Using Yuks to Build Brand Awareness

J.D. Power & Associates’ recently released 2011 Insurance Shopping Study attempts 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 over $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 commoditization 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 2-3 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.”

Indeed, as indicated by the subtitle of the report, “When Did Personal Auto Insurance Become a Laughing Matter?” insurers are increasingly looking to humor to attract younger customers. While the report credits GEICO with largely pioneering the use of humor in its advertising, it now has plenty of company. “GEICO first sought to differentiate its brand in the marketplace with the introduction of its Cavemen, Gecko, and celebrity spokesperson campaigns, and continues to leverage humor in the majority of their advertising today, with more than 30 creative executions in recent rotation,” the report states. “However, 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”).”

The report notes that while Allstate was comparatively late to the party, it has made up plenty of ground with its recent “Mayhem” campaign. The impact of the campaign was immediately identifiable in the amount of “buzz” in generated online. “In May 2010, immediately prior to the launch of the Mayhem campaign, online conversation, or buzz, regarding the Allstate brand averaged 10,000 comments per month,” the report states. “Of these, only about 3% were related to Allstate’s advertising, despite the company having spent more than $400 million per year in the prior 4 years. Starting in May 2010, the level of discussion regarding Allstate steadily increased over the next 8 months, peaking in February 2011. Perhaps more significantly, the proportion of discussions that focused on advertising increased dramatically as well—growing from 3% of online conversations in May 2010 to nearly 20% of conversations in February 2011.”