BBVA Compass Case – Digital Advertising, Search, Display & Attribution

BBVA Compass case — central problem

How should BBVA Compass evaluate and allocate its advertising budget across offline media, paid search, and display advertising while pursuing growth?

BBVA Compass's growth goal

Become one of the top 10 U.S. banks while maintaining its geographic focus in the Sunbelt

BBVA Compass's U.S. position at the time of the case

15th-largest U.S. bank, with more than 700 branches and approximately $49 billion in deposits across seven Sunbelt states

BBVA target customer: "strivers"

Young professionals who were aggressive and anxious about money and represented an attractive target for BBVA's financial products

Age/income profile associated with BBVA's target customers

Ages 25–54 with household income above $75,000

Why were strivers attractive beyond checking accounts?

They had broader financial needs that could include products such as loans and investments

Approximate five-year value of a new checking-account customer

About $800

BBVA's customer acquisition cost target

Less than $200 per acquired customer

How were most new checking accounts opened?

About 80% were opened through branches

How many new checking accounts were opened online?

About 5%

What does the 80% branch vs. 5% online split suggest?

The channel where the final account is opened does not necessarily reveal every marketing channel that influenced the customer beforehand

2010 share of BBVA's advertising budget devoted to online advertising

21%

Approximate 2010 online advertising budget

$1.22 million

Main forms of BBVA's online advertising

Display advertising and paid search

Approximate display advertising spending

$677,000

Approximate paid-search spending

$545,000

Role of paid search in BBVA's strategy

Capture customers who are actively expressing intent by searching for relevant banking products or the BBVA brand

Role of display advertising in BBVA's strategy

Build awareness and reach customers earlier in the decision process while potentially assisting later conversions

Search vs. display — customer journey distinction

Search tends to capture existing intent closer to action; display can create awareness or reinforce the brand before a later search or conversion

Approximate direct CPA for paid search

$73

Approximate direct CPA for display advertising

$88

Which channel appeared more efficient using direct CPA alone?

Paid search, at approximately $73 per acquisition versus $88 for display

Why shouldn't BBVA automatically move all display spending to search?

Direct CPA does not capture display's potential influence on later searches and conversions, so measurable direct response is not the same as total effectiveness

BBVA case lesson: measurability vs. effectiveness

A channel that is easier to measure is not necessarily the channel creating all of the value

Why can last-touch measurement over-credit paid search?

A customer may first encounter BBVA through display or another channel and later search for BBVA; assigning all credit to the final search ignores earlier influence

What should BBVA consider beyond direct CPA?

Customer value, reach, duplicated reach, assisted conversions, and the customer's full path to conversion

Approximate duplicate reach across BBVA's display networks

About 41%

Why does duplicated display reach matter?

Using multiple networks can expand reach, but substantial overlap means BBVA may repeatedly reach some of the same users rather than entirely new audiences

Why might BBVA still use multiple display networks?

Different networks can provide additional reach and access to audiences, even though duplication must be considered

AOL display network direct CPA

Approximately $60

Datran display network direct CPA

Approximately $238

What would a direct-CPA-only comparison imply about AOL vs. Datran?

AOL would appear much more efficient because its direct CPA was approximately $60 compared with Datran's approximately $238

Why is Datran an important attribution example?

Despite a poor direct CPA, customers exposed through Datran later converted through paid search at a notably higher rate

Later paid-search conversion rate after Datran display exposure

Approximately 3.31%

Later paid-search conversion rate without display exposure

Approximately 1.26%

What does the Datran result suggest?

Display exposure may assist later paid-search conversions, meaning direct display CPA can understate display's contribution

Why is the Datran evidence important but not a reason to ignore CPA?

It shows that direct CPA is incomplete; BBVA should evaluate direct efficiency alongside assisted effects rather than relying on either measure alone

Approximate paid-search click-through rate

4.1%

What percentage of people who clicked a BBVA online ad began an application?

Approximately 10%

HW3: Which search term/campaign would maximize clicks with a $5,000 budget?

BBVA Brand

HW3: Which publisher was less costly for a completed application?

SuperPages

Can all accounts opened offline be attributed to offline advertising?

No; customers opening accounts at branches may have been influenced by online or other advertising beforehand

Why is the account-opening channel an imperfect attribution measure?

It identifies where the conversion was completed, not necessarily which marketing touchpoints caused or influenced it

Online-customer retention rate

Approximately 55%

Branch-customer retention rate

Approximately 65%

How did online and branch customers differ in retention?

Online customers had lower retention: about 55% compared with 65% for branch customers

How did online customers differ in fees?

Online customers paid higher fees

How did online customers differ in balances?

Online customers tended to maintain lower balances

Why shouldn't lower online retention alone determine channel value?

Customer value depends on multiple outcomes, including fees, balances, acquisition cost, and retention rather than retention alone

HW3 correction: Did online customers have higher retention than branch customers?

No; online retention was about 55% versus 65% for branch customers, although online customers paid higher fees

Average CPA across BBVA's display and search advertising

Approximately $81

Was BBVA's average online CPA below its acquisition-cost target?

Yes; the approximately $81 average online CPA was below BBVA's target of less than $200

Offline and online advertising relationship in the case

They should be viewed as complementary rather than automatically treated as substitutes

Why can offline advertising still matter when online performance is easier to measure?

Offline advertising can create awareness and influence customers who later convert through online or branch channels

Was BBVA's 21% online allocation obviously inappropriate?

No; the case results support maintaining a mix while improving measurement rather than making a major shift based only on directly measurable CPA

Display vs. search budget implication

Search showed stronger direct-response efficiency, but display's awareness and assisted-conversion effects support maintaining a role for both

Key attribution problem facing BBVA

BBVA could observe where customers clicked or ultimately converted more easily than it could observe how earlier exposures influenced those later actions

What should BBVA improve before making major future budget shifts?

Cross-channel attribution and measurement of the entire customer journey

2011 budget principle

Optimize the mix using direct efficiency plus assisted effects, customer value, reach, and duplication rather than simply funding whichever channel has the lowest last-touch CPA

BBVA case — big picture

Search captures intent and produces strong measurable direct response, while display can create awareness and assist later conversions; BBVA needs whole-journey attribution to allocate its advertising budget effectively