Insurance Advertising: A Q&A with Jon Swallen, SVP Research TNS Media Intelligence

Compete recently caught up with Jon Swallen, SVP Research, at TNS Media Intelligence, which like Compete, is in the TNS Media group of companies. At TNS MI he oversees the methods and procedures used to measure advertising activity and mines the TNS MI database to produce insights on a wide range of topics relating to the advertising marketplace. He is a sought-after source and expert, and is frequently quoted in the Wall Street Journal, New York Times, Advertising Age, USA Today and other publications. He has also appeared in live segments on CNBC, Bloomberg TV and FOX Business.

Here is what Jon had to say about the state of the Insurance Advertising category:

Let’s start from the top: can you give a brief overview of the insurance advertising market and where it fits into the Financial Services advertising market in general?

Financial Services is the third largest ad category and currently generates about $11 billion USD in measured ad spend per year. The primary sub-segments are Banking, Credit Cards, Insurance and Investment Products. Of these, Insurance accounts for $3.8 billion USD in ad spending, or roughly 35% of the category total.

On the product side, Insurance is a complex and fragmented market. Product lines include auto, homeowners, life, medical and other specialties. But from the advertising side, the overwhelming majority of Insurance spending is directed at the private passenger auto market.

How has the insurance advertising category been holding up given the economic situation and its  effect  on the advertising market?

I’ll be delving into that with some actual figures and insights during an upcoming Insurance Advertising webinar on December 10th, 2PM EST. Although Insurance ad spending is down from its 2008 peaks, the declines are modest compared to the larger Financial Services sector and to the overall ad market. The indications are that lower Insurance spend is attributable to ad price deflation rather than a reduction in marketing activities. Competition among auto insurers continues to be a catalyst.

Individual insurance advertisers have reacted differently, underscoring the old marketing dilemma of whether to view a distressed market as a time to be cautious or to seize opportunity. We can see different strategies reflected in how these advertisers have shifted their media mix and changed their ad messaging in response to the evolving consumer environment.

Speaking of shifting media mixes, what has 2009 meant for digital? Are insurance advertisers siphoning some of their ad budgets online?

When talking about online marketing, we have to distinguish between search and display advertising. TNS tracks the latter but not the former. Our data show that insurance advertisers are currently allocating about 6% of total media budgets to online display. That’s a full percentage point higher than a year ago. Progressive and State Farm lead the way in terms of the weight they give internet display in their media mixes.

What do you think is preventing more insurance advertisers from moving online?

Well, display competes with search for a share of online budgets and given the volume of consumers who go online to research or shop for insurance quotes, search is an attractive option for many underwriters. So display ad growth is perhaps a modest proposition.

There’s also still strong competition for share of budget from offline media. A good example is TV Sports. The TV Sports ad market, which is around $10.5 billion USD, provides desirable programming and quality audiences, where insurance advertisers have access to a large reach through commercial spots, sponsored broadcast segments, and corporate league/team sponsorships. The insurance category, as a whole, has shown true loyalty to the Sports programming, even through the economic downturn.
Jon will be hosting a free Webinar with a full analysis of the latest insurance advertising trends on December 10th, 2pm EST. There is still space available. Register Now:

About Kristen Renda:
Kristen Renda serves as Marketing Manager for Compete. Since joining the company in 2008, she has been fully immersed in all aspects of Compete’s marketing programs; developing and executing both online and offline campaigns. Most notably, she plans and manages all company events including the annual Digital CMO Summit.