Top-of-mind Insurance Webinar Presentation

TOP-OF-MIND AWARENESS
INSURANCE STUDY
Proprietary & Confidential. Copyright © 2014.
Q3 2014
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STUDY METHODOLOGY
SURVEY DATA MARKET SHARE DATA KANTAR SPEND DATA
Market share data for 2012
and 2013 was collected from
the National Association of
Insurance Commissioners
(NAIC) based on premiums
written.
Market share data was
compared to Awareness data
and spend data to model
future shifts.
1,026 consumers were
surveyed about their top-of-mind
awareness with respect
to Auto insurance providers.
Data from Rocket Fuel’s 2012
study on Auto Insurance
awareness was also used to
model shifts year-to-year.
Lastly, cross channel spend
data was collected from
Kantar Media a leading media
and market research
company.
The data collected from 2012
and 2013 was used to model
insurer awareness as a
function of ad spend across
channels.
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01 THE AUTO INSURANCE
PATH TO PURCHASE
Proprietary & 3 Confidential. Copyright © 2014.

AUTO INSURANCE SHOPPING TRENDS
A Q1 2014 TransUnion study found that:
• Nearly half (44%) of auto insurance shoppers will only look at a single quote before
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making a purchase
• Over the past 5 years consumers have continued to shop for auto insurance at the
same rate
Consumers aren’t changing their habits or perception toward insurers but they are
seeking new mediums with which to research and purchase auto insurance—Rocket
Fuel’s study found that 55% of consumers that start their journey digitally will apply
for auto insurance online.
Source: John Ittner, “What TransUnion’s Unique Data Assets Reveal about Auto Insurance Shopping and Consumers”

BRAND DISCOVERY
Initial exposure to a customer’s auto
insurance provider will typically come from
one of two sources:
Personal Networks
recommendation of a
friend, parent, or
colleague.
41% Online Research
Exposure to an ad, either
on TV or online.
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Advertisements
25%
55%

ONLINE’S ROLE IN THE PATH TO PURCHASE
Digital information is extremely important in the path to purchase with more than half
of consumers (55%) researching providers online
• Price/product comparison sites (13%)
• Insurer websites (13%)
• Consumer reviews (9%)
• Digital ad content (5%)
Ultimately, a consumer’s final decision is most
likely to be influenced by price (though
reputation and policy benefits play a role as
well). This is where digital information sets the
stage and seals the deal: 39% of consumers rely
on a digital source to make their final decision.
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Factors contributing to switch
Price 49%
Policy
Benefits
10%
Reputation
17%

02 AWARENESS

WHY DO WE CARE ABOUT AWARENESS?
It’s not immediately obvious why top-of-mind awareness is important as a KPI for auto insurers.
As we’ll see, the small consideration set for consumers in the space means that high awareness
will often translate directly to sales.
As we saw earlier, nearly half (44%) of auto insurance shoppers will only look at one
quote before making a purchase. 15% won’t even request a quote prior to making a
purchase. The brands most likely to be in this small consideration set are those that
are Top-of-Mind for the consumer.
The correlation between market share and top-of-mind awareness is very strong—
83%. Not only does top-of-mind awareness bring in initial business but it can be
viewed as a predictor for an insurer’s market share.
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CURRENT TOP-OF-MIND AWARENESS
Geico
State Farm
Allstate
Progressive
Nationwide
USAA
AAA
Farmers
American Family
Liberty Mutual
Hartford
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Q. WHEN THINKING OR AUTO INSURANCE, WHICH BRAND
COMES TO MIND FIRST? (OPEN-ENDED) N=1,026
• One year later, Geico still leads auto insurance
brands, though State Farm has passed Allstate.
• The top 4 auto insurers command 67% of the
top-of-mind awareness in the auto industry
(though less than half of the total market
share—47%)
Market share for Geico rose by +0.7% YOY, the
largest increase among auto insurers over that span.
3.8%
3.3%
3.0%
2.8%
This may be attributable to the significant gap
between its top-of-mind awareness (25% in 2013)
and its market share (9.6%), which could forecast
similar shifts for other brands. 1.3%
1.8%
1.7%
1.4%
10.6%
16.0%
21.2%
19.4%
Erie Insurance
-4.1
+1.1
-3.8
-2.2
+0.1
+0.9
-0.9
+0.6
+1.0

AWARENESS AND MARKET SHARE
AWARENESS MARKET SHARE
BRAND 2014 RANK 2013 2014 RANK 2013
Geico 21.2% 1 25.3% 10.3% 2 9.6%
State Farm 19.4% 2 18.3% 18.5% 1 18.4%
Allstate 16.0% 3 19.8% 9.95% 3 10.0%
Progressive 10.6% 4 12.2% 8.5% 4 8.3%
Nationwide 3.8% 5 3.9% 4.0% 8 4.1%
USAA 3.3% 6 2.4% 5.1% 9 4.8%
AAA 3.0% 7 3.9% 4.2% 5 4.2%
Farmers 2.8% 8 2.2% 5.4% 6 5.9%
American Family 1.8% 9 0.8% 1.9% 10 1.9%
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Source: National Association od Insurance Commissioners, 2013 & 2014 premiums written
Looking at the top 10 auto
insurance brands in terms of
awareness and market share, we
can see how the two are closely
aligned, though awareness is
disproportionately weighted
toward the largest brands.

