Title:
From Strategy to Value Creation: An Assessment of Uptake of Digital Marketing Strategy on Financial Performance of Commercial Banks in Kenya

Authors:
Kimathi, Doris Kagendo, PhD, Dr. Ntongai David, PhD, Karuti, Franco Mutua, Kenya

Abstract:

The strategic adoption of digital marketing innovation has become a critical source of competitive advantage for commercial banks operating in highly digitized and regulated environments. This study examines how digital marketing strategies are embedded within banking operations and translated into measurable financial outcomes. Anchored in Disruptive Innovation Theory, the research investigates the effect of digital marketing strategy uptake on the financial performance of commercial banks in Kenya, while examining the moderating role of government regulation. Digital marketing strategy uptake is conceptualized through distribution innovation, channel diversification, and market development, while financial performance is measured using return on equity (ROE). Guided by a positivist paradigm and descriptive research design, the study utilized panel data collected from licensed commercial banks in Kenya through structured questionnaires and audited financial statements. Data were analyzed using multiple regression analysis. Findings reveal that digital marketing strategy uptake has a positive and statistically significant effect on financial performance. Government regulation; manifested through taxation compliance, data protection requirements, and digital lending policy frameworks; significantly moderates this relationship by shaping how effectively digital initiatives translate into financial gains. The regression model demonstrates strong explanatory power (R² = 0.720). The study extends Disruptive Innovation Theory within regulated financial markets and enriches digital marketing and strategic management literature by illustrating how banks convert digital initiatives into value-creating capabilities. Practically, the findings provide actionable guidance for policymakers and bank managers seeking to align digital marketing strategies with regulatory frameworks to enhance financial performance in emerging economies.

DOI: https://doi.org/10.51505/IJEBMR.2026.1202