What you need to know about Google ad restriction on FX and CFDs

What happened?

Major media companies like Facebook, Google, and Twitter have been recently releasing the news stating that they will ban various investment products promotions on their platforms.In the wake of increased public pressure over US election meddling by the Russians and Facebook involvement in facilitating this, ICO scams and other “fake news” on the platform, Facebook was first to come out with the ban on crypto ads.
Twitter followed and announced ban on crypto ads. According to company’s announcement, all ads related to initial coin offerings (ICOs), token sales, exchanges and wallet services – excluding public companies listed on major stock markets – will be removed from the site starting March 27th, 2018.
Google announced that starting June 2018, advertisers who promote restricted financial products (Contracts for Difference, rolling spot forex, financial spread betting, and synonymous products) are allowed to advertise through AdWords, but they must be certified by Google, and their products, landing pages, and ads must meet all local legal requirements of the country they want to get certified for.

Why such severe measures?

The easiest to explain is probably ban on cryptos. MIT study of the ICO market estimates that $270 million to $317 million of the money raised by coin offerings has “likely gone to fraud or scams.” As these findings become more apparent as the number of low quality projects continued to grow in 2017 and advertising practices for some ICOs were crossing the line, regulators like SEC in the US and many others around the world have started to take action.
This created spiral effect and negativity from mainstream media didn’t help, making outlets like Facebook, Twitter and Google to take harsh stances on crypto advertising.

So why is Google mixing FX and CFDs into this?

We won’t know the exact reasons, but I probably won’t be far from truth if I say that Mifid2 and major adoption of cryptocurrencies by FX community had to do with this.

How will Google ban work?

It is unclear at this point how exactly Google ban will be implemented as the guidelines are yet to be published. However, we have already been seeing some of the local regulatory enforcement by google, for example, when trying to promote webinar in Russian language, we have faced limitations on certain keywords due to local laws regulating the financial industry in Russian Federation.

How will it impact the industry?

For the industry, these changes likely mean that soliciting clients will become more difficult as google will require passing of Google certification for all regulated jurisdictions. Practically, it means that if you are an offshore broker targeting UK residents without an appropriate licensing permissions, you will likely need to go back to the drawing board with your marketing plan.
On the bright side, for everyone else who acquires appropriate certifications from Google, cost per keyword will likely go down and you will be getting better value for your marketing dollars.
There are also severe implications for affiliate marketers as ads for aggregators and affiliates for FX and CFDs will no longer be allowed to serve starting in June 2018. Many brokers in the space use affiliates to drive most of its traffic and they will need to revisit their practices.
There are also certain requirements that will be enforced by Google in terms of financial product disclosure, fee disclosure and licensing disclosure.

What can you do?

In my personal opinion, if implemented correctly, this change will bring more transparency into marketing practices in the industry and will ultimately make clients take informed decisions about the products to invest and brokers to sign up with.

Ultimately, those firms that have marketing strategy centered around organic search and quality content will be coming out as winners as they will benefit from higher traffic to their high ranking pages and resourceful content. You can contact me to learn more.