This article was written by David Malits, CEO and founder of David Malits Public Relations.
A great deal has been written about the world of forex, binary options, algorithmic trading and so forth. The bad boys of the financial world, gambling, and so on, are just a few of the many superlatives, some gentler, some harsher, which the media make use of when describing these dynamic financial branches.
I shall refrain from going at length into the question of justice or injustice in the various contentions. In general, as in any field, one cannot generalize. Apparently, because of the conduct of just a few companies, an entire industry suffers from a problematic image.
Gambling? 1 out of every 10 restaurants is destined to close down after less than a single year of activity. What transforms restaurants into legitimate business ventures and a more or less solid investment in foreign currency, commodities, and so on, into a gamble?
I am convinced that the answer to this lies in the fact that the forex, the algo-trading and the binary options arenas operate in an environment in which the financial cycles are huge. Whereas nobody really cares if you open a restaurant, whether you succeed or fail, the forex arenas eat away at a market share that the stock markets and banks would prefer to keep for themselves.
The business environment is hostile and this is also the atmosphere that the authorities have generated, which results in hostile media coverage. In every country the patterns of action are of a similar nature. Businesses that do not operate in a legitimate way are used by the authorities as tool against a whole branch of industry.
So what can we do?
The negative media atmosphere generates antagonism amongst investors and the treatment of this issue differs from routine public relations activity.
While PR is intended to be a marketing tool that enables approaching potential end customers, when the media perceives you in a negative manner, you have to concentrate your efforts on changing the media opinion, rather than seeing that the final message is published. It is necessary to regard the reporters and editors as the target audience for a B2B campaign intended to change their opinions.
Plus500 Reaffirms its Commitment to Social ResponsibilityGo to article >>
The information campaign opposite the media should focus on two general channels. The first channel is designed to differentiate the legitimate companies from those that have committed offences, while the second channel is intended to provide a counter-weight to the concept that the financial products under discussion are a casino.
Gaining legitimacy in the media is easier than expected.
The distrustful relations between the media and the companies create non-cooperation and absence of transparency. Consequently the solution is precisely on the other end of the scale. A great deal of transparency by the various companies, inviting editors and reporters to meetings at the company offices and offering partial access to the relevant members of the staff will increase their confidence and as a result the relationships will be better and more productive.
It is obvious to all concerned that you cannot reveal everything and that each company will decide for itself what areas it prefers to restrict. However, in a business environment in which the majority of companies are closed off because of an absence of faith in the media, it is particularly the companies operating in the opposite manner that will benefit from increased confidence and stand out positively on the backdrop of the non-cooperation of the others. Therefore, a company operating in this manner will not divert public discourse from dealing with the industry as an alternative to gambling, but will create for itself an image of a company that complies with the rules and as such, cannot be compared to those companies that defrauded their clients and so on.
The media, for the most part, perceives the forex, binary options and algo-trading companies as a nice financial wrapping for a product that is essentially gambling. This approach should be attacked again and again.
Nobody argues with the fact that any person who does not know what he is doing, takes upon himself far greater risk in implementing business or financial transactions of various kinds.. This is true, in fact, for any aspect of life whatsoever. Opening any business without any previous knowledge can be equivalent to business and financial suicide, just as engaging in sport with no understanding can be harmful to your health and so on.
However, no other area is subject to the criticism that these financial branches face. I have not heard any regulator or authority complain about a gymnasium network that sold its goods to people who have no understanding of sport. This is a free market, where the element of experience and understanding constitutes a factor for success. How does it happen that something so obvious to policy-makers in all other areas is not obvious only in the financial arena?
Changing the common PR approach according to which the media professionals themselves should be perceived as the target audience, argues that the messages concerning transparency and refuting and attacking the labeling of the industry as a casino should be conducted against the various correspondents groups and without anticipation of advertising.
While in PR we are accustomed to an index of success that is expressed in the amount of advertising and extent of the exposure, in this case, the attitude is different. The message needs to first and foremost reach and permeate the news-makers.
The process is slow and needs to be cultivated. The index of success will only appear after many months and will be in the form of balanced articles, casting doubt by reporters on libellous information supplied to them concerning the industry, together with favorable coverage.