insurance advertising inside the numbers jon swallen tns media intelligence november 5, 2009
TRANSCRIPT
Insurance AdvertisingInside The Numbers
Jon SwallenTNS Media IntelligenceNovember 5, 2009
My Outline
• Focus on ad expenditures– Category and key segments– Top advertisers– Dollar volume and media allocations
• How ad messaging has evolved
• TV sports advertising
TNS Media Intelligence
• Leading provider of strategic advertising and marketing information toU.S. advertisers, agencies and media properties
• Competitive intelligence across 18 media segments
• Monitoring the industry:– 3.1 million unique products; 400,000 companies– $140+ billion in ad expenditures– over 500,000 ad occurrences collected every day
Media Coverage
Network TV
Cable TV
Syndication
Spot TV
Hispanic TV
National Newspapers
Local Newspapers
Hispanic Newspapers
Network Radio
National Spot Radio
Local Radio
Internet (display)
Outdoor
Consumer Magazines
B-to-B Magazines
Sunday Magazines
Local Magazines
Hispanic Magazines
Handling of 2009 Data
• Actual spending available through August 2009
• 2009 growth rates are based on January-August
• Full year 2009 spending projections made by applying YTD growth rates against 2008 ad dollars
– Notated as “2009 (e)”
Insurance Advertising Trends
Benchmarks
-7.4%
0.7%
-15.2%
-4.1%
-20% -15% -10% -5% 0% 5%
InsuranceCategory
Total AdSpend
% Change in Ad Spending vs. Prior Period
2008
2009 YTD
Source: TNS Media Intelligence
Financial Advertising Down 19% YTDPacing at $11.0 Billion
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
$ B
illio
ns
Total Financl Pdts Insurance Banking Credit Cards
2008 2009 (e)Source: TNS Media Intelligence
-18.7%-7.4%
-22.5%-39.0%
-18.4%
$10.99
$4.49
$3.75$1.72 $1.03
$13.47
$5.52
$4.05$2.21
$1.69
Insurance Ad Spend Growth Rates Slipping
$3.62
$4.01 $4.05$3.75
0.0
1.0
2.0
3.0
4.0
5.0
$ B
illio
ns
2006 2007 2008 2009 (e)
Total Ad Spend
+10.8% +0.7%
Source: TNS Media Intelligence
-7.4%
Insurance Advertising Segments
Auto Private passenger auto; motorcycle; RV, et al
Health Medical; dental; drug; Medicare; disability; et al
Other Insurance Products
Any other specific insurance product, including life; home; property; business; annuities; et al
General Promotion
General promotion of an insurer and its product lines, but no clear focus on any specific product
Ad Expenditures By Product Segment2009 Projected
Source: TNS Media Intelligence
$1,649
$659
$287
$1,150
0
200
400
600800
1,000
1,200
1,400
1,600
1,800
2,000
$ M
illio
ns
Auto Health Other Pdts Gen Promo
2009 (e)
-16.7%
-9.6%
+0.5%
-9.5%
Share of Category Ad Spend
Source: TNS Media Intelligence
2009 YTD
Gen Promo
Health
Other Ins
Auto42.5%
10.1%
21.8%
25.7%
Gen Promo
Health
Other Ins
Auto47.0%
7.6%
15.6%
29.8%
2006
Top Advertisers – 2008
Rank Insurer Ad $ (millions) % Auto % Gen
Promo
1 Geico 622.7 80% 20%
2 State Farm 403.7 53% 45%
3 Allstate 357.2 74% 22%
4 Progressive 293.5 95% 4%
5 Nationwide 222.5 69% 27%
Source: TNS Media Intelligence
Top Advertisers – 2008
Rank Insurer Ad $ (millions) Rank Insurer Ad $
(millions)
1 Geico 622.7 6 AARP 123.1
2 State Farm 403.7 7 AIG 102.3
3 Allstate 357.2 8 Liberty Mutual 100.1
4 Progressive 293.5 9 Farmers 95.8
5 Nationwide 222.5 10 Esurance 94.2
Source: TNS Media Intelligence
% Change In Ad Spend:Jan-Aug 2009
-3.2%-5.5%
5.6%
-29.7% -30.8%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
