SBJ/Feb. 7-13, 2011/Marketing and Sponsorship

L.A. deal ensures escalation in insurance 'arms race'

Farmers Insurance’s naming-rights deal is the latest escalation within an insurance category that has always spent heavily on sports.

Brands such as Allstate, State Farm, Geico, MetLife and Nationwide are familiar to anyone who watches sports on TV, but lately, they have been gobbling up sports media and marketing assets like so many Pac-Men chasing goblins.

Over the past three years, State Farm added NBA rights to its extensive stable of MLB and NCAA rights; Geico signed on with the NHL; and Nationwide became title sponsor of NASCAR’s No. 2 series.

Those deals pale when compared with the escalating media buys by insurers, many of whom are buying share of voice well in excess of market share. According to Kantar Media data, ad spending by insurance brands during sports programming grew an eye-opening 36 percent during the first nine months of 2010 compared with the same period in 2009 — and that’s before the fourth quarter, when most brands load up on advertising.

“It’s an arms race. That’s exactly how we refer to it,” said State Farm advertising director Ed Gold. “We’ve seen it escalate to the point where it’s now a $3 billion advertising category, and that’s not counting sponsorship spending.”

Insurance proved recession resistant, and through it, brands continued to spend. Some marketers in the category believe that the recession set in motion more churn as consumers looking to cut costs started comparing rates. With more potential customers, that elicited even more marketing noise.

“It’s always been competitive, but recently, it’s really been ramping up even more,” said Richard Hong, vice president of global brand and marketing services at MetLife.

Insurance is also, however, a relatively low-interest category. That’s left insurance marketers longing for the passion sports engenders and looking to appear endemic to sports. “For us, it is a form of product placement,” Hong said. “How do you get an insurance product inside the broadcast of major sporting events where you know it is TiVo-proof? We’ve been doing it with blimps for more than 20 years.”

Met Life is the PGA’s “official aerial coverage provider.”

Chris Sorgie, corporate vice president and advertising director at New York Life, said it’s a question of making insurance relevant to consumers. Accordingly, New York Life’s SEC football sponsorship with CBS has a first-down marker sponsorship once each quarter, during which the company logo is superimposed over play. There’s a similar “safe at second” integration within MLB telecasts.

“It would be hard for us to integrate within a prime-time program,” Sorgie said, “and even with all the noise lately, our brand awareness measures are up.”

New York Life also recently grabbed some NFL equity, partnering with Stats LLC to create the New York Life Protection Index, an innovative weekly rating index that measures how well each NFL team’s offensive line protects its quarterback.

Unlike some categories, sports can work for a number of brands within the insurance market. “The whole category is way up,” said Michael Neuman, managing partner for sports, entertainment and events at Horizon Media, which represents Geico. “Spending can go beyond the big three and still achieve results. Insurance companies are doing a better job of segmenting against new and different consumers to sell things like motorcycle, RV and ATV insurance, and they’ve found sports are effective there also.”

Added Malcolm Turner, who heads Wasserman Media Group’s consulting and has Nationwide as a client: “All any brand wants is to get into consumers’ consideration set. It’s just getting more expensive to do that in this [insurance] market every day.”

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