online-trading

Online marketing speeds up the competition between online trading companies and, at the same time, it performs a selection among the players on this market, where only the stronger have remained, as states Octavian Constantin Patrascu, business developer in the industry. He explains how online marketing has had a positive influence on the businesses of these companies.

When everybody realized Facebook is only a promotion instrument and not a strategy in itself, more and more companies have focused on online marketing, especially those having businesses related to the internet, such as the businesses on the online trading market.

Through online marketing, online trading companies aim at increasing accessibility to millions of users, maximizing this way the sales and the business potential. In other words, the success of online trading consists, today, in finding the best way to reach the most important clients.

Online marketing supposes several activities: website marketing, i.e. creating an online platform, maintaining and developing it; search marketing, i.e. promotion through search engines (PPC and SEO); email marketing, i.e. high-performance systems for interacting with the users, frequent users, clients, frequent clients; online advertising, i.e. campaigns through banners; online research, i.e. primary search (based on research instruments, such as: questionnaire) and secondary search (searching for marketing antecedents and of knowledge on a given subject); web analytics, i.e. instruments and services for analyzing all marketing activities listed above.

Online trading companies are using all these online marketing practices and the results are absolutely spectacular for them: more traffic, lesser bounce rate (percentage of persons leaving the site from the home page without interacting with the page) and an increasingly larger number of persons becoming clients.

Most companies operating on the online marketing market are focusing on the ROI (return of investment) indicator, which is determined by the CPA (i.e. cost per active client) indicator. This indicator is, currently, rather large namely that, if in the past the companies were assuming a CPA of USD 200-300, today its value is doubled.

“Therefore, the online competition has intensified and really strong companies have remained on the market”, states Octavian Constantin Patrascu, also adding that, “if we are wondering why the online trading companies are now worth over 1 billion dollars, the answer is simple: they have an important leverage, namely a well-developed online marketing”.

Until recently, the companies would define their success by relating to turnover and profit, indicators that are currently no longer reflecting the reality, stated the business developer, and giants such as Facebook, Twitter, Airbnb are instruments of reference for this purpose.

“Until the listing of online trading companies on the stock exchange, profit or turnover were not great, but their value, given by the unique visitors of a trading platform, is underlined by online marketing, which has also subsequently intensified their financial indicators”, explains Octavian Constantin Patrascu.

For example, FXCM Inc. was listed on the Wall Street Stock Exchange in 2010, being the first Forex broker who launched an initial public offer, the selling price of a share being of 14 dollars. FXCM’s profit has increased by 16%, up to 79.4 million dollars in the first nine months of 2010, while the American online trading platform’s revenue has increased by 6.5% in the first 3 quarters of 2010, as compared to the same period of the prior year, up to 264 million dollars. The market capitalization of FXCM at the end of March 2015 was of 55.7 million dollars.

The listing in 2013 on the London Stock Exchange has brought another online trading company, Plus500, set up in 2008, an increase of the value of shares up to a market capitalization at the highest level, in April 2015, of 1.3 billion dollars, after it had a 200 million dollar market capitalization in 2013. Therefore, FXCM and Plus500 are reaching together over 1.4 billion dollars.

When talking about online marketing, people in the industry refer a lot to mobile marketing, including on marketing apps, WhatsApp and mobile email marketing, where statistics show that approximately 60%-70% of the people open the messages they receive on their mobile phones.

At any rate, online marketing means a lot more than internet advertising and the online trading companies, whose financial data have unexpectedly grown as the online tools have diversified and keep diversifying, have understood this best.

There is another beautiful side to online marketing, namely that you do not need a humongous budget to take a business to the highest peaks. Once again, online trading companies know this very well, only if we consider the number of clients’ growth potential, and all for a much lower user retention cost than through the traditional advertising means.

octavian patrascu wall street

This article was published in Wall Street by Octavian Constantin Patrascu

Online trading companies are worth over 1 billion dollars, because their online marketing is well developed

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