Geico St Farm Progrsve Allstate N-wide
Source: TNS Media Intelligence
Auto Insurance
Background
• Fragmentation vs. Concentration
• Short purchase cycle
Background
• Fragmentation vs. Concentration
• Short purchase cycle
• A price-driven marketplace
• Advertising’s role: build/maintain awareness and recognition
Auto Insurance Advertising
Source: TNS Media Intelligence
$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
$1,900
$ M
illio
ns
2006 2007 2008 2009(e)
$1,537
$1,712
$1,822
$1,649
+11.3%
+6.4%
-9.5%
Auto Insurance Spending Is Concentrated
2008 (millions)
2009 e (millions)
2008 % Share
2009 e % Share
TOTAL $1,822 $1,768 100.0% 100.0%
Top 6 Advtsrs $1,504 $1,250 83% 76%
Remainder $318 $518 17% 24%
Source: TNS Media Intelligence
2008 Ad SpendAuto Insurance
$498
$278$266
$215$154
$94
$0
$100
$200
$300
$400
$500
$600
$ M
illio
ns
Geico Prgsve Allstate St Farm N-wide Esurance
Source: TNS Media Intelligence
% Change In Ad Spend:Jan-Aug 2009
-2.4% -2.6%
-41.2%
-25.9%
-70.3%
45.6%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
Geico Prgsve Allstate St Farm N-wide Esurance
Source: TNS Media Intelligence
Ad Spend Growth By Mid-Size Auto Insurers
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$ M
illio
ns
Travelers Farmers Liberty Mutual
Jan-Aug 08 Jan-Aug 09
$23.8
$43.5
$23.3
Source: TNS Media Intelligence
Top Brands Pursue Different Media Mixes
% Share Of Ad Spend: Jan-Aug 2009
Geico Progressive Allstate State Farm
National TV 57% 69% 87% 72%
Local TV 11% 10%
Internet Display 17% 18%
Radio 16%
Magazines 13%
Source: TNS Media Intelligence
Ad Messaging
• Typical message points are price, policy features and customer service
• Have auto insurers changed their ad message in response to shifting consumer attitudes brought on by the recession?
• TNS analysis of TV commercial messages– Big Four auto insurers– Jan 2008 thru June 2009– More than 100 unique commercials analyzed
GEKKO CAVEMEN
CONTINUITY
KASHCELEBRITY STORYTELLER
COMPLEMENTARY
% Of Total TV Ad Spend In QtrCampaign: Storyteller Kash
Message Customer Service Cost Savings
Q1 ‘08 41% ---
Q2 ‘08 25% ---
Q3 ‘08 21% ---
Q4 ‘08 11% 15%
Q1 ‘09 --- 88%
Q2 ‘09 --- 73%
Source: TNS Media Intelligence
Safe Driver Bonus Accident Forgiveness
Coverage Checkup Switch and Save
% Of Total TV Ad Spend Within The Quarter
Message Accident Forgiveness
Coverage Checkup
Safe Driver Bonus
Switch & Save
Q1 ‘08 30% --- 45% ---
Q2 ‘08 31% 6% 50% ---
Q3 ‘08 14% 50% 28% ---
Q4 ‘08 22% 53% 14% ---
Q1 ‘09 3% 5% 8% 72%
Q2 ‘09 6% --- 7% 86%
Source: TNS Media Intelligence
% Of Total TV Ad Spend In Qtr
Message Service & Savings
Savings Teen Driving
Q1 ‘08 58% 26% ---
Q2 ‘08 27% 62% 4%
Q3 ‘08 34% 62% 4%
Q4 ‘08 11% 60% 23%
Q1 ‘09 --- 44% 43%
Q2 ‘09 --- 32% 61%
Source: TNS Media Intelligence
% Of Total TV Ad Spend In Qtr
Message Service & Savings
Savings Teen Driving
Q1 ‘08 58% 26% ---
Q2 ‘08 27% 62% 4%
Q3 ‘08 34% 62% 4%
Q4 ‘08 11% 60% 23%
Q1 ‘09 --- 44% 43%
Q2 ‘09 --- 32% 61%
Source: TNS Media Intelligence
Recap
• Spending growth has (temporarily) abated
• Fierce competition among the large national brands– Puts pressure on other advertisers to increase ad spend
• National TV still the cornerstone of media campaigns
• Ad messaging has moved toward price savings as consumers have become more value-conscious
Health Insurance
Definitions
