Marketing Campaign Case Studies

Monday, January 28, 2008


Aflac, Inc., was a major insurance company based in Columbus, Georgia. In 2000 its top product was its cancer-expense coverage, which the company had invented in 1958. Though profitable, Aflac suffered from poor brand recognition; only 12 percent of consumers remembered the company, in part because it had such an unusual name. In response, Aflac wanted to expand its business by improving consumer’s awareness of the brand. It also wanted to target 35- to 54-year-old consumers. In 1999 the company hired a new advertising agency, the Kaplan Thaler Group, to improve its name recognition. The New York–based agency was known for its ‘‘Big Bang’’ approach to advertising: the belief that campaigns succeeded most when they altered consumers’ views about the brand advertised. To accomplish this for Aflac, the agency created a new spokescharacter, the Aflac Duck. Voiced by comedian and actor Gilbert Gottfried, the Duck appeared in spots that featured consumers having trouble remembering the company’s name. The Duck attempted to remedy this by ‘‘quacking’’ the answer: ‘‘Aflac.’’ The lighthearted spots were broadcast on prime-time network TV and during broadcasts of sporting events such as Major League Baseball games. Aflac spent $35 million on the campaign. The Duck was a major success. According to USA Today ’s Ad Track poll, it was one of the most popular spots of 2000. Brand recognition shot up to more than 70 percent and later topped 90 percent. Sales improved 28 percent, a result in part of improved name recognition. The company’s accident/disability insurance took off, outselling the company’s cancer-expense plans for the first time. The Duck became a cultural icon and continued as the company’s advertising focal point through 2004. That year the Duck became one of the first characters to appear on the Advertising Walk of Fame in New York City.

The American Family Life Assurance Company (later called Aflac) was founded as an international holding company in 1955 by brothers John, Paul, and Bill Amos. In 1958 it became one of the first companies in the world to offer insurance against cancer. It expanded its offerings significantly in the 1980s, and by the late 1990s it sold a variety of policies, from dental care to short-term disability to hospital-confinement indemnity and life insurance. In 1990 the company adopted the acronym ‘‘AFLAC’’ as its official name. By 2000 Aflac was insuring more than 40 million people. The company excelled at providing policies that helped pay out-of-pocket expenses not covered by someone’s primary insurer. This was also known as ‘‘supplemental insurance.’’ Aflac was respected in the industry, and in January 2000 Fortune included it in its list of the 100 best companies to work for in the United States. Because of the Fortune 500 company’s solid core business and steady growth, in 1999 the National Association of Investors Corporation named Aflac one of its favorite stocks. Aflac was especially adept at reaching out to small businesses. It tailored certain plans specifically for this market, with a sales force of about 60,000 that helped reach small businesses face-to-face. It was also the largest provider of guaranteed-renewable insurance in the United States. The company thrived overseas as well, becoming the largest provider of individual insurance policies in Japan. Aflac’s primary business strategy revolved around expanding its product line and focusing on gaining clients through businesses.

Aflac was especially eager to connect with consumers in the 35- to 54-year-old age group and to boost sales of accident and disability insurance. While the company’s cancer-expense insurance had always been the backbone of its sales, there was not much room left for growth in that sector. In order for Aflac to grow, it needed to expand its other businesses. Because accident/liability insurance was a major part of the industry, Aflac felt that that was the area it most needed to expand. The company also wanted to sell more of its supplemental insurance. The company especially wanted to reach consumers with families. Aflac had a good reputation, but its difficult-to-remember name impeded its efforts to attract new customers. Insurance was a buyer’s market. Many companies offered similar coverage policies, and it was important to stand out. Aflac suffered from terrible brand recognition: only about 12 percent of consumers remembered the brand’s name. This limited the company’s new sales leads.

Aflac’s primary competition came from other accidentand health-insurance brands, such as Citizens Financial Corp., Conseco, Inc., and Amerisafe, Inc. All offered services comparable to Aflac’s. There were a number of companies competing in the sector, making Aflac’s low brand recognition a serious liability. Aflac issued 98 percent of its coverage on a payroll-deduction basis. This meant that, while the company’s sales force and its reputation were able to help it sell its products to costconscious corporations, it had a hard time drawing sales leads outside of the corporate sphere. Aflac believed that it needed to change its image with consumers to survive in a tough industry.

When the Kaplan Thaler Group created the Aflac Duck, it chose Gilbert Gottfried to provide the Duck’s voice. Gottfried was no stranger to voice-over work, having provided the voice of the parrot Iago in the classic 1992 Disney animated film Aladdin. A longtime stand-up comic, Gottfried first rose to prominence in 1975 when he appeared on the NBC variety show Saturday Night Live. He later acted in a string of diverse films, including Beverly Hills Cop 2, Problem Child, and Look Who’s Talking Too.
Never a leading man, Gottfried nonetheless drew a solid fan base with his offbeat humor and distinctive voice. As a stand-up comedian he was often known for his bawdy humor, which was perhaps most evident in his performance of an old vaudeville joke shown in the 2005 documentary The Aristocrats. But his nasal, highpitched voice also resonated in children’s animated films, in which he often voiced comic relief. His character Iago was one of the most popular Disney villains, and the character later popped up in other Disney projects, including the television show House of Mouse.

