The Flo Effect: How Insurance Commercials Spike Sales

Insurance Commericals

When it comes to advertising, auto insurance has taken the industry by storm over the past decade, constantly appearing on our televisions and radios, and in our newspapers and magazines. Chances are, you can easily name off the top auto insurance companies based solely on the commercials that you see and hear day in and day out. Everyone knows the GEICO gecko, the Aflac duck and of course, the famous Flo from Progressive. Whether you can’t get enough of comedian Stephanie Courtney‘s smiling face as Flo or you change the channel every time she comes on the screen, you undoubtedly associate her with Progressive Insurance. And whether you realize it or not, recognizing Flo each time you see her on the television gets you thinking about auto insurance. That’s effective advertising.

Insurance Advertising tactics

Including notable characters such as talking animals and memorable faces in advertising is just one tactic for influencing consumers. Tapping into emotions, evoking a sense of fear or drawing comparisons are also effective ways of pulling in consumers looking to buy car insurance. Several years back Nationwide turned away from the popular humor tactic and tapped into the 2012 Summer Olympics as a campaign method for reaching people’s emotions, according to USA Today Money. The goal was to use still-life clips to create an emotional connection.

“Humor has been the name of the game in this category. But when you want to create something real and relevant, you don’t do it with spokes-characters and talking animals,” said Nationwide’s chief marketing officer, Matt Jauchius. “We decided to zig when everyone else is zagging. The thing we’re counting on is getting to who we are in a genuine manner that leads to growth.”

Following suit with the emotional tactic is State Farm, known for their tear-jerker commercials featuring milestone life events. Previously featuring ads such as the “Discount Double Check” starring Saturday Night Live alums and Green Bay Packers star Aaron Rodgers, the company has since switched gears according to Advertising Age. Commercials now feature memorable events that people can relate to such as dropping a child off at college for the first time, raising a family and getting married. In 2013, State Farm was the top private passenger auto insurer with 18.5% market share, according to Advertising Age.

But what tactic is most effective when it comes to spiking auto insurance sales?

“The most effective advertising all comes down to spending methods.”

Effective car insurance advertising

When it comes to beating out competitors, it’s not necessarily about being the best. It’s about being different, standing out from the crowd and leaving an impression. And according to Insurance Journal, it may all come down to spending methods. According to 2013 findings from Nomura Equity Research, GEICO was winning the race in auto insurance sales not because of how much money was spent, but because of how the money was spent.

Instead of spending money on agents, GEICO poured its resources into effective advertising which in turn pushed them ahead of competitor Allstate. Analysts found that in 2012, GEICO spent $1.1 billion on advertising and was ranked second with a 9.9 percent market share for the first half of 2013, according to Insurance Journal. Based on GEICO’s growth – an average increase of 12.6 percent across the top-10 states – the direct model of advertising really works. Although it spent less on advertising the following year, the insurance company still earned $18.57 billion in auto premiums to remain the second largest provider in the industry, according to Bloomberg Business.

Insurance AdvertisingAdditionally, analysts at Nomura Equity Research found that GEICO sells more simply because it costs less. For most people, thinking about a car insurance plan is a hassle and a headache. They want an effective plan but they don’t want to break the bank. Keeping auto insurance costs low and putting the most resources in advertising is a winning combination for commercials to effectively spike insurance sales.

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