate we found online, over $850 million has been invested by retail FOREX and crypto companies in sports. Of this, 65% has been channeled into football sponsorship. There are many reasons for these investments. Put simply, the top leagues in Europe attract billions of viewers around the world.

Why Football?

Football fans come in all shapes and sizes, but it is commonly agreed that fans have a feverish loyalty to their club and the disposable income to do what it takes to support it. These young, upwardly mobile, and aspirational people are exactly the kind of demographic that appeals to FOREX and crypto companies. Aligning with football clubs also offers significant tangible benefits, such as brand exposure to global audiences. As for the intangible benefits, these include the credibility gained by association to world-class partners who enjoy sporting success.

However, as the football sector is seeing a greater amount of density than ever before, there may soon be a time when another FOREX broker announcing yet another football deal doesn’t quite hit the mark that it used to. Brokers are starting to look for a standout in a market that is becoming increasingly cluttered.

One way around this issue within football itself has been to try and dominate the landscape. eToro, for example, now has partnerships with over 20 clubs around Europe, giving them permanent visibility week-in, week-out. Likewise, Israel’s Plus 500 is now also seen on the shirts of multiple tier-one clubs in Europe. Other examples abound. One came in late 2023 when UEFA and Swissquote announced a new sponsorship agreement for the UEFA Europa League and the newly-launched UEFA Europa Conference League for the next three seasons (2023 to 2024) of European club football.

Why Now?

The explosion in FOREX brokers and crypto companies investing in football over the past two years is interesting, given how other sectors suffered from a trough in marketing budgets. Yes, stadiums were empty during the pandemic, but this also meant that most people were at home cheering their favorite teams from the comfort of their sofas. This created an opportunity for FOREX brokers and crypto firms to heavily advertise on TV in the hopes that the extra hours spent at home would allow people more free time to explore online trading as a secondary source of income.

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FOREX Industry/Crypto Companies-Football Sponsorship Growth Drivers

Why Football clubs, you will ponder. Why do FOREX brokers and crypto firms sponsor football clubs in the first place? The answer to these questions is not always that simple. However, there are a number of reasons for the popularity of football sponsorship in the FOREX and crypto industries.

Global reach

Numerous brokerages have their focus specifically on English Premier League football. The Premier League possesses huge potential in terms of global reach. Billions of football fans watch matches closely every week, which allows UK-based FOREX brokers and crypto companies to present their brand to this wide and highly diverse audience. However, with the Premier League's massive international audience, it does not have to be UK traders that contact these brokers. Traders from other countries can do so too.

Many of the FOREX brokerages and crypto firms that have entered sponsorship deals with some of the English football clubs now enjoy wide international presence. Even if a Spanish-based broker chooses to invest in La Liga, the top league in Spain, the access to the Spanish-speaking world is something they cannot easily find in other ways.

An effective marketing tool

Moreover, sports sponsorships have proved to be an effective marketing tool. Despite the high cost of sponsorship deals, many well-known retail FOREX brokerages and crypto companies still align with sports teams. The companies tend to develop long-term relationships while many firms renew their contracts every year. The exact return on investment is a closely guarded secret, but you can bet that no hard-nosed businessperson is going to sink money into a marketing venture for no return. Imagine that a would-be investor is also a keen football fan and they see the name of a crypto or FOREX company on the shirt of their favorite team. That drives interest and makes the would-be investor visit the advertiser's website. This is exactly the kind of traffic these companies are looking for.

Right audience

Another reason for the spread of football sponsorship in the FOREX and crypto industries is the type of audience these sponsorships reach. Both FOREX and crypto on the one hand, and sport in general on the other, tend to attract people with a risk appetite. Not only that, they seek to attract a clientele who lives in wealthy countries and who likely has money to spend on something like retail trading.

Pro and Cons of Football Sponsorships

The list of pros for football sponsorship is long, including:

An already-proven platform for financial brands. Big financial blue chips continually use football sponsorship to great success. Take the examples of Barclays, Santander and Standard Chartered, just to name a few banks.

Compatibility with the target market. The football demographics match the online trader demographics perfectly. This predominantly includes males aged 20-45. Audiences for football are now so big that the female demographics are also adequately catered to. Football transcends sport into entertainment, and so women’s football is fast taking off. Also, most top teams now have a women’s squad that can also be sponsored by the broker.

It is a one-stop media buy. Sponsoring a top football team offers immediate access to global markets via international television, multi-language Websites and social media channels. Geo-regional deals are offering solutions to brokers that either want a more cost-effective sponsorship or wish to focus on key markets.

Countries of the Gulf Cooperation Council (GCC), in particular, are becoming a market of growing importance. The trend for Arabian Gulf ownership of foreign clubs and investment in European players is offering huge benefits to FOREX and crypto partners aligned with such clubs and players.

Regarding cons, it is difficult to identify many. With the large amounts of investment now going into football sponsorship, one can argue that FOREX and crypto brands need to find alternative options to create more standout and points of difference relative to their peers. We see this already happening, with many brokers also looking at alternative sports platforms. These include sailing, extreme sports, tennis and golf.

Football clubs also have an onus to do proper due diligence. We have seen deals signed and collapse shortly afterward because the clubs have not done their homework. In a sector that is fast spending money on sponsorship, there is a tendency for clubs to rush into deals.

However, if clubs are signing rogue FOREX and crypto companies, it can affect their own ability to sign other brands in the same sector in future and tarnishes the industry. Clubs need to have a clear understanding of the regulatory framework and ownership structures before entering long-term agreements.

The Bottom Line

A partnership with a football club can include a wide array of measurable benefits, including access to the club’s digital and social media platforms, club database, and advertising across all the club assets. Sophisticated technical analysis and research tools are now available to satisfy FOREX brokers and crypto firms that have traditionally just relied on direct response and digital platforms.

There are intangible benefits, too. The FOREX, and certainly crypto, industries are very new for many. Thus, those industries have not had the time to establish a credible position in a fast-growing and cluttered marketplace. Through football sponsorship, the firms can short circuit their way to increased credibility.

FOREX and crypto brands need to focus on not only securing the sponsorships, but also on developing well-thought-out activation plans to maximize an adequate return on investment. Where such high potential cost is concerned, the decision to use football sponsorship needs to form part of the company’s overall marketing strategy.