Marketing Campaign Case Studies

Sunday, December 28, 2008


Relatively obscure until the 1990s, GEICO, a direct marketer of auto insurance, began to make its mark when it expanded beyond direct-mail solicitation and spent money on other media, especially television. Unlike rival insurers, GEICO took a lighthearted, humorous approach to its television spots, which produced steady growth for the company. Nevertheless, many consumers were still not certain about the pronunciation of the company’s name, often referring to it as ‘‘gecko’’ when calling for a rate quote. In the summer of 1999 GEICO aired a 15-second television spot that featured a cartoon gecko, a tropical lizard, conducting a press conference to tell people that it was not he but GEICO that could save them money on their car insurance and to please stop calling him. The gecko spot was just a single quirky commercial and was not intended as the start of a long-term campaign. But in reaction to an actors’ strike, GEICO instructed its advertising agency, the Martin Agency of Richmond, Virginia, to develop more gecko spots. The character became popular, and GEICO added more human features to him and created a new series of commercials featuring the gecko. In 2002, in a spot titled ‘‘The Meadow,’’ he ran through a field hand in hand with an adoring female customer. In ‘‘Big News,’’ a spot that aired in 2005, he urged fellow lizards to spread the news that GEICO could save people money. In the meantime GEICO released two other campaigns that ran alongside the ‘‘Gecko’’ campaign, which had become a general brand-building effort for the company but still received a hefty share of the more than $200 million that GEICO spent on advertising each year. Although it never garnered any major advertising awards, the ‘‘Gecko’’ campaign proved popular with consumers and played a major role in GEICO’s emergence as one of the leading auto insurers in the United States. In 2005, during New York’s Advertising Week, an annual industry event hosted by the American Association of Advertising Agencies, the gecko was named one of advertising’s top icons.

For 60 years, starting in the 1930s, GEICO was a relatively unknown automobile insurer that targeted federal government employees and noncommissioned military officers with its direct-mail pitches. By concentrating on customers with sterling driving records, it was able to offer low rates and carve out a profitable niche in the marketplace. In the 1990s GEICO, by then the seventhlargest auto insurer in the United States, looked to expand its client base. In 1994 it hired the Martin Agency to handle its advertising and add television, radio, and print to the marketing mix. The public company soon came into the orbit of Berkshire Hathaway, Inc., controlled by legendary stock-market investor Warren Buffett, who had owned GEICO stock since 1951. He took GEICO private in 1996 and made it a Hathaway subsidiary.
Commercials for car insurance were traditionally straightforward, serious appeals. To make GEICO stand out and to humanize car insurance, Martin decided to rely on humor. It also developed a brand promise in a slogan that would be reinforced campaign after campaign:
‘‘Fifteen minutes could save you 15 percent or more on car insurance.’’ Inherent in the promise was another key element in the marketing strategy: a call to action. Because GEICO insurance was not sold to brokers, customers had to be moved to mail in a response, call a toll-free phone number, or, with the advent of the Internet, visit the company’s website. To assure that GEICO was to customers more than a computer screen or a voice on the telephone, the agency also had to put a face on GEICO itself.
The new advertising emphasis quickly produced solid results for GEICO. The company had been writing approximately 26,000 premiums a year, but that number improved to 39,570 in 1995 and to 69,600 in 1996. When Buffett took control, GEICO was told to accelerate the pace of its growth strategy even more. Hence, ad spending increased from $10 million in 1995 to $270 million in 2000. With a great deal of money at its disposal and significant creative latitude, the Martin Agency produced a variety of humorous ads. In 1999 the creative team at Martin considered the common mispronunciation of GEICO as ‘‘gecko,’’ the small tropical lizard. This brainstorming session led to a single 15-second television spot, which gave birth to an advertising icon and initiated a long-term campaign for GEICO.

GEICO and other automobile insurers tried to reach one of the broadest markets possible: virtually everyone who drove a car. ‘‘Who is GEICO selling to?’’ asked Seth Stevenson, writing for the online magazine Slate. ‘‘Pretty much everyone—man or woman, gay or straight, black or white, hip or hick. If you drive a car, they want your business.’’ Because older drivers tended to stick with their longtime insurers, GEICO hoped to appeal to a younger audience, roughly 25 to 40 years of age. GEICO vice president of marketing Edward Ward told USA Today ’s Michael McCarthy in 2005, ‘‘We have a lot of information that [says] those are the people who shop. We want to fish where the fish are biting.’’

