Individual Case study BBVA

Laura Carranza
Mayo 6-2018

SWOT analysis:

Strengths: Weaknesses:

- 15th largest bank in the USA, very -The top ten largest banks control 46.6%
dominant of market share

-$755 Billion in assets owned by parent -The financial crisis has reduced revenue
company worldwide in retail banking considerably

-Already a household name with Mexican -32% online brand awareness,

immigrants meanwhile, nearest competitor is at 78%

-Official bank for NBA and WNBA

-Agreement with ESPN

Opportunities: Threats:

- Significant population growth to take -Competitors are very powerful

place in sunbelt region
- Currently BBVA only allocates 5% of
their budget to internet growth so there
is room for improvement
-Small enough to offer customized
solutions while big enough to offer break
through innovations
established brands with significantly
higher budgets for ad
-Brand loyalty
-Regulatory changes are estimated to
reduce fees in the banking industry from
6-15 billion

Problem:

BBVA Compass wants to achieve the following marketing goals with limited resource
allocations:
* Building awareness and trust in the brand.
* Improve satisfaction and retention customers and cross sale to them.
* Bring in new customers and increase total number of accounts through online and
offline marketing.
Assignment questions:

1. What is the role of offline and online advertising in acquiring checking

account customers for the bank?

Offline advertising:

Its main objective was on brand building and this was done through sponsorship. This
type of advertising includes changing the trade name to BBVA Compass, into others.
There was a multiyear sponsorship deal with the National basketball association, also
with the WNBA, and the NBA development League in the US, Spain and Puerto Rico.
They also get a sponsorship agreement with one of Europe´s top football leagues and
with ESPN.

Online advertising:

This type of marketing was focused in acquiring more customers. BBVA Compass used
search and display advertising. It was usually accompanied by a promotional offer to
encourage customers to open a new account. The company paid mayor search engines
like Google, Yahoo! And Bing. They buy consumer checking, checking account, free
checking etc. Display advertising entailed buying advertising space on websites that
would lead customers to the BBVA website.

2. In 2010, the bank allocated $1.22 million or 21% of the total ad Budget to
online advertising for acquiring checking account customers (see Tables 2
and 3), while allocating the rest of the Budget to offline marketing efforts for
this account. However, only 5% of the new checking account customers
came from the online channel, while offline branches accounted for 80% of
the new checking accounts. Is the 2010 advertising Budget allocation
between offline and online media appropriate?

On the general vision it might look like online spending yield is less than the one of
offline spending. It is appropriate only if the cost per acquisition is less tan 100. For
offline its 18,9, and for online marketing its 80.5. As reach of the online marketing is
huge, it’s safe to spend on online. In the case was mention that consumers go through
multiple exposures before opening an account.

Online advertisement helps gaining consumer awareness, which is the primary goal of
the organization.

3.Why did BBVA sign multiyear sponsorship deals with NBA and ESPN? Do you
agree with this decision?
  To increase the brand recall of the company. As changing the name of the bank,
the awareness of the company was not up to the mark in the US. The company,
therefore, correctly signed a multiyear sponsorship deals with NBA and ESP.
 With these agreements with such known and popular entities the company
would be able to create the desired level of brand awareness amongst the
customer segment of the company.
 People love sports in the US, particularly NBA. It is the most watched league in
the country. So, the company´s association with the sport will definitely
increase the brand awareness.
 BBVA advertisements being advertised or aired between the prime time all
over the US would significantly affect the brand awareness levels for the bank.
Marketing activities of such nature are credible and are good for the company.
 The company has learned from its success in Spain by associating with La Liga.

4. What are the various steps in the online acquisition process and how can the
bank improve this process?

1. People go online and search for checking account

2.There are 2 types of online marketing that company does-Paid search and Display
ads.

3. Customer applications.

4.Submission of completed applications.

5. Bank verifies to ensure the consumer meets a minimum credit score and able to
pay any potential overdrafts and account service charges

6.Opening of new checking accounts

7.The consumer needs to fund the account by depositing money within certain time
period to avoid cancellation

5. What is the effective acquisition cost and lifetime value of customers acquired
through the online channel?

BBVA follows both offline and online to acquire the customers. Channels include
branches, website, telephone and direct mail. Break up for source of new checking
account as follow:

 80% of the new checking accounts had been set up through BBVA`s branches
 15% through telephone and direct mail
 5%came from the on-line channel

BBVA´s goal was to keep the customer acquisition cost below $200 per new account.
The bank considered acquisition cost between $100 and $15o to be good and bellow
$100 to be great. The online channel has the least acquisition costs of all; the effective
cost of this promotion was about $100 for each new online checking customer.

The average lifetime value of a new checking account, with expected life of five years,
is approximately $800.

6. What is the role of display and search advertising in acquiring new checking
account customers? Is the 2010 advertising Budget allocation between display
and search appropriate?.

The largest portion of BBVA´s paid search budget was allocated for Google, as it had
the biggest share of search queries. Words purchased included generic keywords,
such as “consumer checking”. Buys for these keywords were analyzed and tracked
through the big management tool, which evaluated competitive prices, search volume
and share of voice.

Display advertising involved purchasing advertising on websites that BBVA`s

potential customers were expected to visit. BBVA Compass worked with advertising
networks and directly with publishers and portals to place their ads

The 2010 budget allocated 55% ($677,000) of its resources to display advertising and
45% (%545,000) to search advertising. While display ads delivered a much higher
number of impressions, they generated fewer clicks and were more expensive than
the search ads-cost per application for display ads was $88 compared with $73 fir
search ads. BBVA would make a better use of its money if a higher portion of its online
marketing budget would be allocated to search ads, which appears to be more
effective.

7.Is the Budget allocation among various search engines appropriate?

The three main search engines are: Google, Yahoo and Bling according with the BBVA´s
Compass case.
The presence of Google, MSN and Yahoo! Enables them to be allocated the biggest sharing the
Media Spend Budget among other search engines. The allocated budget was distributed
among Google (55%). Yahoo! And MSN (7%) and the remaining, among other unidentified
competitors. The two most popular are Google and Yahoo!

The total budget allocation of $516,000, excluding the media spend of Superpages that is $70,
it generates less number of impressions (116,922) and the number of clicks that is (1,410),
this results are because there is not enough credibility on the website.

8. Why is the bank spending money across various display ad networks? Which
ad networks are working better than others are and would you change the
Budget allocation among them?

Each display ad network provides reach across multiple publishers and domains. So
the bank is spending money across various display ad network.

AOL display ad network is the one working better, as it has better reach compared to
other display ad networks. Also it has a conversion ratio of 0.003% (Applications
completed/impressions) along with less cost of application.