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Why The Insurance Industry Doubled Down On Radio In 2020.

First in a two-part series on insurance advertising on radio

Despite a global pandemic that decimated some ad categories, insurance spending is booming on radio. At network radio alone, total spending in the category rose 28% in the first ten months of the year to $125.8 million, from $97.9 million last year, according to Miller Kaplan.

Progressive, network radio’s top insurance client, doubled down in 2020, boosting its network spend 44% year over year. Allstate roared back, pouring tens of millions into network radio to rank second, after spending less than $1 million during the comparable 2019 period. GEICO, Liberty Mutual and State Farm each shelled out more than $10 million on network radio during the first ten months of the year.

The robust growth goes beyond network radio. Insurance spots in the 110 markets measured by Media Monitors reached 7.5 million occurrences through Nov. 12, up 38% from 5.5 million in the same period in 2019, led by Progressive (2.0 million) GEICO (1.7 million) and Allstate (1.2 million).

“Insurance continues to be a big spender in audio in 2020 with a significant increase in spend in Q3 and Q4,” says Christine Travaglini, President at Katz Radio Group. She estimates the category will finish 2020 up 7-10% at the national rep firm.

Pandemic Impact

Facing financial hardships from the pandemic, many Americans are shopping for a better price across all product categories, including insurance. “They’re looking for more flexible billing and payment options,” says Tammy Greenberg, who heads up Business Development efforts at the Radio Advertising Bureau. And the COVID outbreak has more Americans in the market for life insurance. “There are specific products and services that are in higher demand and insurance companies have seen the results from radio,” says Greenberg.

Radio’s reach, effectiveness and trusted relationships with consumers are helping it grab a larger piece of the insurance ad pie, experts say.For media planners, it’s a matter of fishing where the fish are. According to a national survey conducted by MARU/Matchbox in September, 30% of heavy AM/FM radio listeners are likely insurance shoppers, compared to 23% of heavy TV viewers.

“When we talk to the insurance brands, they tell us they can see a direct relationship between ad spend and impact,” says Westwood One Chief Insights Officer Pierre Bouvard. “Site traffic and new customer leads go up. It is very compelling, especially in the auto category.”

Data from TransUnion backs that up. For most of the period from 2012 to 2019, shopping activity for auto insurance directly correlated with advertising spend. “The data shows the more you advertise, the more leads you’ll get,” says Greenberg. “Insurance companies understand that.”

While auto insurance still drives the bus, insurers used radio to market other forms of coverage in 2020. “As people adjust their lives during the pandemic, other insurance products became more active,” says Travaglini. “For the first time, many consumers are buying and renting RVs, with demand so high that Forbes reported Winnebago has a two-year waiting list. Boat usage increased this summer as well.”

Booming home sales were another factor. Taking advantage of lower mortgage interest rates, existing home sales shot up 26.6% in 2020, according to the National Association of Realtors, causing a surge in new home insurance. The year also brought a record-breaking number of natural disasters, including hurricanes, wildfires and torrential rain, which Travaglini says “triggered insurance providers to quickly get on the airwaves to connect with their policyholders.”

The return of live sports was also a contributor. USAA recently booked new incremental budgets for NFL and college football radio play by play.

How Progressive Spells ‘Radio’

Research from Nielsen shows creative is the most impactful element in advertising and the insurance category has some of the most entertaining spots on radio. Employing a mix of unorthodox creative and DJ endorsements, Progressive captured the Radio Marketer of the Year Award at the 2019 Radio Mercury Awards. Accepting the award, CMO Jeff Charney coined an acronym to illustrate the value of the medium. R-A-D-I-O stands for Relevance, Authenticity, Disruption, Insights-based and Out-create, he said.

But radio’s ability to deliver audience tonnage – both young and old – is also a factor. A Nielsen Media Impact study based on real-world campaigns for four major auto insurance brands found the younger the demo, the more incremental reach AM/FM delivered. The study showed 38.2% of adults 18-34 were reached by Progressive’s $42.8 million TV campaign in July 2020. When the $3.8 million radio buy is included, the reach doubled to 77.3%. Similar results were documented for Allstate (+94%), GEICO (+58%) and State Farm (+59%).

In a year when the context of advertising has never been more critical, marketing car insurance on radio became a no-brainer. After all, heavy radio listeners spend more time in their cars than the average. Says Bouvard: “If you want to sell anything to do with a car,AM FM is perfect because you’re actually reaching people on the very thing you want them to be thinking about.”

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