Analysing the 2011 Marketing budget allocation problem for the BBVA bank.

1. ▪ Caroline Aston
▪ Ezhilarasan Ravichandran
▪ Vaibhav Sharma
▪ Shobhit Sabharwal
▪ Sruti Seshadri
Presented by
Marketing Resource
Allocation

2. PROBLEM TO DISCUSS
How to allocate 2011
marketing and
advertising resources

3. HISTORY AND BACKGROUND
 “BBVA” Banco BilbaoVizcaya Argentaria, SA
 2nd largest in Spain
 US Market in 2004
 15th largest commercial US Bank
 Financial Crisis in USA
Valley
Bank
Compass
Bank
Guaranty
Bank
BBVA
GROUP
BBVA
COMPASS

4. BANK GOALS
▪ Top 10 in USA
▪ Sunbelt area
▪ Bank position
▪ Customized Solutions
▪ Breakthrough Innovations
▪ 3 line of business

5. CUSTOMERS AND TARGET
53%
12%
10%
11%
6%
5%
3%
% Branches (767)
Texas
Alabama
Arizona
California
Florida
Colorado
65%16%
6%
5%
5%
2%
1%
Percent Deposits
Texas
Alabama
Arizona
California
Florida
Colorado
▪ Mexican immigrants
▪ “Strivers”
▪ 25 to 54 years old
▪ $75000+
▪ Loans & Investments
▪ Lifetime value of account = $800
▪ Cost new customer < $200
▪ Branch customer - retention is higher
▪ Online customers – more profit

6. MARKETING GOALS
• Build awareness and trust
• Support various lines of
business
• Bring in new customers
• Increase total number of
accounts
• Improve satisfaction & retention
of current customers
• Cross – sell

7. BUDGET ALLOCATION PROCESS
▪ Overall sales goals & corporate objectives, growth potential of channels & markets,
review past performance.
▪ More resources in important markets – Dallas, Houston and Birmingham.
▪ Return on Investment on online advertising is trackable.
▪ Effectiveness of offline advertising is difficult to measure.

8. MARKETING BUDGET
 BBVA budget is smaller than that of large national
banks.
 Major part – supporting branches, direct mail,
promotional activities.
 Discretionary budget – advertising & creative
development- is small.
 50% of offline advertising spent on brand building.
 Rest on various product lines and regional
initiatives.
2,111
1,852
525
971
56
1,588
1,341
572 560
50
BoA Chase Wells Fargo Citi BBVA Compass
U.S. Marketing Spending by Major Banks ($ millions)
2008 2009

9. BBVA COMPASS’S ADVERTISING BUDGET BY MEDIA, 2010
https://www.youtube.com/watch?v=DrvCXa8sbh0 https://www.youtube.com/watch?v=5EWHgmAYxIg
4%
1%
7%
21%
53%
14%
BBVA compass’s advertising budget by media, 2010
Newspaper Magazine Outdoor Online TV Radio

10. OFFLINE MARKETING - BRAND BUILDING
 Improve brand awareness & consideration
among potential customers
 2007 & 2008, Compass brand – over 80%
awareness.
 2009 – BBVA Compass brand awareness at
48%
 2010 – target is 53% brand awareness.

11. SPONSORSHIPS
❖ BBVA
 NBA ,WNBA , NBA Development League
 La Liga BBVA
❖ BBVA Compass
 2010 BBVA Compass Bowl
 Texas Bowl
 Bell Helicopter Armed Forces Bowl
 New Mexico Bowl
https://www.youtube.com/watch?v=tHkqpbhduFI

12. ONLINE MARKETING
 The goal was to build online brand and acquire
new customer
 Almost half of the online budget was used for
new checking account customers
 BBVA used both search and display advertising
 Promotional offers (ipod, 100$ cash)
 Effective cost of promotions 100$ for new
online checking customer
 Process of acquiring new customers for an
online checking account
 Allocate same amounts to paid search and
display ads

13. PAID SEARCH
 Buying generic and branded keywords (Google,Yahoo, Bing) using
bid management tool
 Track clicks, click through rates, cost per click and cost per
application
 CTR : Click through rate is equal to the number of clicks
divided by the number of impressions.
 CPC : cost per click is the total cost of a campaign divided
by the number of clicks.
 Position :Average position of the search
 Share ofVoice :Ad shows how often that ad appears as
compared to the total impressions available for the specific
keyword groups

14. DISPLAY ADS AND COMPLEXITY
 Buying advertising space on websites
 Display ads deliver high number of impressions
 Display ads work with advertising network
 Consumers go through multiple exposure
before opening an account

15. Organic Search: Organic search is a term for search
engine results that are naturally generated and not
influenced by commercial relationships between an
organization and a search provider
Paid Search: Paid Search.Also referred to as Paid
Placement, Pay Per Click, and sometimes Search Engine
Marketing, paid search marketing allows advertisers to
pay to be listed within the Search Engine results page for
specific keyword or phrases.

