With the rising demand for these search terms, the cost of running ads targeting these keywords has soared, significantly increasing the cost of acquiring each new user for these mostly zero-commission brokers working on razor-thin margins, industry insiders said.
“Digital marketing costs have shot up over the last year or so (as) bidding rates on these platforms have doubled and, in some cases, more than doubled,” said Sougata Basu, cofounder of wealth management platform CashRich. “Overall, getting customers to download the app on Google Play Store has gone up significantly as well,” he said.
This surge comes as broking and wealth management platforms shift their focus to app downloads and direct user acquisition after a regulatory crackdown on affiliate marketing channels such as tying up with social media influencers.
A founder of a wealth tech platform shared some details around how prices have gone up for critical Google keywords amid increasing competition to attract investor attention. The term ‘demat account’ can cost as high as Rs 216 from close to Rs 88 while the price of ‘open demat account’ can go up to Rs 334 from somewhere around Rs 114, the person said on condition of anonymity.
Discover the stories of your interest
These are the amounts that brands are ready to pay for each click from a customer.Technology firms, using Google as a sourcing channel for customers, bid on the most used search words by potential customers. The company which bids the highest gets featured on the top of the search results, be it on YouTube or Google’s search page.
Brand names are also bid upon and most of the new-age platforms like Zerodha, Groww, Upstox, Angel One have seen the bid range go up between two to five times.
These prices are constantly changing but are used here as an indication of the larger trends.
Dale Vaz, cofounder of newly launched stock broking platform Sahi, said the cost of getting customers to download a trading application in this crowded market and then to get them to eventually start placing trades actively has gone up significantly.
Industry insiders said the influencer model of acquiring customers and the authorised personnel (AP) model both have gone muted right now after a Sebi crackdown.
Stockbrokers would often enter into financial arrangements with influencers to offer added waiver in account opening fees or such when they would use their promo codes.
Sebi has brought stringent rules for social media influencers who promote certain platforms to their followers over others.
“Platforms are back to the basics where they need to pay Google to stand out in the crowded wealth management app market,” said a senior marketing executive at one of the largest broking firms in the country.
Interestingly, many firms never had large marketing budgets but relied on affiliate channels to attract users through word of mouth. Sebi cracked down on such channels, too.
The stock trading market is small and there are many well-funded players who are competing for this cohort of customers, the executive quoted above said.
As per data shared by the NSE, there are less than 50 million active trading customers in the country.
“Most of the traction that we see comes from Google and YouTube… There is limited onboarding that happens via Twitter and some via LinkedIn. Facebook is not that great a channel in my experience,” said the founder quoted anonymously above.
In a bid to diversify their acquisition channels, most of the large brokers invest heavily in search engine optimisation (SEO)-backed content.
Zerodha, for instance, is actively investing in training modules through its Varsity programme. Its ZConnect blog also helps explain the stock markets to untrained users.
Groww also has a large content team, which constantly churns out YouTube videos that often draw a lot of views.
