The Insurance Industry’s Ad Feud and Struggle for Sustainable Advertising

Man putting out warning triangle.

There’s a vicious cycle beleaguering the insurance industry, threatening advertising sustainability and increasing insurance rates, and inflated online signals are at the epicenter.

The Cycle

Insurance rates are set to increase, according to reports by ForbesAllstate and Geico, which will inevitably prompt consumers to shop around—a hunt that often starts online. As unsatisfied consumers click on insurance carriers’ ads, peruse websites and compare offers, they inflate contextual signals that advertisers rely on to target direct response campaigns.

In order to seize these prospects—and withstand competitive marketplace noise—insurance marketers are investing heavily in direct response. This response to inflated behavioral signals has been deemed an ongoing advertising war by analysts and journalists.

Read this blog to learn the differences between profile and behavioral signals.

Creative Ads Antagonize the Signals

Progressive was at the onset of the war in 2008 with its quirky and winsome soldier Flo. Then Allstate created Mayhem to combat Flo directly. The Geico Gecko and Jake from State Farm became pop culture hotshots, while consumers became delightfully enthralled with the entertaining figureheads that were at the front lines of this war.

To put the stakes in context, Geico’s It’s What You Do campaign has generated more than 30 million YouTube views in the past year alone. In addition to the prospects who are comparing rates, consumers are tuning in online to catch all the antics and hilarity.

But whether online behavioral signals are caused by consumers looking to switch carriers or looking to be entertained, the truth is that the conversion rate of these campaigns will never reach 100%. Because many of these consumers won’t actually switch carriers, there are ample false signals fueling an increase in direct response ad spending. Unfortunately for ad budgets, many analysts consider this cycle dismally unsustainable.

And if insurance marketers continue to increase direct response advertising, companies will have to out innovate in order to increase advertising efficiency in this feud.

Focusing on the Bottom Line

Here’s the first battle these competitors can win: stop wasting bullets. Insurance marketers don’t need to advertise or retarget every person showing online signals, because many of those people never convert. For example, at the beginning of this year Allstate debuted its Mayhem DIY campaign, a call for real-life DIY fails that Mayhem would recreate. Consumers were asked to visit MayhemDIY.com to vote for the best DIY failures. In this case, a truly creative campaign would generate many leads that could easily be retargeted, though would likely never convert. In order to make these creative and digitally-driven campaigns more successful lead generation tools, marketers need a tool that can decipher high-value leads from consumers who will never convert.

Audience filtering is a tactic that uses a combination of offline data, custom predictive scoring and cross-channel application to reduce advertising  waste.

A predictive model is built using a sample of existing customers and analyzing thousands of offline data points per profile. Each data point is weighed according to relative importance. The result is a predictive model that calculates a score of 0 to 99 for 220 million U.S. adults, based on how likely they are to become a customer or not.

The audience filter is a collection of the bottom scores, the non-converters, and is applied as a filter to existing direct response campaigns to help you eliminate wasted impressions.

Because these scores are linked back to verified offline consumer profile data, they can easily be applied to audiences across channels and devices.

For an industry caught in an unsustainable feud, advertising efficiency and immediate results are imperative. Audience filtering, rooted in offline consumer profile data, suppresses wasted impressions in existing direct response campaigns. It’s an offline strategy, applicable to online campaigns, in order to deliver impactful bottom line results. It could just be the savior we need.

Learn more about how audience filtering helps direct response marketers in this blog: How NOT Targeting Makes You a Better Marketer.

Pete LaFond

About Pete LaFond

As chief marketing officer, Pete leads TruSignal’s marketing group, including marketing strategy, brand and acquisition advertising, product and vertical marketing, events and conferences, social media and public relations.
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