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TMCNet:  Direct Insurers: Advertising strategy - Calm down, it's only a commercial. T1 Settling on the right advertising messages and content as a direct...

[December 06, 2007]

Direct Insurers: Advertising strategy - Calm down, it's only a commercial. T1 Settling on the right advertising messages and content as a direct...

(Post Magazine Via Thomson Dialog NewsEdge) Direct Insurers: Advertising strategy - Calm down, it's only a commercial. T1 Settling on the right advertising messages and content as a direct insurer can be tough, writes Rachel Gordon. Going beyond the 'cheapest quote' offering can take a high level of creativity - but the sector and media strategists appear to be grabbing the

Advertising can be a tricky business when it comes to insurance. No beautiful beaches, flashy cars or even a nice clean bathroom; simply a promise to pay up if something bad happens, which can be difficult to illustrate. For most people insurance is, quite frankly, a turn off - a necessary evil to buy quickly and forget about.

So it seems insurance marketers do not have an easy life. Grabbing their audience's attention is a challenge and, for ad agencies, knowing that one message is more likely to work than others - "buy us, we're cheapest" - can test their creative juices.

They keep on plugging away nevertheless, and often spending big sums. Although few companies are prepared to reveal their marketing budgets, allocating GBP15m plus on advertising alone is not uncommon among the larger players.

One of the more recent entrants to the TV advertising game is Hiscox, the high net worth insurer. In March, the company announced a second TV-led campaign would be launched in August with 40% of its GBP10m integrated marketing campaign spent on this channel (Post 29 March 2007, p3). The first campaign, entitled 'superstitions', used a stylish cinematic theme with the mysterious leading man confidently ignoring signs of bad luck; insurance from Hiscox is all the protection he needs. And the message is certainly a very different one to the 'cheapest deal' formula utilised by so many other direct insurers and aggregators.

Steve Sherlock, Hiscox's head of UK retail marketing, says the rationale to advertise on TV was two-fold: to educate generally and to raise awareness of the brand among direct customers. He explains: "The top end of the high net market is complex and people will always want to use a broker. But some customers at the lower end want to buy direct and we wanted them to see how we're different from the rest."

Key messages included Hiscox having a more generous claims paying approach as well as covering higher limits. Next year, Mr Sherlock says there will be further TV advertising but also increased emphasis on online advertising, focusing on the sites linked to broadsheet newspapers. This would also appear to be in keeping with market trends; internet advertising is buoyant, achieving 41.3% growth year on year in the first half of 2007, according to a survey by Internet Advertising Bureau and Pricewaterhouse Coopers.

A more recent entrant is LV, formerly Liverpool Victoria. The old branding was based around two shades of blue and its media presence minimal. This has radically changed to a bright and distinct heart theme, which has made the company more recognisable, according to LV general insurance managing director John O'Roarke: "The old name and image lacked warmth, we knew it had to be refreshed. We could be bold as we were not weighed down with baggage."

Gathering momentum

Mr O'Roarke is one of the few prepared to be open about its level of investment; LV spent GBP15m on the launch campaign and the momentum will continue throughout 2008, when slightly more will be spent. And it seems the investment has been worth it - the company reports new business is up 60%.

"We'll continue to build brand awareness. We're extremely pleased with what we've achieved so far and we're not just about price," he says. "You have to be thereabouts, but we have gone beyond this - it's also about trust. Next year we'll do more and also focus on household."

Capturing imaginations with insurance is difficult. And this can pose a problem for many advertisers. Do they repeatedly stick with a familiar theme, such as the Oxo family, which ran for 23 years and is to be reincarnated, or do they break from the past?

At the start of the decade, More Than arrived on the scene, a new direct brand from Royal and Sun Alliance, and chose cuddly family dog "Lucky", to front its campaign. Lucky proved a big hit with viewers, although RSA found he was more memorable than the brand. So a rethink was necessary and advertising is now based around the way the insurer can get customers lives 'back to normal' focusing on additional benefits beyond just price - for example, giving GBP75,000 as standard for home contents, higher than the average.

