Why Are so Many Brokers Losing Money in the German Market?

Most brokers I talk to believe that the German CFD and FX market is easy money. German clients have high deposit rates, don't complain too much and like to trade DAX and EUR/USD (easy to hedge or b-book) most of the time.

This is right, but it is not easy to get German clients at all. I've seen brokers spending over one million euros a year for marketing only, having a very bad rate of return. Why? Because the German market is already targeted by more than 40 brokers!

Almost every broker is doing the same – just like traders! When it comes to online marketing in Germany, most brokers seem to do the same just like their traders. Most brokers like to buy the same marketing channels that others already have.

For example: In Germany all brokers do Google Adwords. Most of the campaigns are even in very bad German. There is often no retargeting and the banners look so web 1.0. This way, you can lose lots of money because Keywords like “FX”, “Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term” or “CFD” already cost up to 20 euros (25 US dollars) and you need many clicks nowadays to get a client.

Keyword Costs in the German Market

If your landing page is not perfect, then clients will disappear very fast and you don't even get a lead. The next thing many brokers like to do, is to buy banners on big German financial websites like Godmode-Trader, Finanzen.net, Wallstreet-Online and so on. But the market is very saturated. Clients don't click on banners anymore.

So what you get is branding, but not new clients. How to get clients in Germany for a reasonable price? The problem with most of the bigger brokers is that they have a high rate of employee turnover. For example, marketing people have to deliver fast successes. They get a budget and they know that the business is hard and they need to bring clients.

Most of the time they don't think and just look at what all the others are doing. “If IG and CMC are advertising there, we must do it too, they know how to be successful." In the end, when everybody is doing the same, there won't be an edge, hence you lose money. Only Google and the website owners are happy.

A good way to get clients in Germany is to do proper SEO and build a reasonable link network with blogs, websites and backlinks. It is good to have a network of dozens of websites on interesting topics like “ecn broker”, “How to learn trading?” and so on.

I know that it is time-consuming to get all the websites up and running, but not very cost intense. Once the websites rank on the first page, you will get really good traffic as well as Leads Leads Leads or lead generation are an essential component of marketing and powerful tool by brokers. In its simplest form, leads can be defined as the outreach of customer interest or enquiry into products or services, most often associated with brokerages.These can be created for purposes such as list building, e-newsletter list acquisition, or for sales leads. Amongst marketers, such lists are one of their most important assets and instrumental to sales.There are a variety of methods for generating Leads or lead generation are an essential component of marketing and powerful tool by brokers. In its simplest form, leads can be defined as the outreach of customer interest or enquiry into products or services, most often associated with brokerages.These can be created for purposes such as list building, e-newsletter list acquisition, or for sales leads. Amongst marketers, such lists are one of their most important assets and instrumental to sales.There are a variety of methods for generating Read this Term, demo accounts and live accounts for a low price. This will bring in more money in the long run rather than spending tens of thousands of euros or dollars on Google Adwords!

Sebastian Hell is CEO and owner of BaFin regulated QTrade GmbH in Munich. QTrade is one of Germany's biggest Introducing Brokers offering CFDs, FX and physical gold investments.

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