FXCM is due to reduce their advertising budget dramatically. This move will have an impact on the forex industry, but also in ways that aren’t expected.
FXStreet’s CEO, Fransesc Riverola, reported that FXCM will be dramatically cutting its advertising budget for 2010. In a very interesting blog post, he said that the battle will be in M&A – mergers and acquisitions.
In his post he describes FXCM as one of the most active advertisers in the forex industry and looked into the impact of their move:
2009 was a year of explosion of Forex sites. The consequence of the dramatic cuts in the Retail Forex brokers’ budget is going to be that many new Forex related sites will be forced to close their doors due to the lack of monetizing of their ad stock.
Well, as an owner of a forex site that has seen great growth in 2009, I don’t see any fall in revenue – on the contrary – revenue is growing. My litmus for advertising costs is Google AdSense. The largest ad network in the world has supplied me with steady CPMs throughout 2009. I won’t be shutting my doors soon…
I think that the move by FXCM (which also advertises here) is significant, but will also have other consequences: other forex brokers will have an opportunity to increase their presence on the web and gain more traders, as FXCM will make some space vacant.
I stick to my statement in the 2010 forex industry predictions, and see further growth in forex trading, in the education of traders and the maturity of brokers. This will eventually have a positive effect on advertising dollars as well.
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