Pete Markey, More Than's head of marketing, says the company has linked up with agency Fallon, which has been behind its latest campaign. Fallon also created another advertisement that has attracted significant praise of late - namely the drum-playing gorilla for Cadbury's.

Mr Markey reveals a new campaign is being prepared, which will be "hot stuff", but adds that spending around GBP30m on advertising should not focus on TV in isolation - traditional routes like direct mail and telemarketing remain effective. "We achieve a lot simply by calling customers and renewing. I'm also not anti-aggregator. In fact, we're one of the first to be on the new Tesco Compare site, which gives us good branding."

The rise of aggregators has not only been a phenomenon across the insurance marketplace, they have also provided a welcome boost for TV advertising revenues. For example, the marketing trade press has estimated that Moneysupermarket spends around GBP16m on advertising; Confused approximately GBP13m; and Go Compare GBP10m.

But Pete Ballard, managing partner of user experience consultancy Foolproof, says aggregators have yet to reach their potential with regard to marketing. "This is a sector in explosion phase but, in terms of its messages, Go Compare is ahead of the game because it looks at benefits as well as price. And I think we are going to see yet more launches, such as from banks."

Aggregator image

Mr Ballard also believes aggregators need to look at more sophisticated messages. "There is little loyalty. Many consumers visit sites, note down quotes and then visit insurers' sites to find out more. This means the aggregators aren't getting paid."

He also argues that consumers are not warming to the aggregator brands. "An aggregator needs to think about becoming something like Trip Advisor, the site where travellers rate hotels and places. If you had insurers being rated, say for their claims experience, you'd find people would be less fixated on price. There would be more of a community and something like that would get an aggregator noticed."

Meanwhile, Direct Line has prompted plenty of debate in the industry by suggesting that aggregators are bad news in its advertising; namely another form of middleman that leads to higher costs as well as confusion. Spokeswoman Carmel McCarthy comments: "Product, service and price are all important in our communications. Direct Line's 'a good deal better' campaign has been running since 2006, highlighting not only the good deals you can get from us but also showcasing product benefits, such as protection against uninsured drivers. We'll continue to communicate the message that Direct Line does not sell through price comparison sites. Our campaign resonated with consumers and stimulated discussion in the media and the industry."

But will its stance pay off? Nick Smith, senior partner with branding and design agency Smiths Partnership, says Direct Line has succeeded in building loyalty through its branding and advertising and remains the insurer to beat. However, he adds that insurers can alienate customers if their advertising does not live up to the brand values: "Saying 'we put the customer at the heart of our business' is very easy to say. But when the call centre is shifted offshore, the number of branches is reduced by 30%, and new customers are incentivised at the expense of existing ones, is it a meaningful claim?"

The impact of the sub-prime crisis and resultant credit crunch are still being felt and there are rumbles of an economic slowdown, if not a full blown recession. So, will insurers be spending less on advertising next year?

Graham Mace, managing director of Tardis Publishing, which produces consumer insurance advertising directory Quick Pages, says: "Some reductions are likely, but this will remain a strong market. There's still a lot of money around. I don't think it's any secret that Norwich Union, because of its restructuring, will be spending less, but LV is a big new name and Sheilas' Wheels has done well from its campaigns. Added to this, you have the aggregators. There's not going to be a great deal of advertising leading up to Christmas because it's the wrong time, but come January, expect to see a lot."

It has been reported that Aviva, which owns NU and RAC, will cut its 2008 marketing budget by around GBP80m, shedding some 140 jobs in the process (Post, 4 October 2007, p4) but its spend is believed to still be a sizeable GBP100m. According to NU: "With more business being done over the internet, this is about making the best use of our marketing resources and focusing on those areas in which we are seeing most growth. We have reduced our marketing spend but will continue to invest significantly in the RAC and Norwich Union brands."

Outside the box

Heather Smith, head of marketing at NU Direct, says the emphasis now is on bringing the NU product brands together. "We're focused on the convenience angle, which can apply to buying life, motor, household or health cover. It's a more holistic approach."

