The detail is really in the details when it comes to contests and the like. Some of them are hardly related to trading and will get some publicity, press and awareness of the general public but will not directly translate into trading accounts. Others are trading contests and succeed in getting the right public on the platform at a lower cost than usual.
However, trading contests are hardly ever (unless the price is so big it commands a lot of attention) successful on their own; they need to be supported by a media buy and PR outreach and as such it’s just like the normal lead generation brokers do, but with a difference; the ‘leads’ that are generated in this way are usually cheaper because there’s something to get for free but on the other hand that ensures they are also lower quality.
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Whether it’s worth it or not depends a lot on the KPI numbers the broker gets from these contests; if at the end of the day the total cost of the contest including promotion weighs up favourably against the revenue generated from trading (from the clients generated purely through the contest) and indeed against the ROI of doing ‘normal’ advertising, it makes a lot of sense to run these contests. Regardless, taking into account the quality issue and the audience they attract it is certainly more suitable for brokers that have a target audience on the lower end of the quality spectrum.
A general word of (pretty obvious) advice is that when a broker does run a contest, the closer it is to live clients actively trading the better it is for getting quality clients in, but attendance will also be lower. And so you could put the contests on a scale from broadest attendance but lowest quality (i.e. contests nothing to do with trading like MISS FOREX) to most targeted attendance but higher quality (live account trading with high minimum account opening). Its paramount different models are tested for ROI, but keep in mind your brand’s target audience focus, of course.