Professional Documents
Culture Documents
BBVA Compass:
Marketing Resource
Allocation
Alexander J. Singleton
June 1, 2017
Strategic Options 4
Tactical Plan 5
Works Cited 6
Appendix 8
US Marketing Spending by Major Banks 8
BBVA Compasss Advertising Budget by Media, 2010 8
Online Marketing for Checking Accounts 8
Executive Summary
The Great Recession of 2008 and the ensuing economic fallout forever changed
modern-banking- practically overnight. Responsible banks acquired the irresponsible
banks as stewards of a new financial-system re-designed to become too big to fail,
fortified by regulatory overhaul and Basel III risk-based capital ratios that might
otherwise preclude the next market-bubble too good to be true, for the next Dodd-
Frank. Although consolidation engendered increased competition for accounts between
the Big-Five national banks, the regional banks limitation of resources demanded
creative marketing strategies for tactical execution on-line in order to shore-up the
fragmented landscape of more than 15,000 banks collateralizing $10 T dollars in assets
(Gupta, Sunil, and Joseph Davies-Gavin). As of 2010, the Spanish Multinational-
Corporation (MNC), Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), was the second-
largest bank in Spain, reporting 48 million customers and 104,000 employees in over 30
countries, in addition to a growing footprint in the American Sunbelt boasting over 700
branches and $49 B in deposits (Gupta, Sunil, and Joseph Davies-Gavin). Initially,
BBVA leveraged their distinct advantage at the expense of their American competitors-
language- focusing on Mexican immigrants but later re-defining their target demographic
as strivers who are both aggressive though anxious with personal-finances, 25-54
years-old, netting a disposable household income i/a/o $75 M in order to achieve their
BBVA objective in becoming one of the top-10 banks in the US by-deposits (Gupta,
Sunil, and Joseph Davies-Gavin). Positioned as a traditional, community credit-union
while maintaining economies of scale with financial-innovation and technology, BBVA
on-line offerings and solutions gave Big-Five legacy-systems a run for their customers
money by reallocating budgets shifting away from conventional marketing-strategies
offline with traditional channels like televisions and radio to inbound-driven, search-
engine marketing (SEM) online. According to Sheiludis Moyett, BBVA Director of Brand
and Corporate Advertising, BBVA efforts successfully achieved their goal to improve
brand-recognition from 48% in 2009 to roughly 53% (Gupta, Sunil, and Joseph Davies-
Gavin).
1. Roughly 10% of online visitors who click on the paid-search or display-ads files
an application.
2. Less than 30% of the people who start an application actually complete it.
3. Upon submission, only 80% of the previous-pool are approved compared to the
95% to 100% approvals created at local branches- two-thirds of which actually
fund the account within the required time-frame.
The total-expense for display and paid-search is approximately $3 MM, or roughly 30%
of the total on-line budget allocated from the total-marketing budget i/a/o $56MM; the
overall cost per click for checking-account application nets i/a/o $81.00- the cost is
simply too high if less than 3 applications per every 100 initiated are approved (Appendix
3). Furthermore, the cost per acquisition (CPA) amounts to $251.00, when factoring in
the promotion (e.g. iPod Nano), which is 150% more than the ideal cost ($100.00 per
account), defined by Mr. Moyett (Appendix 4).
Strategic Options
Assuming roughly $10 MM is the annual-budget for online advertising, there are several
proven alternatives yielding significantly higher Return on Investment (RoI):
Tactical Plan
Simply-stated, the BBVA online marketing model isnt achieving a sustainable RoI in
consideration of how many new checking-accounts are approved per every 100 clicks: 3,
which amounts to $81.00 per click, which doesnt efficiently scale when factored for total
CPA ($251.00) against benchmark ($100.00 to $150.00) (Appendix 3 | Appendix 4).
Furthermore, the aggregate marketing-budget should be adjusted to reflect the evolution
of measured-media; again, citing the Google study, the average mobile-phone user
spends approximately 177 minutes on their phone per day; that is 177 minutes of
attention less to divide between television and radio.
"Realizing the Potential of Mobile Measurement." Think with Google. N.p., n.d. Web. 01
June 2017
Appendix
a.
a.
a.
4. (0.8) * (0.67) =0.54 | 81/0.54 = $151 | $151 + $100 = $251.00 CPA