Aflac contracted the ad agency Kaplan Thaler Group (KTG), a division of Bcom3 based in New York City, to help the brand break through to consumers. This was the first major campaign conducted by KTG on Aflac’s behalf. The company earmarked $35 million for the campaign. KTG was run by cofounders Linda Kaplan Thaler and Robin Koval. They had developed an approach to advertising that they called the ‘‘Big Bang.’’ A ‘‘Big Bang’’ campaign altered people’s perceptions of a brand or product. Aflac, which suffered from poor brand recognition, decided that this was a good approach for the company.
While trying to develop an idea for the Aflac campaign, some of the KTG personnel had trouble remembering the brand’s name themselves. While repeating the name in an effort to memorize it, the ad agency employees noticed that it sounded a little like a duck quacking. That prompted the creation of Aflac’s new ‘‘spokesman,’’ the Aflac Duck. The new ‘‘Duck’’ campaign began on December 21, 1999. Gilbert Gottfried, a nasal-voiced comedian who was known for his work in films such as Beverly Hills Cop 2, performed the Duck’s voice. One key spot featured two men in a steam room talking about insurance. One man was praising his insurance company, which helped him pay his out-of-pocket expenses following a serious accident. Every time he forgot the company’s name, the Aflac Duck popped up to remind him by quacking, ‘‘Aflac.’’ As the conversation continued, the Duck grew increasingly impatient with the man, eventually shouting at him. This was the second spot in the campaign, following the Duck’s debut in ‘‘Park Bench,’’ which featured a similar conversation located on a park bench. Both commercials revolved around people’s difficulty in remembering the company’s name.
More spots followed. One showed a young couple discussing having their first child. They realized that they needed supplemental insurance and were trying to think of the name of a good insurer. Once again, the Duck appeared to remind them: ‘‘Aflac.’’ All of the initial spots played on the theme of consumers’ difficulty in remembering the insurer’s name. The commercials turned this weakness into a strength by using it as the source of much of the campaign’s humor. The Duck himself was a humorous character, especially in the way that he grew increasingly frustrated by consumers’ inability to either recall Aflac’s name or listen to his prompts. The spots were mostly aired as a part of what the ad industry called a ‘‘prime-time roadblock,’’ a strategy involving running the same commercial on many different stations at about the same time. Aflac ensured a large audience by airing spots during every major network evening news program. The spots were also aired on CNN during Larry King Live and Headline News and on the financial network CNBC throughout the day. In addition, the spots ran during major sporting events, especially college football, professional baseball, and major tennis tournaments such as Wimbledon. As the campaign took off, the company’s advertising spread into prime-time programming across the three major networks, ABC, NBC, and CBS. In July 2001 the Duck made his premiere in Japan, where it was just as successful.

The ‘‘Duck’’ campaign was an unqualified success. USA Today reported that, based on a poll conducted by the newspaper and market-research firm Harris Interactive, it was one of the most popular campaigns of 2000. The company’s name recognition among consumers shot up from 12 percent immediately before the campaign to a resounding 71 percent after the Duck’s introduction. As the campaign continued, Aflac’s brand recognition soared above 90 percent. The ‘‘Duck’’ spots were a key reason. According to the advertising research company Ipsos ASI, the initial ‘‘Duck’’ campaign scored more than double the industry average in brand recall. Aflac also saw sales improve. In the first two weeks of 2000 the company had more sales leads than in all of 1998 and 1999 combined. It also saw annualized premium sales jump 28.5 percent in the second quarter of 2000, giving the company a record $168 million in sales that quarter. For the first time accident/disability insurance replaced cancer-expense insurance as the company’s number-one product. Sales for the year were up a healthy 28 percent, and recruiting was up 22 percent.
The Duck’s popularity prompted the company to offer stuffed ‘‘talking’’ Aflac Ducks, which quacked when squeezed, for sale on its website. Proceeds were donated to the Aflac Cancer Center at Children’s Healthcare of Atlanta. The company’s relationship with the institution dated to 1995, when it funded construction of the cancer unit. Aflac promoted the initiative on CNBC’s Power Lunch. Company CEO Dan Amos appeared on the program in July with the Duck. The Duck made return appearances on the program throughout the month, promoting the charity effort. By August the company had raised $75,000.
Aflac’s reputation thrived. In 2001 it was named the fifth most admired company in the health and life insurance industry by Fortune. The magazine sighted Aflac’s ‘‘bold approach to advertising’’ as one reason for the honor. The Aflac Duck became a cultural icon, and the company began to associate itself with the Duck mascot, placing it on the company’s website. In 2004 the Duck was named one of the country’s favorite advertising figures, besting such characters as Ronald McDonald to be one of the inaugural members of the Advertising Walk of Fame in New York City.
In subsequent years a number of celebrities appeared in ‘‘Duck’’ spots, including comedian Chevy Chase, retired baseball star Yogi Berra, and singer Wayne Newton. The Duck was also featured on the TV shows The Tonight Show with Jay Leno and Saturday Night Live. The Duck would remain the focus of Aflac’s advertising for several years. In an effort to explain the company’s services better, however, the company began to de-emphasize the Duck in some of its advertising in 2004.

No comments: