Customers Embrace Interactive Media A Pitfall Or Opportunity For Insurance Companies?

As consumer Internet usage continues to grow, businesses are shifting their advertising

budgets in epic proportions away from traditional advertising channels such as direct mail, print, and television to interactive channels such as websites, search engines, email, and social media. Interactive marketing has been proven to be less expensive, easier to measure, and can produce a higher ROI (return on investment).

This growing shift from traditional to interactive is fueling the interactive marketing industry to growth at an explosive rate doubling to $55 billion by 2014 representing 21% of all marketing spend, according to Forrester Research.

How is the insurance industry affected?

AIS Medias latest survey titled, 2010 Insurance Customer Interactive Media Usage Survey, revealed that insurance customers are increasingly embracing the Internet when researching or shopping for insurance. Here are some of the survey highlights:

1. Customers indicate a strong preference to receive information via digital channels. When receiving insurance offers by postal mail, an overwhelming 59% of insurance customers indicated they would prefer to visit a website for additional information versus calling a phone number.

2. Consumer search engine usage continues to grow. The survey reveals that 32% of insurance customers turn to search engines as their primary method of researching their insurance policy options. Meanwhile, only 3% use Yellow Pages. Insurance companies must continue to focus on becoming highly visible through search engine optimization, search engine advertising (PPC) and social media optimization.

3. Given the choice to purchase insurance online, one-third (33%) of customers surveyed said they would prefer to purchase their insurance online.

4. Nearly one-third of insurance customers indicate that they are either extremely, very or at least somewhat dissatisfied with the usability of insurance company websites. The majority (49.5%) indicated that they are only somewhat satisfied. Its imperative that insurance companies continue to improve website usability, including ease of navigation and access to relevant information. If satisfaction levels drop among the largest, somewhat ambivalent segment, sign-ups, referrals, retention, and revenue could be adversely affected. The target very satisfied to extremely satisfied group is more likely to provide a higher lifetime value and less likely to desert to the competition.

5. Customers insurance purchase decisions are influenced by various traditional and interactive marketing channels. The survey reveals the most influential marketing channels are (in descending order of influence): industry ratings and reviews (64%); online consumer ratings and reviews (57%); company website (54%); TV, radio and print advertisements (48%); postal mail advertisements (25%); social media i.e. Facebook, Twitter, etc. (22%); and telemarketing (5%).

Ultimately, the survey demonstrates insurance customers purchase decisions are increasingly influenced by interactive channels such as information found on insurance company websites, online consumer ratings and reviews, search engines, social media interaction and online advertisements.

Leveraging interactive marketing to multiply advertising response, ROI and measurability

Given that 59% of insurance customers prefer to respond to a direct mail offers by visiting a website instead of calling a phone number, both the response rate and ROI from a direct mail campaign can be substantially increased by effectively integrating the interactive channel.

Although promoting a website in a traditional advertisement is an easy-to-understand concept, an overwhelming number of advertisers today still make the fatal plunder of directing prospects to a website home page instead of an offer-specific web page (landing page). As a result, prospects are taken off-path and response rates are reduced.

Since the majority of all web traffic arrives at a company home page, directing prospective customer to a website home page decreases the measurability of a specific marketing campaign. Instead, an advertisement should direct prospects to visit a unique, offer-specific web page (landing page) via a PURL (personalized URL). The design of the landing page should closely resemble the advertisement for continuity and direct the prospect to a specific call-to-action (CTA) such as: completing a form, downloading information, calling a phone number, or make a purchase. With a proper analytics system installed, landing page visits and actions can be precisely tracked and analyzed. Additionally, various offers can be tested via multivariable A/B tests and landing pages optimized to produce maximum response rates and to demonstrate a clear marketing ROI. Furthermore, the knowledge gained from landing page optimization can be directly applied to the traditional advertisement to further increase response rates.

At risk insurance companies

Virtually every type of company today is shifting marketing budgets from traditional advertising to interactive marketing to reach the growing online audience.

As insurance customers affinity for the Internet continues to grow rapidly, companies that have not effectively embraced the interactive marketing channel will simply fail to meet the expectations of an increasing number of customers, putting themselves at a competitive disadvantage. Theyre risking damage to their company brand, reduced market share, and higher future expenses as they race to catch-up.

Higher marketing costs are ultimately passed on to stockholders in the form of lower profits or to consumers in the form of higher premiums. CMOs or VPs of Marketing who are not implementing an effective interactive marketing strategy could be viewed as fiscally irresponsible and held accountable. In contrast, interactive marketing-savvy companies can exploit a unique window of opportunity to capture substantial market share.

Download a complimentary copy of the 2010 Insurance Customer Interactive Media Usage Survey Results at aismedia.com/insurance2010.

by: Thomas Harpointner

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