She stresses that criticising insurers for emphasising competitive pricing is misplaced. "You look at motor insurance research and this shows that around 65% of people are interested in saving money. We want to show they may be able to do this with us but, with our brand, people also know us and that we'll look after them."

Ms Smith adds the 'quote me happy' advertisements will not be making a reappearance. "They have run their course and because we want to be more joined up, they're not suited to our strategy - 'quote me happy' was mainly about motor insurance." But at least this campaign was memorable, as she comments: "It was awarded second place in a poll for the most irritating advertisements. Still, that shows it worked." The most irritating was the Jamster 'crazy frog' ringtones.

Bizarrely there is also a website called, which says it has no gripe with the company itself, but finds the ads supremely annoying and calls for their ban.

Despite this, the women-only insurer - part of Esure - has undoubtedly hit the mark in terms of awareness with its instantly recognisable advertisements fronted by three singing Australian women in a pink Cadillac.

Cadillac arrest

Esure's head of marketing Chris Bowden says the Sheilas' Wheels brand - launched two years ago - has been a storming success. "It's already established itself as one of the fastest-growing and the most recognised of women's insurance products. The brand is currently taking on new customers at a rate of over 11,000 a month and has built up close to a quarter of a million customers since launch - a growth rate that outstrips the majority of modern insurance brands that market to both sexes."

As well as its critics, the advertising clearly has plenty of fans. "It has been to places other insurers fail to reach," quips Mr Bowden. "It has spawned more than 50 Youtube emulations, there are over 10 active groups for Sheilas' Wheels on Facebook, and the three Sheilas - all talented singers in their own right - teamed up with Stock, Aitken and Waterman to release a single."

He claims the Sheilas' Wheels brand "aimed to speak and sing to women in a way that no other car insurer had done before, bringing originality and humour to insurance; a product often seen as both dull and a somewhat resented purchase."

The impact is continuing. Mr Bowden claims 'Sheila pink' is coming into common parlance and a 'make me a Sheila star' competition was launched to find guest stars for the next TV adverts.

The success of Sheilas' Wheels must make up for any unpleasantness when Esure lost a court case against Direct Line recently. It was alleged the Esure mouse on wheels was similar to Direct Line's telephone on wheels. So Esure has subsequently resurrected cantankerous film director Michael Winner to once again champion its cause. Insurance advertising boring? Customers wouldn't give a XXXX for anything else.


Sponsorship can be a valuable addition to overall promotional efforts - the key to a successful tie-up is alignment to the target audience. Sheilas' Wheels sponsors female-lead programmes including The Vicar of Dibley, The Catherine Tate Show and Prime Suspect.

Aggregator Comparethemarket is seeking a broader audience by signing a GBP5m sponsorship deal with Channel 4 for the broadcaster's drama programming.

Norwich Union sponsors UK athletics, which has secured it mass brand awareness, and will continue until 2012.

Royal Bank of Scotland Insurance brand Privilege believes it has a comfortable fit by sponsoring the Jamie Oliver TV programme, Jamie at Home.

Brit Insurance was not well known outside of the insurance market until its sponsorship of Surrey cricket club and is also now official insurance partner of English Test Match grounds.

Marketing director Mark Jones comments: "Cricket is popular and match reports are widely read. This is good for raising awareness but also good in terms of hospitality for brokers and clients."

Surrey's ground is now renamed The Brit Oval, there is branding on shirts and there was a further boost when star batsman Mark Ramprakash won Strictly Come Dancing.

The latest deal allows Brit branding and advertising at test matches and One Day Internationals until the end of the 2010 season at the Headingley, Edgbaston, Old Trafford, Trent Bridge and Chester-le-Street grounds.

Graham Mace, managing director of Tardis Publishing, comments: "Sponsorship obviously can work - AIG is now far better known as a result of its Manchester United sponsorship. But it's not an exact science. Sometimes it's more about the directors' interests or social conscience and so is best viewed as part of the mix."

Copyright 2007 Timothy Benn Publishing Ltd, Source: The Financial Times Limited

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