Marketing Campaign Case Studies

Tuesday, January 29, 2008


The Allstate Corporation, America’s longtime number two auto insurer, faced new challenges in the 1990s when competitors such as GEICO and the Progressive Corporation blanketed television with spots playing up the low prices of their policies. Long reliant on its slogan ‘‘You’re in Good Hands,’’ Allstate found itself in need of a brand refurbishing to counteract the inroads made by these direct marketers. In November 2003 Allstate released the ‘‘Our Stand’’ marketing campaign, its first to feature a celebrity spokesperson, actor Dennis Haysbert, known for playing the president of the United States on the hit television series . While ‘‘Our Stand’’ included radio, print, and Internet elements, the core of the campaign was the television spots featuring Haysbert. The spots offered a soft sell in which Haysbert made the case that price was not everything when it came to buying car insurance—a relationship with an agent was important as well—and vouched for Allstate’s integrity and commitment to take a stand for customers and promote their interests. Although the company did not reveal the advertising budget for the campaign, Allstate was reported in the press to have increased its ad budget 56 percent to more than $120 million in 2003, a level it maintained in 2004 and 2005.
‘‘Our Stand’’ helped Allstate reestablish its position in the marketplace. The company reported that the number of consumers contacting Allstate through its sales agents, website, and call center had increased after the campaign began, but it did not provide any financial data to support the claim. Haysbert’s contract was extended through 2006, however, indicating that the company was pleased with the campaign’s effectiveness.

Allstate was credited with having the oldest surviving tagline in paid advertising: ‘‘You’re in Good Hands with Allstate,’’ which dated back to 1951, when a print ad first depicted a pair of hands cradling an automobile. (The oldest tagline in use was ‘‘Only You Can Prevent Forest Fires,’’ a long-standing public-service effort produced by the Advertising Council; it had been used since 1947.) Throughout its history Allstate and its rivals produced advertising that was serious in tone, emphasizing such company virtues as trust and reliability and never mentioning price. Then, in the 1990s, GEICO, a direct marketer of car insurance ranked seventh in sales, upset the status quo by bombarding the television airways with humorous commercials that challenged the likes of number two Allstate and market leader State Farm solely on the basis of price. The Progressive Corporation soon followed suit, and Allstate came under increasing pressure to protect its market share.
To keep its slogan fresh and maintain relevance in the marketplace, Allstate offered variations on the ‘‘Good Hands’’ theme. The insurer also dabbled with celebrity endorsers. In 2001, for example, Allstate began a television, print, and radio advertising campaign that used the tagline ‘‘The Right Hands Make All the Difference.’’ The advertisements featured football players Joe Montana and Jerry Rice as well as inventor Ann Lai, all of who whom relied on their hands in their professions. But the ‘‘Right Hands’’ campaign failed to stem a drop in Allstate policyholder growth, and after 18 months it was retired, replaced by the ‘‘Our Stand’’ campaign, which was the first Allstate advertising campaign to center on a celebrity spokesperson: actor Dennis Haysbert. An African-American, Haysbert had acted in numerous films and television shows since getting his break in 1979, when he first appeared on the television series The White Shadow. But he achieved true celebrity status in 2001, when he was cast in the television series 24 to play Senator David Palmer, a character who would later become president. At the core of Palmer’s character was moral integrity, an attribute that viewers associated with Haysbert the actor and that thus made him an ideal advocate for Allstate’s message. Jill Weaver, Allstate’s vice president of brand strategy, was quoted in a press release as saying that Haysbert embodied ‘‘the spirit of the Allstate brand. Experienced, honest, and understanding, with a sense of strength and conviction.’’

The ‘‘Our Stand’’ campaign sought to update the brand image of Allstate while appealing to a more diverse customer base. In essence, auto insurers were faced with the difficult task of reaching one of the broadest markets imaginable: anyone who drove a car, whether they were male or female, young or old, and regardless of ethnicity. In this regard Haysbert was a good choice as spokesperson; he had wide appeal, even with younger consumers, despite the fact that he was born in 1954. Allstate’s main pitch was that picking an insurance company was more involved than just choosing the lowest price. More important, the company argued, was the service a policyholder could expect and the integrity of the insurance agents and of the company that stood behind them. Hence, the ‘‘Our Stand’’ target audience was somewhat older than the demographic targeted by GEICO and Progressive. This older market also had more money to spend on car insurance and placed greater value on a relationship with a broker and the solidity of the insurance company backing the policy.

In terms of market share, State Farm was Allstate’s top rival. It controlled about 18.5 percent of the market in 2004, compared with Allstate’s 10 percent. Next in line were Progressive with 7.1 percent and GEICO with 5.5 percent. Rounding out the top 10 in direct premiums written were Farmers Insurance Group (4.9 percent), Nationwide Group (4.5 percent), United Services Automobile Association Group (3.5 percent), American International Group (3 percent), Liberty Mutual Group (2.8 percent), and American Family Insurance Group (2.2 percent). All insurers were boosting their marketing budgets, eager to take business from each other, a result in large measure of the increasing profitability of the autoinsurance business. Because cars had become better built, they needed less repairs and were involved in fewer accidents. Consequently, insurance companies had fewer claims to pay out. Moreover, America’s population was growing older, resulting in people driving slower, again leading to a decrease in accidents, greater profits for insurers, and a heated scramble to peel away the customers of rivals.
In addition, Allstate, State Farm, and other old-guard broker-based insurers found themselves competing against the likes of GEICO and Progressive in another way. Mya Frazier reported in Advertising Age, ‘‘It’s a battle of the business model, pitting the call-center row of headsetwearing operators taking claims and signing on new customers against neighborhood agents who know a customer’s kids and may even be a neighbor. It’s pitting Internet price quotes [against] in-office consultations and the yearly search for a best price [against] a lifetime relationship with an agent.’’ It was at this fundamental level that the ‘‘Our Stand’’ campaign made its case with consumers.

