While the Super Bowl may appear to be all about football, for many, it's the ultimate game day for television advertising. As we are smack in the middle of football season, it's worth considering how property-casualty (P-C) insurance fits into the grand scheme of advertising. As an industry, P-C insurers allocate substantial budgets to advertising, but how does this spending compare to the national advertising landscape, and does it truly make sense?
Huge Advertising Spending: A Closer Look at P-C Insurance Investments
In the broader context, the collective advertising spend in the P-C insurance industry amounts to roughly $20 per person in the United States, or approximately $60 for a typical insurance-purchasing individual, couple, or family. This figure may come as a surprise, especially considering the omnipresence of insurance ads in the digital age. It amounts to just 2.7% of the total advertising landscape, not as high as one might expect.
The top three spenders in this category come as no surprise. The likes of Flo, Jake and Patrick Mahomes, and the GEICO Gecko have become household names, with their advertisements resonating with a vast audience.
The Value of Advertising in the Insurance Industry
The question that looms large is why the insurance industry invests billions in advertising every year and whether it's a sound strategy. The conventional reason for advertising is to raise awareness of a product, making potential buyers more likely to purchase it. While this holds true, industry insight should also acknowledge that advertising can fuel more frequent shopping, predominantly driven by price.
If this proves to be the case, advertising may not only add a standalone cost to the premium dollar but also result in higher expenses associated with managing new business as opposed to renewal business. The effectiveness of advertising spending remains a subject of debate, with conclusive answers remaining elusive.
It's essential to recognize that not all “advertising” disclosed in insurer annual filings is earmarked for television. The industry is witnessing a shift towards digital marketing and other promotional avenues.
AAI offers the support you need to market yourself and your agency to your target audience, including access to top insurance providers. Contact us today for more information.