If you build it, will they come? While that mentality may have worked for Kevin Costner in the movies, has fantasy now become reality for insurers trying to attract and retain customers with social networking? The answers to that question from people within the insurance community are mixed, but the one thing they all agree upon is that the people - and the potential - are certainly there.

Eighty-five percent of all online adults currently use some form of social networking, according to Chad Mitchell, a senior analyst with Forrester Research Inc., Stamford, Conn., citing an A.M. Best study - research that Forrester has backed up. He confirms that the interest and activity is present, and that social networking is definitely now part of insurers' marketing strategies.

Social networking, while popular among the Millennial generation (born between 1981 and 2001), is expanding to be a major part of everyone's life. Professionals, "adults," and people of all ages and walks of life have flocked to join social networking sites such as Facebook, MySpace and LinkedIn, among myriad others. The networks, now woven into the fabric of our increasingly technological society, allow people to have a perpetual dialogue with friends, family, coworkers and, literally, everyone else.

People also join groups devoted to specific interests, giving people access to a ready-made, virtual community of individuals with similar tastes and values. The proliferation of mobile devices able to run applications devoted to the social network of choice is creating interconnectedness and a vast pool of potential customers, inciting insurers to jump in.

"It's where certain segments of the market are," says Andrew Rose, president & CEO of Admiral Americas LLC, a newly formed direct-to-consumer auto insurance company located in Richmond, Va., and subsidiary of UK-based Admiral Group PLC. "If we want to remain connected and relevant to them, then we need to play in that space. If we're focusing on a younger demographic, then we need to hone in on those types of networking sites, and use the different attributes of what's broadly defined as Web 2.0."

Shawn Morton, senior consultant for Web user experience at Nationwide Insurance Co., agrees with Rose, but counters that social networking is by no means replacing any of the traditional channels.


The key to getting the most out of any foray into social networking is remembering that engaging customers on social media sites isn't necessarily about selling insurance. Instead, it's all about brand recognition, and building trust with the consumer base.

"People often think marketing on social media sites means buying an ad on Facebook, or buying banner ads on MySpace, but it's really about having content that people want to pass around on these networks," says Kristin Brewe, the director of brand and public relations for San Francisco-based Esurance. "It helps you connect with conversations people are having about your brand, and helps you target people who may or may not have previously interacted with you to get them to come and take a look at you."

Beyond that, Forrester's Mitchell asserts that the true value of a social network is its unique, user-generated content characterized by someone providing a comment, rating or criticism around the product or company. "We've seen huge failures where companies come in and try to disguise themselves as a customer," he says. "They really shoot themselves in the foot."

Rose, who is currently developing Admiral Americas' Web site and marketing strategy while evaluating what tools and networking components work best, expands upon Mitchell's message, citing his concern about the legitimacy of any social networking presence. "The dangerous part of playing in this space is that if it looks like it's a marketing ploy, people will see right through it, which can quickly become a negative," he says. "It has to be done with the legitimate intent of becoming a part of the social fabric first, and if it results in benefit to your brand, that's an additional, ancillary benefit."


One of the companies receiving the most press for the success of its social networking efforts is Esurance, which, in addition to the visibility and adventures of its iconic Erin Esurance figure, Mitchell says, started building that trust in a non-intrusive way with its Cloud Cult campaign. Centered on an environmentally conscious indie band with a cult-like following in a demographic the company wanted to reach, they created a presence on social networks, a microsite and television ads, among other avenues, while offering value-added content such as tips to reduce your carbon footprint and free music downloads.

"What was unique about that campaign is that it started with Facebook, and allowed consumers to look at the content of the band, point to it, and build a community around something tangible," Mitchell says. "While Esurance wasn't necessarily talking about car insurance, they were talking about the brand."

Esurance, he explains, doesn't view social networking as directly linked to acquisition or measured in success terms by sales, but, instead, assesses it based on brand awareness and trust-building. "What's unique and different about that is they started to build success, and have integrated that success into their overall marketing strategy."

Therefore, Mitchell stresses that insurers focus on different metrics than to what most companies are traditionally accustomed.

"If you're just looking at unique visitors or page views, it's going to be a failure because you can't monetize that," he says. "It has to have some sort of metric around awareness. If you use it for sales or leads, you need to be able to track that. While social networks are successful for brand awareness and generating trust, I don't think you can put an ROI figure on that right now."

Nationwide's Morton says the company tracks awareness and page views the same way it would with any other campaign, but believes that with social media, industry-wide, there's still that challenge of trying to determine the value of a Facebook fan or a Twitter message.

Editor's Note: Check back next month for part two of this feature, which continues its examination of social media while focusing on what insurance companies are doing with microsites.

(c) 2009 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.

Insurers Atwitter about Microblogging

Not necessarily new, but still considered somewhat bleeding edge for most insurance companies, Twitter, a microblogging service that allows people to post immediate status updates via their mobile device or the Web, is currently the subject of much curiosity as a social networking tool.

"I've been shocked by how much Twitter has taken off with brands as opposed to other sites that have been around longer," says Shawn Morton, senior consultant for Web user experience at Nationwide Insurance Co. "It has a relatively small user base, but there are hundreds of brands currently participating there. I think it shows there's a commitment to connecting closely, as it's a service about timeliness, relationships, responding and sharing information."

Morton feels that because there's currently so much press about social media, brands that are first to enter the fray get the most attention. He gives the example of H&R Block, which last tax season used Twitter to monitor people discussing their taxes, and would jump in to give advice. While the company was able to benefit a handful of people, the bigger victory was the recognition it gained from the press and industry at large.

"The people who use Twitter tend to be more of the hardcore social media users who talk more about social media, so when they see a brand doing something well, they tend to talk about it," Morton explains.

Kristin Brewe, director of brand and public relations, Esurance, San Francisco, agrees, adding that if you reach 10 people on Twitter, you'll probably reach 1,000 because they'll promulgate your message.

"The early adopters on the Web are the one who are the greatest message sharers," she says. "It's better to reach those 10 people who will pass along your message than to send a spam e-mail to 1,000 people who aren't necessarily interested."

The biggest question for insurers is what exactly to do with the mere 140 characters allowed in each Twitter update. Nationwide currently responds when something is posted about them, but are still figuring out what else to do with it. Esurance also is experimenting with the service, trying to refine their audience, and define the proper message.

"If we do anything at all, it's probably about Erin Esurance," Brewe says of the company's popular animated character. "Erin needs to be active in that space for the people who are looking for her there."

(c) 2009 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.

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