Report: GEICO Leads Others in Insurance Advertising Dollars

GEICO led all property and casualty insurance providers in the amount of advertising dollars spent in 2011, with the top five insurers locked in an advertising arms race that saw them all spend more last year than in 2010 on marketing their companies, according to a report from SNL Financial released Friday.

Ad Money Increasing for Industry’s Top Insurance Companies

The top 16 insurers in SNL’s rankings spent about $5.3 billion total on advertising in 2011, up from $4.5 billion in 2010.

Each of this year’s top five insurers, in terms of advertising money, spent more in 2011 than 2010: GEICO, State Farm, Allstate and Farmers.

The figures are in line with a 2011 study from J.D. Power and Associates that analyzed insurance companies’ advertising approaches and found that the industry spent about $5 billion in marketing in 2010. The study focused on humor-based advertising, highlighting the introduction of GEICO’s Cavemen and Gecko characters in the mid-2000s as the start of a slew of such insurance marketing, including Progressive’s Flo and State Farm’s “Magic Jingle.”

“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,” the study’s authors stated.

GEICO Accounts for Chunk of Industry’s Ad Dollars

According to SNL Financial, GEICO spent a little more than 1 out of every 6 of the industry’s advertising dollars in 2011, with its advertising expenditures growing by 10.1 percent that year. Comparing total premiums with marketing funds shows that the insurer is still the “most reliant upon advertising,” according to the research firm.

GEICO spent $993.8 million in 2011 to advertise “a screaming pig and a talking gecko, among several other motifs, on television, radio, billboards and Internet banners across the country,” the firm said. In 2010, the insurer spent $902.7 million.

GEICO has held about the same percentage of advertising expenditures compared to total written premiums for the past five years.

However, the insurer has parlayed its advertising efforts into “a competitive advantage,” as it has shown steady premium growth while cutting expenses in other areas like commissions to agents.

Allstate Poured Ad Money into Esurance

SNL Financial also provided an update on Allstate’s “aggressive rebranding” of Esurance after acquiring the company in 2011.

Allstate has been trying to expand its direct-to-consumer market and attract shoppers who get auto insurance rate comparisons themselves, employing a number of new advertising campaigns geared to the individual consumer, including one that featured John Krasinski, who plays the popular character Jim from NBC’s “The Office.”

Allstate spent $45 million on Esurance advertising in the first quarter of 2012, according to a conference call transcript with Allstate President Don Civgin acquired by the firm, which added that the advertising’s impact has shown “mixed signs.”

Esurance premiums grew 6.9 percent in the first quarter this year compared to 2011, but it was a relatively small difference from last year’s 6.7 percent increase in the first quarter compared to 2010

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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