A Look on Geico's Marketing Strategy

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Insurance | Business | Geico Insurance

In March 2014, Geico started the ambitious climb to become the top insurance giant when it became the second largest insurance company in the United States for the first time. That year, Berkshire Hathaway (BRK. A BRK. Berkshire Hathaway Inc280, 170. 00-0.11% auto insurance company made with Highstock 4. 2.6) exceeds the amount of the premium for the Allstate cars collected. Currently, State Farm Mutual still leads the market with market share nearly double that of Geico, with State Farm Group has 18.7% market share, compared with a Geico's 10. 8%. Allstate Insurance Group, which comfortably occupies the second place for years, lagging far behind the Geico by 10%. A leader among the force behind the success of Geico is the innovative initiatives and user-friendliness.

Light and funny Geico ads stand out in contrast to the style of Allstate. As shown Forbes, Geico also remained loyal to the market segment that values price overpaying a traditional agent network model.

Positioning in the segment and target laser focus on brand management has helped her climb the rankings in the climb to the top position, according to a Bloomberg article entitled  "Ridiculous Geico Ads are working.  "Advertising is very important for online insurance providers especially parallel versus brick-and-mortar that is seen with Allstate and State Farm. Ad spending behind them and have been very successful since 2013. The Geico ads  "cannot be ignored" is named   "Best the Year 2016 Campaign's" from Age Age and also get the Film Grand Prix at the Cannes Lions International Creativity Festival. The ads are aimed at targeting the creativity of advertising's "pre-swivel ". Unique in its delivery but fundamental in the dialogues, all advertising begins and ends within the time limit of 5 seconds which should be watched before they can skip commercials. The ads also emphasize a focus on savings "  " versus "service.  "As Forbes pointed out, Geico's success has come from offering independence customers and relatively low price.

GEICO has a lot invested in advertising compared to other expenses. In an interview with Ad Age, Geico's Vice President of marketing, Ted Ward says,  "we better invest in technology rather than getting new marble floors and door. " his mind is to press charges, Geico can then offer a lower price, which is the basis of their great ads. Also according to Ad Age, most of the success is the result of Geico marketing use of consumer data to determine its advertising plans.

A very big advertising budget this doesn't come without criticism of j. Robert Hunter of the Consumer Federation of America touched spending time talking with Geico insurance business. About Geico's advertising budget, he stated:  "it pushes the level of interest rates since every penny the advertising made according to the rate. In addition, the cost of the lobby and other anti-consumer costs included in the price in all States except California. "

In the same article with the insurance business, Robert Hartwig, President of the Group of insurance agents property/casualty said that ad spending is only a small part of the budget of the company, Hunter stated that if the level of ad spending continues to skyrocket, they will finally affect consumers.

The Bottom Line

GEICO secures its place as it seems to have an insurance giant with his great advertising campaign and focus on strategic target markets. By keeping costs significantly lower than its competitors, Geico has soared in recent years. Supposedly, worries about the possible impact of the cost of advertising against the insurance premium in the future because of his clients (and competitors) have increased.