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Bbva Compass

In: Business and Management

Submitted By ausmans
Words 492
Pages 2
Ahmed Usman Sheikh 2012400845
BBVA Compass Case Analysis
BBVA Compass, the 15th largest commercial bank in the U.S. in 2010 had to effectively utilize its limited budget to meet its strategic objectives using offline and online marketing mediums. Offline advertising mainly consisted of advertising through the traditional mediums such as newspapers, magazines, outdoor, television, radio and sponsor sporting events like NBA and other regional American football events in their most important markets. The primary reason for offline marketing was to connect with the bank’s customer base and build brand awareness and improve consideration among potential bank customers in the core markets such as the Sunbelt region. Online advertising on the other hand consisted of advertising on the internet through both search and display advertising on websites that generated traffic of users from the target market. The main goals of online advertising were to build online brand awareness and acquire new customers for various lines of business (such as new checking account customers.) Through historical data the company had evaluated that the life time value of new checking account (over 5 year period) was $800, hence the objective of the company was to minimize its customer acquisition cost, which the bank effectively managed to do using online advertising.
The 2010 budget split between offline and online advertising budget was 79% and 21% respectively. Considering the rise of social media and digital technologies enablers, BBVA Compass should have increased the share of online advertising to 35%. The shifting demographics of the target market meant that many more customers were spending greater time online and since online marketing served the purpose of increasing brand awareness and attracting new customers at the least cost, it would result in overall better return on investment for BBVA Compass. Within online advertising search and display ads had different roles in the acquisition of new checking account customers. Since paid search entailed in buying relevant keywords for different search engines such as Google, Yahoo and Bing, customer willingness to actually complete the process of establishing relationship with the bank was much higher as compared to display ads. Display ads on the other hand served the purpose of establishing brand presence of BBVA Compass on major internet portals such as AOL and helped in enhancing brand awareness hence having a much higher number of impressions but lower click through rate and also attracting new customers.
At present the online marketing budget split between paid search and display ads is 45% and 55% respectively. If you look at the figures, cost per application of search is much lower as compared to display ads ($73 vs $88) and both mediums almost have same number of completed applications. So in terms of acquiring new checking account customers, it would be prudent to spend more money paid search rather than display ads and hence I suggest that 60% of budget should be spent on search whereas 40% should be spent on display ads.

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