Display advertising’s share declines.
AUGUST 8, 2007 – Insurers accounted for 28% of the $2.54 billion that the financial services industry spent online in 2006, according to eMarketer estimates.
That level of spending on Internet advertising makes the financial services industry second only to retail.
Spending on Internet advertising for insurance companies and products will continue to grow to $2.31 billion in 2011. Online ad spending in 2007 by insurance companies will reach $980 million, up 36% over 2006.
“Growth in insurance spending will outpace that of the financial services category as marketers target the wave of retiring baby boomers and as the health insurance industry begins to cope with the impact of health savings accounts and dealing directly with the growing numbers of individuals purchasing their own health insurance policies,” says Lisa Phillips, eMarketer Senior Analyst and author of the new Insurance Marketing Online: Meeting Customer Expectations? report. “And look for the trend to continue as more consumers not only turn to the Internet to compare quotes, but to apply directly for policies from auto, health, life and homeowner insurers.”
At first glace, the figures indicate that the insurance industry has fully committed to online advertising. But a closer look reveals a surprising trend.
“Unlike spending in other industries such as automotive, insurers continue to put more money into television, year after year,” Ms. Phillips says.
According to TNS Media Intelligence, TV advertising for the category grew nearly 30% in 2005 compared with 2004, and another 23.1% in 2006, while Internet advertising fell slightly.
There are good reasons for insurers’ continued love of television,” Ms. Phillips says. “Insurance ads on TV move consumers to act.”
comScore data show that 59% of respondents would go online first after seeing a TV ad for an auto insurance company, either to visit the Web site specified in the ad, to visit the company’s corporate site or to use a search engine to find a site for the company.
Conversely, only 13% of viewers would call a toll-free number if one were specified in the TV ad. Another 8% would skip the advertised Web address and look online for a way to contact a local agent.
“For the insurance industry, at least, it seems that the combination of TV and the Web delivers a powerful one-two punch,” Ms. Phillips says. “And in that order.”
Internet display ads dropped from 7.3% of this sector’s total ad spend in 2004 to just 3.8% of the total in 2006.
The decline in Internet ad spending most likely indicates that advertisers are moving spending out of display ads into search and rich media.
Another explanation for the reported drop in online insurance advertising is the fact that TNS does not measure search or broadband video advertising, two of the most effective ways insurers have to brand their products and services and explain them to online shoppers.
“eMarketer estimates that insurance advertisers spend between 45% and 50% of their online budgets on search terms, and less than 20% on display ads,” Ms. Phillips says. “Because lead generation for local agents and distributors is critical, this format probably receives a great deal more attention than in other industries such as consumer electronics and consumer packaged goods.”
To get full coverage of all these questions, please read the new eMarketer report, Insurance Marketing Online: Meeting Customer Expectations?
By gathering the latest research and news from over 1,000 sources, eMarketer has established itself as the world’s leading provider of internet and e-business statistics. eMarketer’s Web site is at www.emarketer.com.