The question then, is how does ad spend across various channels affect Top-of-
Mind Awareness, and ultimately market share, for auto insurers?

03 MODELING AWARENESS

BUILDING A MODEL
To answer this question, we built a Marketing Mix Model using cross-channel ad spend data for
each auto insurer, and used that to model awareness. Data from both the 2013 and 2014 studies
was used to insure greater accuracy.
In other words, we set up a regression analysis that looked like this:
Brand Awareness = (a1)*(TV spend) + (a2)*(Display spend) + (a3)*(Print Spend) + …
By solving for a1, a2, a3, and so on across all brands and spends, we can identify how important each
of these spend elements is in generating Top-of-Mind Awareness for an auto insurance brand.
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MODELING TOP-OF-MIND AWARENESS
AUTO INSURANCE: TOP-OF-MIND AWARENESS VS. TOTAL AD SPEND
State Farm ‘13
14
Results were good: Our
model was near perfect at
predicting top-of-mind
awareness (95%).
The chart on the right shows
Top-of-Mind Awareness and
Total ad spend for the top 10
auto insurers in 2013 and
2014.
TOTAL AD SPEND (MILLIONS)
TOP-OF-MIND AWARENESS (%)
State Farm ‘12
Geico ‘12
Geico ‘13
Allstate ‘12
Allstate ‘13
Progressive ‘12
Progressive ‘13
Nationwide ‘13
Hartford ‘13

Overperforming
State Farm ‘13
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As we look at this chart, we
can see which brands are
performing above their
expected Awareness based
on Total Ad Spend.
Those along the line (or
within the gray error bars)
are generally ‘getting their
money’s worth’ with regard
to their ad spend while those
above and below are either
over- or under-performing.
State Farm ‘12
Geico ‘12
Geico ‘13
Allstate ‘12
Allstate ‘13
Progressive ‘12
Progressive ‘13
Nationwide ‘13
Hartford ‘13
Underperforming

State Farm ‘13
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Based on that, Geico is
where we’d expect them to
be, but State Farm was a
surprise, as they appear to
be generating considerably
higher awareness than their
spend would indicate in both
2013 and 2014.
Why?
State Farm ‘12
Geico ‘12
Geico ‘13
Allstate ‘12
Allstate ‘13
Progressive ‘12
Progressive ‘13
Nationwide ‘13
Hartford ‘13

As our model would show, TV ad spend on
network TV had only a slight positive impact
on Top-of-Mind awareness, while cable ad
spend was actually detrimental.
Which isn’t to say that cable ad spend is bad
for awareness, but that it won’t increase
top-of-mind awareness comparatively to
other brands—it’s a zero sum game!
The most likely reason for the low effect
from TV ad spend is oversaturation: If too
many brands are spending similar amounts
on TV, they will compete for awareness
among the same consumers.
AUTO INSURANCE: TOP-OF-MIND AWARENESS VS. TV AD SPEND
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TV AD SPEND (MILLIONS)
AWARENESS AND TV AD SPEND

TOP-OF-MIND AWARENESS BY TV CONSUMPTION
Looking at Top-of-Mind Awareness among TV
viewers (and by amount of TV watched) seems to
support the “oversaturation” hypothesis.
Despite Geico significantly outspending other
brands on TV advertising, Top-of-Mind
Awareness among TV viewers is similar across all
viewership buckets, where we might have
expected Geico to have a proportionately higher
share of Awareness among heavier viewers.
For the large auto insurance brands, it is difficult
to outspend the competition with meaningful
results while for smaller brands it is difficult to
spend enough to even “make a dent.”
4%
1%
3%
4%
4% 12%
9% 12%
22% 23%
18% 18%
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TOP-OF-MIND AWARENESS BY HOURS OF
WATCH PER WEEK
10%
22%
28%
6%
10%
18%
13%
12%
20%
20%
4%
8%
20%
24%
16% 23%
13% 14% 14% 18% 19% 17% 13%
1 HOUR
OR L E S S
2 - 4
HOURS
5 - 7
HOURS
8 -14
HOURS
15-21
HOURS
22-30
HOURS
MORE
THAN 3 0
HOURS
Allstate State Farm Geico Progressive Nationwide

From the previous model we saw State Farm
exhibiting outlier-type nature spending
much less than its competitors while
achieving higher levels of awareness than
other brands.
Examining our model against digital display
spend channel shows why State Farm has
achieved higher levels of awareness—higher
spend in the display channel as compared
to its competitors.
In fact, the model showed that display ad
spend is 9x more effective at generating
top-of-mind awareness than TV spend.
PREDICTING TOP-OF-MIND AWARENESS
AUTO INSURANCE: TOP-OF-MIND AWARENESS VS. DISPLAY AD SPEND
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DISPLAY AD SPEND (MILLIONS)
Geico ‘12
Geico ‘13
State Farm ‘12
State Farm ‘13
Allstate ‘13
Allstate ‘12
Progressive ‘12
Progressive ‘13