• “Health Insurance” includes these products:– Medical– Dental– Prescription drug– Medicare supplement– Long-term care– Disability
Background
• Highly competitive industry– 5,000+ companies
• Markets– Employer-sponsored plans– Individual policies
• Advertising primarily targeted to the individual market
Health Insurance Advertising
Source: TNS Media Intelligence
$789 $780
$730 $659
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$ M
illio
ns
2006 2007 2008 2009(e)
-1.2%-6.5% -9.6%
Health Insurance AdvertisingSpend By Product Line
Source: TNS Media Intelligence
51%
$0 $100 $200 $300 $400 $500
Millions
Disability
Medicare
Medical
20082009(e)
-24.8%
+4.5%
-9.9%
Ad Spending Is Fragmented
2008 (millions)
2009 e (millions)
2008 % Share
2009 e % Share
TOTAL $730 $659 100.0% 100.0%
Top 3 Advtsrs $217 $201 30% 31%
Remainder $513 $458 70% 69%
Source: TNS Media Intelligence
600+ Advertisers in 2008
• Network TV: 70-75% of spend
• Sports: Nearly 40% of the TV budget
• 8 new TV spots this year
• New tag line – “Under our wing”
• Small business campaign
• Network TV: 70-75% of spend
• Sports: Nearly 40% of the TV budget
• 8 new TV spots this year
• New tag line – “Under our wing”
• Small business campaign
• TV budget shift to network– Able to clear :60 DR spots
• 25-30% of budget outside of TV
• Targeting their core market
Recap
• Three consecutive years of spending declines
• Smaller-sized budgets and fragmented spending
• Medicare supplement plans accounting
TV Sports
Background
• TV Sports – a $10.5 billion ad marketplace and growing– $600 million from insurance advertisers
• Desirable programming and quality audiences
• Top insurance advertisers use a diversity of approaches– Commercial spots– Sponsored segments in TV broadcasts– Corporate sponsorships with leagues
Growth Rates
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
2007 2008 2009 YTD
% C
ha
ng
e In
Ad
Sp
en
d
Total TV TV Sports TV Sports, Insurance
Source: TNS Media Intelligence
TV Budget Allocation To SportsSept ’08 – Aug ‘09
$0
$50
$100
$150
$200
$250
$300
$350
$400
0% 10% 20% 30% 40% 50% 60% 70%
% Share: TV Sports
TV
Ad
Sp
end
(M
illi
on
s)
Prgsve
Geico
Allstate
St Farm
MetLife
N-wide
Liberty
Hartford
Aflac Travelers
Source: TNS Media Intelligence
Pick Your Field
Auto Racing Golf Pro FootballCollege
BasketballCollege Football
Aflac Met Life Geico Hartford Aflac
Nationwide Nationwide State Farm State Farm Allstate
Travelers Liberty
College Pigskin
All Sports Advertisers
9% of Sports Budgets
Insurance Advertisers
16% of Sports Budgets
Source: TNS Media Intelligence
Tennessee vs. Alabama
October 24, 2009
3:00-7:00pm EDT
CBS Television Network
An Example
Commercial Spots
Auto Allstate (3)Geico (4)Progressive (1)Travelers (1)
Life (Investments)John Hancock (3)NY Life (1)TIAA-Cref (4)
DisabilityAflac (3)
TIAA Cref – PreGame Show
Aflac – Trivia Question
New York Life - Hologram
Geico – Halftime Report
John Hancock – Game Update
Geico – Game Recap
Isn’t This A Lot Of Competitive Clutter?Even For A 4 Hour Telecast?
Wrap Up
Wrap Up
• Insurance category spend pacing at $3.75 billion, down 7.4% from ’08– Nearly one-half spent on auto
• GEICO, Allstate, State Farm & Progressive maintain a spending advantage
• An even greater emphasis on cost savings in auto insurance ads
• Making full use of TV sports programming to reach consumers
Insurance AdvertisingA Look Into The Numbers
Jon SwallenTNS Media IntelligenceNovember 5, 2009