My guess is the industry is at a similar point in its advertising thinking as Hi-Tech was 10 years ago. Because the Insurance business operates in a “sell thru” model using captive and/or independent agents they focus their advertising spend in mass market vehicles like Network TV. This is similar to how companies, like IBM and HP spent their money ten to twelve years ago to support business partners. Spread the “Brand” as far and wide as possible so partners can sell under it. The reason they did this…feedback from partners consistently beat up manufacturers on their lack of Brand support. Partners also told them to stay out of demand gen and selling, mostly because it threatened the partner.
That was until hi-tech companies starting paying attention to partner performance. In the past, revenue from the partner channel was collected and not driven. Manufacturers did brand advertising and tossed some marketing development funds (MDF) at the channel and hoped for the best. Today, it’s a whole different world…at least for some. The channel is now a valuable and increasingly important source of revenue, especially for new customers and solutions. As a result of this new focus, manufacturers now want greater control over those investments and better returns…not to mention tracking required by Sarbox.
Companies, like HP have now become much more involved in driving channel sales through their channels. To a point of creating collaborative demand generation campaigns on behalf of partners...telling them what campaigns to run against which customers with what budget. As a result, the internet has become a much more important vehicle. My point, HP’s B2B internet advertising spend in 07’ was 22% of the total spend (TV total was only 25%, with a little over a half going to Network). Insurance companies average spend on the internet...2%.
Insurance companies have the opportunity and need to start thinking the same way. We’ve heard from Carriers that they have a difficult time getting captive agents to grow their book of business and sell new service lines. We also heard that when it comes to non-captive agents that they would like them to better target “profitable” customers. Both needs can be addressed by getting more involved in generating and/or directing business development at the agent/customer level.
To get started companies should:
- Begin directing the TV audience they’re targeting to internet sites with real offers just like the big boys of Fin Serv do…like CapOne.
- Start using Web 2.0 tools to drive demand to agents, even better start helping them undersand how to use the tools.
- If you have to spend on TV, reallocate the budget to Cable so it can be better targeted.
- Finally, approach agents with a value proposition built on helping them build their business don’t just push products to them and hope for the best.
Again, this is just my opinion, but I’ve seen the movie before...or in this case, the TV commercial. Check back next year and see if I’m right.