Given what we saw for TV spending, we
wanted to determine where Geico’s extra
awareness advantage came from and we
were surprised to find that impressive
spend levels in radio were the key
contributor to their massive top-of-mind
awareness advantage.
PREDICTING TOP-OF-MIND AWARENESS
AUTO INSURANCE: TOP-OF-MIND AWARENESS VS. RADIO AD SPEND
20
RADIO AD SPEND (MILLIONS)
Geico ‘13
Geico ‘12
State Farm ‘13
State Farm ‘12
Allstate ‘12
Allstate ‘13
Progressive ‘12
Progressive ‘13

ANOTHER WAY TO LOOK AT IT…
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We’re big baseball fans, so
another way to think about
this is to think of auto
insurance brands like
baseball teams: Geico, the
current awareness and spend
leaders, are like the Yankees,
who get their money’s
worth, but outspend.
Comparatively, State Farm is
like the Oakland Athletics,
currently enjoying
significantly higher-than-expected
results given their
spend. Nationwide are the
Mets.
NY Yankees
NY Mets

04 GENERATING AWARENESS

WHERE DO I SPEND?
When auto brands compete evenly in TV spend, spending more, even exponentially, in that
channel is not likely to increase awareness of their brand—we’re at a point of diminishing
returns. Therefore, it behooves an auto insurers to seek out under-served channels to
exploit market inefficiencies.
Currently, we recommend increasing display budgets in as efficient a manner as possible to
improve top-of-mind awareness for auto insurers. Ultimately, the first brands to do this will
reap the benefits.
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05 IMPROVING CREATIVE

5 WAYS TO IMPROVE PERFORMANCE
1. Insurance creatives featuring a
4.
3. Animated creatives average
Insurance ads that don’t mention price
average slightly higher conversion rates
(10%) than those that do.
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human face (regardless of whether it
was an agent) average 2x higher
conversion rates.
2.
Creatives with blue or
red backgrounds
averaged 20% higher
conversion rates than creatives
with other colors, and had higher
click-through rates.
higher click-through rates,
but comparatively lower
conversion rates, a reversal from
the usual trend (and established
benchmarks).
Insurance ads with the “Apply
Now” call-to-action average
the highest conversion rates.
5.
Source: 722 creatives, 530M impressions, 44 campaigns, 2013

05 RECOMMENDATIONS

TURNING SPEND INTO AWARENESS
$1MM +.18%
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$1MM +.16%
$1MM +.02%
Ultimately, a brand can expect to
see a more efficient and robust use
of its ad spend by doubling or even
tripling down on digital display
compared to TV.
For every $1MM spent on display
advertising, an auto insurance
provider could expect to see a
.18% increase in awareness,
compared to .16% for radio and
only .02% for TV.

RECOMMENDATIONS
• INCREASE SPEND IN DIGITAL, PARTICULARY DISPLAY
– Display advertising was a strong positive feature of our top-of-mind awareness
model. Top auto insurers demonstrated that shifting dollars from overcrowded
TV channels to digital display generated additional efficiencies.
– Although data for video is sparse, it is likely the case that advertising in digital
video provides a similar positive impact to display, given how little spend is
currently dedicated to the channel. It also provides a way for auto insurers to
re-use existing assets created for TV.
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RECOMMENDATIONS
• UPDATE CAMPAIGN KPIs TO FOCUS ON MORE THAN SALES
– Although consumers are becoming increasingly reliant on digital channels to
evaluate auto insurers, request quotes, and make purchases, many will still
take the final steps offline, or may do so long after being exposed to an ad. For
these consumers, driving top-of-mind awareness should be the primary goal,
and advertising KPIs should reflect the importance of doing that.
– Auto Insurance advertisers should also consider closed-loop measurement
and optimization solutions for campaign performance—such as those that are
offered by Transunion and Rocket Fuel—to get a complete view of the impact
of digital spend on insurance policy applications
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RECOMMENDATIONS
• TRADITIONAL INSURERS SHOULD FOCUS ON RELATIONSHIPS
– Auto insurers have already well-covered the “price” factor with advertising,
though only half of consumers see price as the most important factor in their
purchase decision. For non-price sensitive consumers, consider messaging
that focuses on reputation and other differentiators like usage-based
insurance, and mobile claims and account management.
– Additionally, consider focusing Likelihood to Recommend as a KPI—consumers
are still relying on recommendations from friends and family to make
insurance purchases and so finding ways to influence those recommendations
can provide additional value.
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RECOMMENDATIONS
• DIRECT INSURERS SHOULD INCREASE CROSS-CHANNEL EFFORTS
– Traditional brand like State Farm and Allstate have long standing relationships
with older adults that makes it difficult for direct insurers to compete.
Increasing cross channel spend will allow direct insurers to take advantage of
smarter spending mix as well as capitalize on the preferences of younger
consumers ultimately leading to a stronger grasp on market share.
– Additionally, direct insurers should continue to focus on “challenger”
messaging that highlights the price benefit to the consumer.
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THANK YOU FOR
YOUR TIME
QUESTIONS?
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