16. Budget allocation for Paid Search marketing for Checking Campaign
Google
$288,000
56%
MSN
$ 37,000
7%
SuperPages
$70
0%
Yahoo!
$ 177,000
34%
Unified Marketplace
$14,000
3%

17. Impressions 11,529,237
Clicks 472,433
App. Started
40,653
4.10%
0.35%
0.06%
Completed 7,107
91.5%
83%
Funnel Report – Paid Search marketing for Checking Campaign
▪ Click through rate was just 4.10%.
▪ 91.5% user dropout from website
without starting account
application.
▪ 83% user doesn’t complete online
application.
▪ Only 7107 Application completed
out of 11,529,237 applications
▪ Avg cost per application is $73

18. AOL; $176,000 ; 28%
Tribal Fusion; $107,000
; 17%
Casale; $90,000 ; 14%
Revenue Science;
$74,000 ; 12%
24/7 Real Media;
$62,000 ; 10%
InterClick; $38,000 ;
6%
Yahoo; $30,000 ; 5%
Traffic Marketplace;
$29,000 ; 4%
Datran Media; $15,000
; 2%
ValueClick; $10,000 ;
2% AdBrite; $3,000 ; 0%
Budget Allocation for Display Marketing for Checking Campaign

19. Impressions 309,274,438
Clicks 139,474
App. Started
18,520
0.05%
0.01%
0.002%
Completed 7,209
Funnel Report – Display Marketing for Checking Campaign
80%
80%
▪ Click through rate was just 0.05%.
▪ 80% user dropout from website
without starting account application.
▪ 80% user don’t complete the online
application.
▪ Only 7209 Application completed out
of 309,274,438 impressions
▪ Avg cost per application is $88

20. 24/7 Real Media,
1,767,393, 4%
AdBrite,
1,217,595, 3%
AOL, 9,165,496,
21%
Casale,
5,152,497,
12%
Datran Media,
1,772,829, 4%InterClick,
3,568,891, 8%
Revenue
Science,
4,992,957, 11%
Yahoo!,
3,017,113, 7%
Traffic
Marketplace,
6,637,292, 15%
Tribal Fusion,
5,051,966, 12%
ValueClick,
1,398,327, 3%
Yellow Pages,
156,771, 0%
Reach of Display Sites and Ad Networks
24/7 Real…
AdBrite, 45%
AOL, 37%
Casale, 43%
Datran Media,
42%
InterClick, 48%Revenue
Science, 45%
Yahoo!,
41%
Traffic
Marketplace,
33%
Tribal Fusion,
41%
ValueClick, 54%
Yellow Pages,
35%
Duplicate Percentage Reach
Duplicate Reach: Number of unique users exposed on that site and any of the other sites in the campaign.
Reach of Display Sites and Ad Networks (Jan – Feb 2010)

21. Causal effect of Display Ads on Paid Search Click and Conversion Rate
▪ A/B Experiment
▪ Users who were not exposed to any
display ads clicked on a paid search
ad , Conversion Rate : 1.26%
▪ Users who were exposed to display
ad through any one of the ad
networks clicked on a paid search
ad, Conversion Rate : 1.48%

22. PLAN OF ACTION
 Budget spending on media is estimated to be in the range of $11m to $14m for 2011.
 Other than that is spending on BBVA Compass specific sponsorship deals.
 Other costs are the major and discretionary budgets.
 The Bank’s goals and the Marketing goals must be kept in mind while framing the next
years budget.
 Though big sponsorships will bring good brand recognition, the shrinking in budget will
bring new challenges.

23. PLAN OF ACTION – BUDGET REASSIGNING
 2010 Budget
 Proposed 2011 Budget
 Online @ 28%
 TV reduce by 3%
 Radio reduce by 4%
 Newspaper, Magazine and Outdoor retain same %
Complex customer thinking requires us to play safe and maintain all forms of media advertising.

24. PLAN OF ACTION – INCREASE ONLINE SPENDING
http://www.pewinternet.org/2015/06/26/americans-internet-access-2000-2015/
In 2010
▪ 18 – 29 yr olds  92%
▪ 30 – 49 yr olds  85%
▪ 50 – 64 yr olds  74%
▪ 65+ yr olds  43%

25. PLAN OF ACTION
 The equity brought to the BBVA Compass brand by virtue of it having a large stable parent
bank BBVA can be marketed.
 BBVA’s La Liga sponsorship will be of great significance in all Spanish speaking communities.
BBVA Compass must make sure to benefit of that in USA.
 Local sports sponsorship deals should also help support brand awareness.
 The company has been through constant makeovers – that doesn’t inspire trust in the
middle of a financial crisis. So positive brand imaging is important.
 Lesser focus on just new checking accounts. Consumer savings are up because of the
Financial Crisis, so that is still main.
 But support for other operations must also go up. Services and other operations offered by
the bank also add to it overall perceived value.

26. PLAN OF ACTION
 All current digital partners can be retained. Duplicity – though unfortunate is necessary.
▪ Free Checking services must continue to be heavily advertised.
▪ Personalized services tie in with the banks’ position between large national banks and
small credit unions – they must also be emphasized.
▪ Easy online banking services (if available) must be advertised.
▪ Location targeting of the Sunbelt region in online marketing must be achieved.
 In offline marketing, it can be localized, but heavy when the sports events are on.
 Cross selling to current customers must be made a focus too.

27. Q & A
ThankYou