Insurance Networking News

StatisticallySpeaking

Do Yuks Equal Clicks?

P&c industry total Advertising expenditures (in Millions)

total Advertising expenditures (in Millions)

2009 2010

$5,086

State Farm

$514

$630

J.D. Power survey charts the ascendancy of
the web channel for distribution and the
ongoing (and expensive) efforts by insurers to
tickle consumer funny bones.

Progressive

$388
$492

J.D. Power & AssociAtes’ recently released “2011 Insurance Shopping Study” helps quantify two broadly observed trends: the rise of the Web as a distribution network and the increasing amount of money insurers are spending on advertising and brand building.

In the case of the former, the study found that the transition to websites as the primary source of lead-generation has reached a tipping point, with 54% of insurance shoppers now reporting getting their quotes online.

The other interesting finding from the study was to quantify how the ongoing deluge of auto insurance advertising is impacting the market.

The report notes that four insurers—State Farm, Allstate, GEICO and Progressive—spent more than $2.6 billion in marketing and advertising in 2010 alone. J. D. Power says the massive cash outlay, and seeming omnipresence of the GEICO gecko, Progressive’s Flo and Allstate’s Mayhem, has become a competitive necessity given the commod-itization of the auto insurance market.

“For many consumers, personal auto insurance is
something of a commodity, and the typical shopper
will only invest an average of two to three days to
gather quotes and select a new insurance company,”
the report states. “Differentiating a brand or policy
offering through advertising is challenging for
insurers that have traditionally relied on a short list of
messages about savings, security, peace of mind, or
more recently, humor.”
The report says insurers are increasingly looking
to humor to attract younger customers. Although it
credits GEICO with largely pioneering the use of
humor in its advertising, it notes it now has plenty of
company. While GEICO was largely alone in its use of
humor in the category in the mid-2000s, a number
of other major carriers have more recently joined the
fray, including State Farm (“Magic
Jingle”); Nationwide (“Spokesman”);
Farmers (“We are Farmers”);
Progressive (“Flo”); and Esurance
(“The Saver”), according to the
report.