BBVA Compass: Case Study

Jason Miller
Digital Marketing
February 9, 2014
Franklin University

BBVA Compass: Case Study

EXECUTIVE SUMMARY
The financial crisis that began in 2008 and peaked in 2010 put a strain on nearly every
bank throughout the U.S., and BBVA Compass was not an exception. Simply put, consumers
were saving more and spending lessa situation that is not favorable towards banks. Due to this
reality, BBVA Compass conducted a performance review of its marketing efforts and decided
the marketing budget for 2011 had to be the same or less than the previous years budget. The
ultimate goal was to allocate the limited budget in the most effective way.
The recommended course of action for BBVA is to increase its level of online advertising
as it is much more cost-effective than offline advertising. More and more consumers are going
online to obtain information, and BBVA could greatly increase its brand awareness with more
emphasis on its online marketing channels. With a limited marketing budget, BBVA needs to do
more with less, and focusing advertising efforts on digital strategies is going to be the key.

BBVA Compass: Case Study

BBVA Compass: Case Study

Statement of the Problem
After a series of recent acquisitions, BBVA Compass is now currently the fifteenthlargest commercial bank in the U.S. According to chief marketing officer, Frank Sottosanti,
however, the goal is become one of the top ten largest U.S. banks. But there is a major dilemma
that Sottosanti and other top executives are faced withdetermining how to increase its
customer base with a limited marketing budget due to the recent financial crisis (Davies-Gavin &
Gupta, 2012).
Sottosanti has explained that BBVA Compass will remain in its current geographical
region, as that seems to be the area with the highest growth potential. BBVA is positioned as
regional bank, offering personal banking like a credit union while also being able to achieve
economies of scale like larger banks such as Bank of America and Wells Fargo. In the short
term, Sottosanti would like for BBVA to increase its brand awareness and gain back consumers
trust in the financial system, specifically in the BBVA brand. Long term objectives would
include retention of current customers and gaining enough new customers to crack the top ten list
of largest U.S. commercial banks (Davies-Gavin & Gupta, 2012).
The most critical decision facing Sottosanti would be determining the marketing budget
allocation between various markets and media outlets. BBVA currently allocates roughly 80% of
its marketing efforts on offline media, which certainly is more costly and difficult to track than
online advertising. As for markets, BBVA focuses primarily on its largest ones in Birmingham,
Dallas, and Houston (Davies-Gavin & Gupta, 2012).

BBVA Compass: Case Study

Causes of the Problem

Changes in the economy are inevitable, and the adversity facing the financial industry in
2010 induced nearly every company within this industry to reconsider its business operation
processes and budget allocations. Sottosanti and other top executives at BBVA have a vision to
become one of the top ten largest U.S. banks, and in order to achieve that goal it must increase
the effectiveness and efficiency of its marketing effortsboth online and offline. The ultimate
goal is to increase brand awareness and substantially increase the customer base, so BBVA must
turn over every stone in regards to its marketing strategy.
Before a consumer will place trust in a brand, he or she must know about the brand. Once
a consumer is made aware of the BBVA brand, the first step towards gaining the customers
trust and patronage will be complete (Stokes, 2011). Even larger banks such as JPMorgan
Chase and Bank of America focus on specific markets, and it would be wise for BBVA to do the
sameas it cannot realistically satisfy customers in every part of the U.S. In fact, convenient
branch locations are the number one reason a customer will choose a particular bank (DaviesGavin & Gupta, 2012).
The most important issue BBVA must concern itself with is the allocation of its
marketing budget between online and offline advertising. Sure, offline advertising campaigns are
necessary and ensure maximum brand exposure (Stokes, 2011). However, BBVA currently
allocates nearly 80% of its marketing dollars towards offline advertisingwhich is a bit
outrageous considering the growth in the digital marketing (Davies-Gavin & Gupta, 2012).
Online marketing is also considerably cheaper, and BBVA could potentially reach a much wider
audience by increasing expenditures in this area (Stokes, 2011).