Allstate’s venerable slogan ‘‘You’re in Good Hands With Allstate’’ was inspired by an incident in life of one of the company’s general sales managers, Davis W. Ellis. In the spring of 1950 his youngest daughter was hospitalized with hepatitis. To ease his concern his wife told him not to worry: ‘‘We’re in good hands with the doctor.’’ That remark came to mind later in the year when Allstate was struggling to coin a slogan for its first national advertising campaign. Ellis shared the story about his daughter, and soon the company had settled on a slogan that endured for well over half a century.

In answer to GEICO and Progressive’s blitz of advertising focusing on price, Allstate’s ‘‘Our Stand’’ campaign made an emotional appeal to urge consumers to re-evaluate what was really important in insurance. Lisa Cochrane, the insurer’s assistant vice president of marketing communications, told American Banker reporter Lee Ann Gjertsen, ‘‘We know that customers are looking for more than just a low price; they need good value, good protection. That’s why they buy insurance or financial security products.’’ At the same time, Cochrane noted, Allstate believed that ‘‘quality insurance should be affordable.’’ A secondary purpose of the campaign was to promote research that, according to Allstate, revealed that 70 percent of customers who switched to Allstate saved $200. Moreover, because Allstate had in recent years become involved in banking and financial services, the ‘‘Our Stand’’ campaign served to build general awareness of what Allstate had to offer in addition to its core autoinsurance business.
The ‘‘Our Stand’’ campaign broke in November 2003. The crux of it was the television spots anchored by Haysbert, but the company also included radio spots that began airing later in the month, print ads that debuted in early 2004, and Internet executions. The first four TV spots were shot and produced by Sam Mendes, the director of the Oscar-winning film American Beauty. These initial spots set the serious tone of the more than 20 spots featuring Haysbert. In the spot titled ‘‘Pay Phone,’’ Allstate took a subtle dig at GEICO and its telephone-based operation. The camera slowly zoomed in on Haysbert standing next to a pay phone on a dark, deserted stretch of road. In a low-key voice he asked, ‘‘If you needed your insurance, who would you call? Not the name of the company, but the name of the person? You got two seconds. Coming up blank? You may want to consider Allstate . . . You deserve a relationship with a real person. That’s Allstate’s stand. Are you in good hands?’’ A wide shot of the scene capped the commercial, with the Allstate logo and ‘‘You’re in Goods Hands’’ tagline offering a counterpoint to Haysbert’s final question. A number of other commercials featuring Haysbert followed. In ‘‘Chop Shop’’ he stood in a dank garage where thieves ripped apart a stolen SUV to sell for parts, and he spoke about Allstate’s 600-person fraud team. In ‘‘Guardrail’’ he stood next to a crumpled highway guardrail to talk about Allstate’s 20 percent discount for people with good driving records. The spot called ‘‘Boiling Turkey’’ showed Haysbert in a backyard with a deep-fat turkey fryer, which was used to illustrate the potential of holiday mishaps, whether they were caused by fryers or car accidents on icy roads. In ‘‘Life Raft’’ he compared Allstate to a life raft and other insurers, such as GEICO, to little more than a circular life preserver—a zero. In addition, the spot promoted new policy features that dovetailed with the marketing campaign: Accident Forgiveness, which prevented rates from increasing in the event of an accident, and New Car Replacement, so that if a car was ‘‘totaled’’ the policyholder received a new car rather than a check that deducted appreciation. Allstate built on the ‘‘Our Stand’’ campaign in 2004 and 2005. Haysbert appeared in television, radio, and print advertisements that were specifically aimed at African-Americans. Because research indicated that these consumers relied heavily on the referral of family and friends when buying car insurance, the advertisements centered on family reunions. Also in 2004 Allstate targeting the Hispanic market by airing four Spanish-language television spots featuring actor Esai Morales. The tagline for these executions was ‘‘As´ı piensa Allstate’’ (That’s what Allstate believes). The Hispanic component of the ‘‘Our Stand’’ campaign also included radio, print, and outdoor elements. In addition, the ‘‘Our Stand’’ campaign was used in 2005 to introduce a new Allstate product: Your Choice Auto Insurance, which could be customized to suit individual needs.

Allstate was pleased with the ‘‘Our Stand’’ campaign.
The television spots polled well with consumers. According to USA Today ’s Ad Track survey, 17 percent of consumers liked the commercials ‘‘a lot.’’ While that number was below the Ad Track average of 21 percent, it represented a strong showing in a category that consumers generally did not like. The campaign was also recognized by advertising trade publication Adweek, which named ‘‘Boiling Turkey’’ a ‘‘Best Spot’’ in December 2003. Haysbert’s work was also much appreciated by Allstate. In fall 2005 the company renewed his contract to serve as Allstate spokesperson through the end of 2006. The most important measure of the campaign’s success, however, was to be found on Allstate’s balance sheet. While the company reported no hard numbers, it did note in its 2003 annual report, ‘‘[R]eaction, as measured by increased contact with agencies,, and 1-800-Allstate, has been positive.’’ Allstate had pulled the plug on the previous marketing campaign after 18 months, so the fact that the company renewed its commitment to Haysbert through 2006 indicated that the ‘‘Our Stand’’ campaign was having an appreciable effect on Allstate’s bottom line.

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