Insurance Brands Will Spend $980 Million Online: eMarketer

by Tameka Kee, Thursday, Aug 9, 2007 6:00 AM ET

THE BRAND WARS ARE ALIVE and well for insurance companies, according to a new eMarketer report--and while their online ad spending will continue to grow, TV still remains the dominant advertising medium. Life, home and auto insurance brands are slated to spend some $980 million in online advertising this year, according to eMarketer--with about half of that budget going to search, 30% being split between broadband video and other rich media formats, and less than 20% to display. Insurance companies will continue to increase their online ad spend -- with the figure reaching almost $2 billion by 2010. In the past five years they have launched a myriad of interactive campaigns, from the Caveman's Crib microsite by Berkshire Hathaway's GEICO, to Allstate's broadband and mobile Web sponsorship tie-ins to the BCS College Football Championship. But despite that growth, TV continues to be the dominant ad channel for insurers of all types, as insurance is a mature market, and according to eMarketer's Lisa Phillips, senior analyst and author of the report, the need to "build brand awareness and explain a complex product in simple terms" is better served by large-scale broadcasts. In the race to grab both consumer mindshare and sales acquisitions, GEICO, Allstate, Progressive and State Farm Mutual Auto Insurance together spent over $1.37 billion in advertising last year--with almost 67% of those dollars going to TV. TV's share of total insurance ad spending actually increased from 2004-2006, and according to Phillips, "there are good reasons for insurers' continued love of television. Insurance ads on TV move consumers to act." Indeed, the report found that some 59% of respondents would go online first after seeing a TV ad for an auto insurance company, either to visit the Web site specified in the ad, to visit the company's corporate site or to use a search engine to find a site for the company. In contrast, only 13% of viewers would call a toll-free number if one were specified in the TV ad. Phillips added, "for the insurance industry, at least, it seems that the combination of TV and the Web delivers a powerful one-two punch. And in that order."