BBVA Compass: Case Study

Decision Criteria and Alternative Solutions

There are a wide variety of approaches that Sottosanti could take in regards to attempting
to achieve the ultimate goal of BBVA being one of the top ten largest U.S. banks. However,
there are two alternative solutions that would be most advisable. The first involves allocating a
larger portion of the marketing budget towards online channels, and less towards offline
mediums. The second option would be for BBVA to broaden the age group and income level of
its target market, making its services more appealing to a wider audience.
When first considering the option to increase online advertising activity, the fact that
revenue levels from online advertising have been growing at enormous rates over the past year
would seem to make it an effective solution (Taintor, 2013). According to an Internet
Advertising Revenue Report by the IAB, in the first half of 2013, online advertising revenue
totaled $20.1 billion, an 18-percent increase from the same period in the previous year (Taintor,
2013). Additionally, mobile advertising is one of the hottest trends in the digital marketing
industry, as improvements in the usability of mobile apps and websites have essentially
revolutionized the lives of many consumers (Stokes, 2011). With a greater focus on digital
marketing, BBVA could not only reduce costs but substantially increase its brand awareness.
As for the option of broadening its target market, BBVA could also gain a larger
customer base if its marketing efforts were tailored in the right way. That is, if BBVA was to
market its banking services to college students, it would need to communicate a different
message and introduce new services. Larger banks such as Bank of America and Chase offer
special checking accounts for both high school and college students, for example (Zhen, 2013).
The problem with this solution, however, is that BBVA would be altering its target market
considerablyand quite frankly would be creating many more issues to tackle.

BBVA Compass: Case Study

Recommended Solution, Implementation, and Justification

When Sottosanti and other top executives meet together to discuss the plan of action with
its marketing budget in 2011, the primary goal should be to place a greater emphasis on digital
marketing. This decision would allow BBVA to accomplish exactly what Sheiludis Moyett,
Director of Brand and Corporate Advertising, explained to Sottosantido more with less
(Davies-Gavin & Gupta, 2012). To implement the most effective online advertising strategies,
BBVA will need to analyze the performance of both its search and display advertising in recent
years and attempt to improve its website rankings by focusing on search engine optimization.
Although not discussed in the case study, one online advertising platform BBVA should
seek to improve its performance on is social media. Advertising on social media is essentially
free, and it allows for consumers to spread it to other consumers by sharing tweets or posts.
Social media is a highly effective platform for increasing brand awareness, one of the main goals
for Sottosanti and BBVA (Stokes, 2011).
As for a contingency or backup plan to this recommended course of action, BBVA could
simply cut down on its paid search advertising and focus on social media advertising if its budget
for marketing activities turned out to be lower than expected. Regardless, BBVA should aim to
allocate somewhere in the 30-40% range of its marketing budget towards online channels. This
would certainly be a significant increase from the roughly 20% it allocated to online advertising
the previous year, but it would allow BBVA to increase its brand awareness in a more efficient
manner and better attain its goal of becoming one of the largest ten banks in the U.S.

BBVA Compass: Case Study

References
Davies-Gavin, J. & Gupta, J. (2012). BBVA Compass: Marketing Resource Allocation [Case
Study]. Boston: Harvard Business School Publishing.
Stokes, R. (2011). eMarketing; The essential guide to digital marketing (4th ed). Quirk
eMarketing (Pty) Ltd.
Taintor, D. (2013, October 9). Iab study: Online ad revenue continues double-digit growth.
Retrieved from http://www.adweek.com/news/advertising-branding/iab-study-online-adrevenue-continues-double-digit-growth-153007
Zhen, S. (2013, June 21). Comparing student checking accounts at top 10 banks. Retrieved from
http://www.mybanktracker.com/news/2013/06/21/comparing-student-checking-accountstop-10-banks/