Welcome to our ultimate guide on Geico’s Marketing Strategy |Advertisements Strategies by Geico. Here we are going to highlight on Geico’s Marketing strategy through advertisements. Geico’s success has come from offering consumers independence and low prices, rolling out effective advertising campaigns that highlight savings. Chief among the forces behind Geico’s success are the insurer’s innovative initiatives and user-friendliness. Geico’s light and funny ads stand out in contrast with competitors, netting them a significant portion of the market share of the U.S. insurance market.
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First, What makes a Geico ad a Geico ad?
The insurance brand has run an endless parade of humorous advertising over its 25-year relationship with The Martin Agency, and, creatively, the campaigns have been all over the map. Even more strangely, these disparate campaigns have often run in the market at the same time, breaking a core commandment of marketing: Thou shalt not confuse thy customer.
But the counterintuitive thread that binds them all has also been the brand’s secret to not overstay its welcome with the ad-watching public. The secret: Be funny, but not too funny. Now back to Geico’s Marketing Strategy.
Geico’s Marketing Strategy
The Following are Geico’s Marketing Strategy Through Advertisements
The Pre-Roll Advertising Model
The ads are aimed at targeting creativity for “pre-roll” ads, which air directly before the content the user selected. The ads all begin and end within the five-second time limit someone is required to watch before they can skip to the content. The ads also emphasize the focus on “savings” versus “service.” As Forbes pointed out, Geico’s success has come from offering consumers independence and relatively low prices.
Advertising is critical for the primarily online insurance provider since they lack the storefront presence of the brick-and-mortar model seen with Allstate and State Farm. The ads have been enormously successful since 2013. Geico’s “Unskippable” ads were named Ad Age’s “2016 Campaign of the Year” and also earned the Film Grand Prix at the Cannes Lions International Festival of Creativity. Geico’s positioning within its target segments – and laser focus on brand management – have helped it to ascend the ranks in the climb to the top spot according to a Bloomberg article called “Geico’s Silly Ads Are Working.”
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Advertising as an Investment
Geico has invested widely in advertising as opposed to other expenditures. In an interview with Ad Age,Geico’s vice president of marketing, Ted Ward stated, “We are better off investing in technology than getting new marble floors and doors.” The thought is that by keeping costs down, Geico can then offer lower prices, which the foundation of their massive advertising. Also according to Ad Age, a large part of Geico’s marketing success is the result of its use of consumer data to dictate its advertising plans.
These enormous advertising budgets have not come without criticism. J. Robert Hunter of the Consumer Federation of America touched on Geico’s expenditures when speaking to Insurance Business. Regarding Geico’s ad budget he stated: “It drives rates up since every penny of the ads is built into the rates. Also, lobbying expenses and other such anti-consumer expenses are in the rates in all states except California.”
In the same article with Insurance Business, Robert Hartwig, president of the property/casualty trade group Insurance Information Institute (III) said that ad spending is only a small portion of a company’s budget, Hunter states that if ad spending rates continue to skyrocket, they will ultimately affect consumers. As Forbes points out, Geico has also stayed loyal to a market segment that values price more than paying for a traditional agent network model, and they will need to keep advertising costs in check to keep premiums in line with their business model.
Competition
Geico began its ambitious climb to become the top insurance giant when it became the second-largest auto insurer in the U.S. in 2014, and the third largest overall insurance company when in the same year the Berkshire Hathaway (BRK.A)-owned auto insurer surpassed Allstate for the number of auto premiums collected.
State Farm Mutual still leads the overall insurance market in the U.S. with Allstate Insurance Group a distant second, writing just slightly over half the amount in premiums State Farm did in 2017. Geico was responsible for writing premiums just under $1 billion less than Allstate during the same period and is poised to slingshot into place as the second largest insurance group as their market share grows.
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Now, The Bottom Line
Geico secured its place as an insurance juggernaut with its massive advertising campaigns and a focus on strategic target markets, in addition to being backed by one of the most dependable personalities in business, Warren Buffett. By keeping its costs significantly lower than its competitors, Geico has ensured its place among the top companies in the U.S.
The above data was taken from a different source to analyze the different level of some insurance companies. From the analysis, we have been able to come out with everything on Geico’s Marketing Strategy. Kindly share this article with your friends on social media below