GEICO had to contend with well-entrenched competition. King of the hill since the 1940s was State Farm, which controlled nearly a fifth of the market. It had spent considerable sums to establish its own brand promise, one that did not rely on price: ‘‘Like a good neighbor, State Farm is there.’’ Second to State Farm was Allstate, with a share of more than 10 percent. It also had a wellknown slogan: ‘‘You’re in good hands with Allstate.’’ Less entrenched was the Progressive Corporation, which quickly stepped up its ad spending to fend off GEICO. Progressive also focused on price, making its mark through the use of the Internet and the promise to present its best quote alongside those of its chief competitors.
The heavy marketing activity of Progressive and GEICO forced Allstate to begin competing on the basis of price. While State Farm continued to remain above the fray in terms of pricing—stressing instead service and reliability—it felt enough pressure from the competition to increase its own advertising budget significantly. Furthermore, because of several factors, there were now greater profits to be made from car insurance, prompting insurers to scramble for more customers. One reason for the increased profits was that during the 1990s there were major improvements in the way cars were built, which resulted not only in fewer repairs but also fewer accidents. Also of importance was the graying of America: as baby boomers grew older, they began driving slower, again leading to fewer accidents, fewer claims, and greater profits for insurers. The fastest-growing segment of the auto insurance business was the direct model, as pursued by GEICO. In addition to State Farm, Allstate, Progressive, and other companies selling policies through agents—such as Travelers, Hartford, Nationwide, and AIG (American International Group)—GEICO had to deal with a new breed of direct marketers leveraging the power of the Internet. Another challenge was the fact that old-guard firms were beginning to use the Internet to add direct-sales capabilities to their offerings.

In July 1999 GEICO ran a television spot that featured a computer-generated cartoon gecko holding a press conference at which he declared, ‘‘I am a gecko, not GEICO. Please stop calling me.’’ GEICO’s Ward told Jim Lovel of Adweek, ‘‘It was a throwaway 15-second spot. . .It was an odd spot that didn’t fit, but we thought it was funny.’’ According to Lovel, ‘‘The gecko could have disappeared after the spot, if professional actors had not gone on strike that year. Because of the absence of talent, GEICO asked Martin to produce more spots with the gecko. The company was inundated with calls and letters from people who wanted to see more of the lizard.’’
The Martin Agency developed a number of television spots in 2000 in which the gecko, with his refined British accent, made the same point repeatedly: he could not save viewers money on their car insurance—only GEICO could. At the beginning of 2001 the agency proposed a change of tack to GEICO. Martin’s Steve Bassett, a senior vice president and group creative director, told Shoot magazine’s Sloane Gaylin that the agency’s creatives had thought it would be an interesting twist if the gecko gave up on telling people not to call him and decided instead to finally start working for the company. Out of this idea flowed several new gecko spots. In the one called ‘‘Audition’’ the gecko tried to land the GEICO spokesperson position and encountered an outof-work veteran of television commercials, the Taco Bell Chihuahua. Other spots in the series, ‘‘ ‘Hands,’’ ’ ‘‘Tail,’’ ‘‘Employees of the Month,’’ and ‘‘Food,’’ showed the gecko working at the GEICO office. In ‘‘Action Figures,’’ a parody of the movie Toy Story, a gecko doll broke up a fight between two action figures in a sleeping child’s bedroom while telling them about the GEICO’s affordability.
In order to make the gecko more suitable to these new scenarios, the animators reworked him to include more human attributes. In the press conference commercial the gecko had crawled on the microphone on all fours, but in later spots he moved on two feet and carried himself more like a person. Thus, in the 2002 spot ‘‘Meadow’’ he was able to hold hands, run down a beach, and spin around in a field with a woman. Although the gecko commercials proved popular, Martin developed two other television campaigns that ran in parallel: ‘‘Good News,’’ which consisted of comical spots in which someone told an unsuspecting person that they had just received good news, only to reveal that the news was that they had saved money on their car insurance; and a series of ‘‘mini campaigns’’ featuring a mix of humorous commercials. The three campaigns each carved out their own territory in GEICO’s overall marketing strategy. The ‘‘Good News’’ spots focused mostly on the cash-savings message, while the gecko spots became more of a brand-building vehicle, keeping the GEICO name front and center in the minds of consumers.
GEICO added another twist to the gecko-as-spokesperson spots in the fall of 2005. In the commercial ‘‘Big News,’’ the gecko, after two years of spots in which the only words he spoke were ‘‘well, hello,’’ delivered a pep talk to a group of other lizards in the woods, sending them forth to spread the big news that, by visiting, people could save hundreds of dollars on car insurance. Other spots featured the gecko encouraging other lizards to pitch GEICO. To exploit the gecko character even further, GEICO introduced an amateur filmmaking competition, giving people a chance to submit their ‘‘15-second conceptual movie trailers’’ involving the gecko character. The goal was to appeal to the 18- to 34-year-old demographic as well as to a create a viral campaign, one that would take on a life of its own and perhaps drum up some new ideas for using the gecko in future commercials.

In the year after GEICO introduced the gecko character, the company generated sales of $5.6 billion. By the end of 2003 revenues had grown to $7.8 billion. It was impossible to say how much of that success could be attributed to the ‘‘Gecko’’ campaign, and with the launch of two parallel campaigns in 2003 and 2004, it became even more difficult to determine. There was no doubt, however, that the gecko had achieved the status of popculture figure. During New York’s Advertising Week in September 2005, the gecko tied with Juan Valdez, the face of Colombian coffee since 1960, as America’s favorite ad icon. The honor was determined by consumer votes. GEICO and the Martin Agency were still having fun with the character, as evidenced by the accolades they showered upon the gecko after it gained iconic status. In a press release Martin’s Basset commented, ‘‘He’s cute, he’s green, he works hard, he’s got a great attitude, and he could save people a lot of money on their car insurance.’’

No comments: