A new consumer report suggests that big-budget insurance advertisers may be better off putting that money to another use.
According to YouGov Brand Index, both GEICO and Progressive Insurance have experienced a steady decrease in advertising awareness among consumers likely to buy a policy during the coming year. Despite that clear downturn, however, business has remained unchanged and both companies are maintaining their status quo market share.
“This category invests pretty heavily in advertising, and spend levels seem to be consistent or are even drifting up during the time period,” said YouGov Brand Index CEO Ted Marzilli. “One conclusion is that it is increasingly harder to break through the clutter.”
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Scores both in Purchase Consideration (the percentage of consumers likely to consider the brand) and Current Customer (the percentage of consumers with an existing policy) have remained steady for the two auto insurance giants.
Meanwhile, the percentage of potential insurance customers who said they were aware of GEICO ads over the past two weeks dropped from 67% in July 2013 to 50% in August 2015. During the same time, Progressive dropped from a 56% ad awareness to 47%.
Marzilli says that given the ubiquity of the campaigns, it’s very likely consumers have begun to see GEICO’s Gecko and Progressive’s Flo as “part of the wallpaper” of their lives; common, but without much resonance.
This is especially true given that insurance is not “particularly exciting for the average consumer,” said Marzilli.
And while some have suggested that the carriers could devote some of their ad budgets to improving insurance offerings, Marzilli said the decision to decrease spending is a tough one.
“That reduces clutter, yet perhaps makes it easier for your competitors to break through with their messaging (assuming they continue to spend),” he said. “The real challenge is to develop compelling campaigns, keep them fresh and target the right consumers at the right time.”
Even with the drop in ad awareness, both GEICO and Progressive continue to significantly outperform other players in the property/casualty sector. In fact, both brands more than double the entire sector, which has also experienced a slight decrease in awareness.
To prepare the reports, YouGov interviewed 50,000 people considered likely to purchase insurance in the next two-and-a-half years.
