Bbva 652w1s

Marketing Management II MNG615 Case Study – BBVA Com

Submitted by Group No 1 – Section A Suruchi Mhasde (179278036) Vishnu Prakash B (179278038) Sri Sharan (179278052) Navya Kiranmai (179278063) Medikonda Pavankumar (179278071) Athukuri Gopichand (179278106)

1) What is the role of offline and online advertising in acquiring checking for the bank? Offline advertising: The offline advertising was mainly focussed on brand building and this was done through sponsorship. The offline advertising included changing the trade name to BBVA Com among others. Sponsorship was mainly used for offline advertising. They had signed a multiyear sponsorship deal with the National basketball association (NBA), also with the WNBA and the NBA development League in the US, Spain and Puerto Rico. They also signed a sponsorship deal with La Liga, one of Europe’s top football leagues with football giants like Real Madrid and FC Barcelona. They also signed a deal with ESPN Regional Television, Inc. (ERT), a subsidiary of ESPN to become the title sponsor of major college league football which is one of the most popular sports in the US. Online advertising: Online marketing was more direct in the sense of acquiring more customers. BBVA Com used both search and display advertising. The advertising usually was accompanied by a promotional offer to encourage customers to open a new . The company paid major search engines like Google, Yahoo! and Bing for the search advertising. They buy generic keywords like consumer checking, checking , free checking etc. Display advertising entailed buying advertising space on websites. These displays would lead customers to the BBVA website directly where they can find the application for opening a checking although the conversion rate was not 100%. ment Type Paid search Display Marketing

Expenditure $516,000 $637,000

Conversion Rate 1.5% 5.1%

Cost per application $73 $88

2) Is the 2010 advertising budget allocation between offline and online media appropriate? On the peripheral it might look like online spending yield is less than that of offline spending. But as far as the cost per acquisition is less than 100, it’s beneficial for the organisation. For offline it’s 18.9, whereas for online it’s 80.5. As reach of the online marketing is huge, it’s safe to spend on online ments.

Medium

Online

Offline

%checking

5%

80%

Ad Spending

1222000

4597048

Actual Spending

1153000

4337476

checking

14316

229056

Cost per Application

80.5

18.93631

Retention Rate Ad Network AOL Revenue Science Casale

0.55 Media Spent 176000 74000 90000

0.65 Cost Per Application 60 86 102

%Reach 21% 11% 12%

Tribal Fusion Datran Media AdBrite Yahoo ValueClick

107000 15000 3000 30000 10000

107 238 200 172 156

12% 4% 3% 7% 3%

In the case it has clearly mentioned that consumers go through multiple exposures before opening an A consumer may see a display ad on site A, another on site B, do a search on Google and finally click on a paid search in Yahoo to open an . So, we may assume that online ads help a lot for consumer awareness which is the primary goal for the organisation. But we can tweak some of the online spending into other online platforms. Cost per application for Adnetworks such as Datron Media, Adtrite, are above 200 which is above our desired limit, and for yahoo it’s 172. The total spending for these three amounts to 48000.So we may divert this to Ad networks as AOL, Revenue Science.

3) Why did BBVA sign multiyear sponsorship deals with NBA & ESPN? Do you agree with these decisions? 

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The major goal of offline advertising was to build brand awareness and improve consideration among potential bank customers. From the data provided in the case we can see that in 2007 and 2008 Brand Awareness for the Com Bank was over 80%. In 2009, Com bank acquired BBVA brand name to maximize the global awareness. But this adoption of new name further affected their image as the brand awareness dropped down to 48%. As a result the company had laid down the goal of achieving 53% Brand Awareness in 2010. Thus, BBVA got into a multiyear sponsorship deals with NBA & ESPN. As BBVA ments aired between prime-time slots all over the US would help them in achieving maximum reach through offline mode. Also from a press release statement made by BBVA it is evident that they thought this was the best platform to display their core values to their target customers which were ion, teamwork and fair play. As Sports leagues are the best medium to reach to the ionate audience who will associate with their values and build trust in them.

I do agree with these decisions on the basis of following facts that are given in the case. 1. One of the goals of the company in December 2010 was to instill TRUST in their BRAND. As during the then prevailing economic conditions in US people had lost faith from financial institutions. 2. Also the company has a prior engagement with Spain’s top professional soccer league-La Liga which might have proved fruitful in creating brand awareness in Spain and hence they must have taken a similar decision in US.

4) What are the various steps in online acquisition process and how can the bank improve the process? Ans. BBVA Com uses both search and display advertising accompanied by promotional offer to encourage customers to open a new checking . Various steps involved are: 1. Consumer searches online for checking on Google or encounter a display on AOL or Yahoo 2. Clicking on Paid search or Display ad takes him/ her to the bank’s landing page 3. Consumer starts filling an application 4. Completed application gets submitted and has to be approved by the bank 5. Bank verifies to ensure the consumer meets a minimum credit score and able to pay any potential overdrafts and service charges 6. Once approved, Consumer opened a new checking and BBVA acquired a new client 7. The consumer needs to fund the by depositing money within certain time period to avoid cancellation Observations: 

Only 10% of online visitors who click on Paid Search or Display ads start an application process

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Others might be curious about offers but might have felt their branch locations inconvenient for them

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Less than 50% complete the application filling process

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Among the submitted applications, 80% get approved

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Only about 2/3rd of online s approved get funded on time

Some of the steps that can improve the process are:

 Improve online application process - making it more interactive and elaborative to consumers  Specify what information consumers need to provide for the online application and what credit score is needed to be approved by the bank  Provide constant reminder to consumers for funding the within the specified time frame  Asking the consumers pertaining what can be improved in of the application process, what made them inconvenient to maintain minimum deposit etc.,

5) What is the effective acquisition cost and life time value of customers acquired through the online channel? BBVA follows both offline and online channels to acquire the customers. Channels include the branches, website, telephone and direct mail. So, new checking s come from different channels. Break up for source of new checking s as follow:   

80% of the new checking s 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 . The bank considered acquisition cost between $100 and $150 to be good and below $100 to be great. The online channel had the least acquisition costs of all - on average; the effective cost of these promotions was about $100 for each new online checking customer. In the banking industry, the average lifetime value of a new checking , with expected life of five years, is approximately $800. However, the net annual income generated by online customers is slightly higher than returns from clients using the local branch. 6) Why bank is spending money across various display Ad network? Each display ad network provides reach across multiple publishers and domains. So the bank is spending money across various display ad network. Display ad network that is working better: AOL display ad network has better reach compared to other display ad networks. And it has a conversion ratio of 0.003% (Applications completed/impressions) along with less cost of application. Change in Media Spend: We reduce the funds allocated to Tribal Fusion as the reach through that network is only 4%. We can allocate additional funds to Traffic Marketplace which has a reach of 15%(the second highest among the ad networks).