The last couple of months have turned into a form of double or even triple whamming for the FX and CFDs industry. While the new EU regulatory framework has not been a huge surprise, the implementation of a ban on advertisement on the part of Google was certainly unexpected by the industry.

Last week Mastercard joined the fray and the whole effort started to seem like a well-coordinated effort on part of legal authorities, most likely primarily in Europe. But how deep will the changes from Google and one of the leading card providers affect the whole retail industry?

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

The retail foreign exchange and CFDs brokers and their payment providers have a solid track record when it comes to finding loopholes in the system which official authorities put in place. To ascertain the impact of the Google Ads ban, in this piece we spoke with a number of senior executives from the industry about the prospective impact on the business of online brokers in the coming weeks.

Google Ads Costs Could Go Down

When speaking with the Global Head of Sales at Advanced Markets, Natalia Hunik, we discussed several aspects of the ban. She shared her views that there is little clarity about how Google intends to implement the ban, and the full guidelines are yet to be made available to the public.

“We have already been seeing some of the local regulatory enforcement by Google, for example, when trying to promote webinars in [the] Russian language, we have faced limitations on certain keywords,” Hunik explained.

Russian authorities have been actively discouraging search engines from servicing brokers unregulated in the country with local Yandex coming in focus for allowing ads from two brokers.

Hunik explained that soliciting clients will become more difficult as Google will require passing a certain certification for all regulated jurisdictions.

“Practically, it means that if you are an offshore broker targeting UK residents without appropriate licensing permissions, you will likely need to go back to the drawing board with your marketing plan. On the bright side, for everyone else who acquires appropriate certifications from Google, cost per keyword will likely go down and you will be getting better value for your marketing dollars,” the Head of Sales at Advanced Markets shared.

Organic search is on its way to become more important than ads, Hunik thinks: “If implemented correctly, this change will bring more transparency into marketing practices in the industry and will ultimately make clients take informed decisions about the products to invest and brokers to sign up with. Ultimately, those firms that have a marketing strategy centered around organic search and quality content will be coming out as winners as they will benefit from higher traffic to their high ranking pages and resourceful content.”

Going Around the Ban

The resourcefulness of the FX and CFDs industry has been at the core of its success in recent years and the ban of Google Ads on certain products is not likely to be any different, shared the CEO of B2Broker, Artur Azizov.

“First of all, we should understand that Google bans on advertising only concern direct advertising of FX/CFDs, direct advertising of specific instruments and direct advertising of investments in them. For example, when Yandex banned forex advertising in the Russian Federation, everyone started to advertise Forex training and Forex consulting via another company (for Yandex), to appear like advertising training for trading in financial tools,” Azizov explained.

The CEO of B2Broker also thinks that the likelihood that the Google ban will affect only Adwords search advertising rather than banner advertising is significant, as there is a completely different algorithm for impressions and moderation. Banners will not feature the words FX/CFD, but instead, feature text without a direct reference, which does not fall under the ban.

“Google is a commercial organisation and it was forced to introduce a direct ban, and not because they were looking to reduce their profits! There is no doubt that marketers will come up with new ways of circumvention,” Azizov elaborated.

Suggested articles Swissquote Joins oneZero EcoSystem to Bolster Liquidity OfferingGo to article >>

The CEO of B2Broker also thinks that there are many more narrowly focused or niche websites, who will be happy to welcome Google’s ban, as more and more projects will seek to advertise there.

Proof of Regulation

Elaborating on the certification for brokers required from Google, Bart Burggraaf, Partner at marketing agency MediaGroup, shared: “Google’s certification will most likely ask for proof of regulation in the countries targeted and the fact that the announcement coincided with one about cryptocurrencies makes me believe not marketing Crypto products (or proving they have regulatory approval for such) will be a part of the requirements for this certification too.”

“I believe the move by Google will not change a lot, at least for legitimate brokers doing business in a legal and regulated manner. There was a time where this requirement to be certified would have made a large difference in protecting consumers, but since regulators have sharpened their oversight and rules over the past years, this will only impact those few cowboys that are still generating accounts in countries where they are not allowed to do so. So while overdue, I believe it’s a good thing for the industry and consumers alike.

Burggraaf thinks that brokers that are doing business in an unregulated environment are likely going to rely even more on affiliates, black hat SEO, and content.

“There is some business to be picked up there, but I doubt the long-term viability and the ability to scale such a marketing strategy, without becoming more ‘legit’ over time,” Burggraaf explained.

Not a Total Ban

Speaking with Finance Magnates, the CEO of Tools4Brokers, Aleksey Kutsenko, said: “It’s important to note that Google has not announced a total ban of the FX&CFD ads. They merely tightened moderator acceptance requirements for advertisement of this category. To run ads of this type, we will need to provide a license from the local moderator. The real question is; how much do Google moderators understand what is allowed or forbidden by any given license?”

“If you take a look at the list of countries Google will be restricting, the list is not that long. It doesn’t seem like a ban. In a long-term perspective, measures suggested by Google allow for the protection of a licensed broker with a particular regulatory restriction. It should in some way halt, or even reverse the tightening of regulations,” Kutsenko explained.

The CEO of Tools4Brokers explained that restrictions have been in existence on Russian search engines for years. Despite those, unlicensed brokers have continued to attract clientele, through linked services and nested pages that have no relation to the brokers’ domain. An example of this may be an offer for a sales training course, advertisement of which is not formally forbidden. At present, there is no information about how Google plans to ban those types of advertisements.”

Diversifying Marketing Strategies

Charlotte Day, who’s the Creative Director at Contentworks and industry veteran Nicc Lewis, who recently founded his own marketing agency Expozive, share the views that marketing for brokers will need to change.

“From our perspective, we are seeing brokers pulling their marketing spend away from Adwords and mainstream social media and investing more heavily in content marketing, PR, video, and native advertising. While Google is King of search engine advertising, content remains Queen and there are other avenues for brokers to explore. It’s also worth noting that keyword SEO (search engine optimization) via organic content is still valid. Digital and regulatory rulings made in the last month will force brokers to tap into their authentic content marketing channels and this will certainly eliminate those who don’t have the expertise,” elaborated Day.

Nicc Lewis elaborated on the matter of regulated vs unregulated brokers, stating that private companies are doing the job of the regulators. He shared that it is harder for non regulated brokers to get banks and payment processing, and now they will get a hard time will Google too.

“Although the impact of the Google Ads ban by itself will have an impact on brokers and affiliates, the latter will get it a little tougher. One main funnel is to attract mass cheap traffic to a website via Facebook and retarget using Google. For banner advertising in this sense, there are alternatives and SEO is still open,” Lewis elaborates.

Having said that, Lewis also explained that brokers should take advantage of an opportunity they have been handed by Google and own more of their own new traffic via advertising. He also thinks that affiliates should already look for alternatives for media as the optimization process takes a minimum of 3 months – which means it’s already late. In addition, they need to invest in building SEO capabilities.