Data & Analytics

10:35 AM
Patrick Quigley
Patrick Quigley
Commentary
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A Plea to Insurers: Consider 'Co-Opetition'

Let other insurers advertise to the customers you can't give a policy to. What do you have to lose?

Marketing luminary John Wanamaker famously believed he was wasting half of his advertising budget but was unsure which half. At Vantage Media, we've spent a lot of time pondering that principle. We even created a website about it. It’s interesting for us to think about how our obstacles evolve just as our technology does. Today, advertisers aren’t wasting their money but, rather, spending it in smarter ways with more quantifiable results. But they’re not doing enough to keep up with technology and stay ahead of the curve.

As technology and training continue to evolve, we are presented with more opportunities for monetization, and in order to stay ahead of the curve, we must be willing to accept these new opportunities -- even those that may seem like risks or (dare we say?) collusion. An emerging strategy that CIOs and CMOs should be prepared to see in coming months is technology that allows competitors' advertisements on their websites. This is a huge opportunity, particularly so for the insurance market, which is in the business of providing services to buyers in active pursuit.

As is inevitable sometimes, one company is unable to provide coverage, based on a number of factors. Rather than presenting a “sorry page” to prospects and forcing them to turn away, this new tactic allows competitors to pay for ad space on your page to present their options to the buyer. You win, even though you’re unable to cover that buyer, as the loss translates into revenue from your competitor’s purchased ad space. Additionally, you’re helping that customer ultimately get what he or she needs: a policy.

[Yes, Insurers Can Be Innovative]

We already see the success of this technique at Amazon: “Looking for a coffee pot? We’re sold out, but check out this other site that has one.” Amazon wins because that other site paid for that ad space, so while it lost out on the sale, it still brought in revenue. The customer wins because he purchased exactly what he needed.

Beyond traditional opportunities, this tactic becomes more relevant during certain times for different industries -- like before open enrollment for health insurance companies. A recent survey by the Kaiser Family Foundation showed that among respondents who considered multiple health plans, 80 percent said their monthly premium was most important to them when choosing their current plans over other choices. Other factors, like range of benefits and recommendations, fell much lower on the scale (63% and 24%, respectively). At the end of the day, cost reigns supreme. If a buyer can’t get a product from you, and she's going to go to a competitor anyway, why not help her get there in a way that helps your bottom line?

We are only able to move forward as an industry by embracing the wide range of technical options -- and slaughtering the sacred cow of online marketing that suggests you can’t host an ad for a competitor’s offering. We have the power of data and analytics, but they’re useless if they’re not being incorporated into our online strategies to target relevant consumers in new ways. Not only does this require a certain amount of risk, but it also requires a great deal of collaboration between CIOs and CMOs, who operate in worlds that are becoming increasingly intertwined.

Fine-tuning tried and true methods like native advertising and mobile marketing, and embracing the new like competitor advertising, assures your company a seat at the table in years to come.

Patrick Quigley is CEO of Los Angeles-based advertising technology company Vantage Media and has more than 15 years of experience in sales, marketing, product management, and engineering with both public and private companies. View Full Bio

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Becca L
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Becca L,
User Rank: Author
11/29/2014 | 5:14:49 PM
Re: Collaboration
I find this idea interesting, and like you say Kelly, a win-win for everyone. A bit of profit is better than none at all.  This collaboration may be hard achieved as it requires all sorts agreements between competitors, but surely the positives here are clear. It's time to rethink online marketing strategy and aim for more one where customers and businesses all come out ahead.
RobertPaterson
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RobertPaterson,
User Rank: Apprentice
11/28/2014 | 10:55:30 AM
Re: Collaboration
I agree, and I also think the US insurance market needs to become more efficient, and reducing new business acquisition costs is a critical component. We would do well to learn lessons from compliance changes in the UK / Europe that capped policy costs, created commission disclosure, and forced industry wide cost reductions and distribution changes. The survivors were the ones that quickly changed and adopted new technology and co-marketing opportunities. Regardless of new consumer driven legislation in the US, the real threat is the emergence of retail distributors and brands that better understand their customers like Apple, Google, Amazon, eBay, who could easily undercut costs and change the competitive landscape. A good example is the Apple's new Pay System that gives customers a quicker and more secure way of shopping, whilst leveraging card company and retailer relationships. Next stop insurance? The common theme is that the customer, not the product, is now at the centre. In this context, cross marketing and carrier / distributor co-operation that helps create an exceptional customer experience by leveraging 'partner' relationships makes huge commercial sense.

 
Kelly22
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Kelly22,
User Rank: Author
11/27/2014 | 12:10:33 AM
Re: Collaboration
Wow, if that's the case then it sounds like those companies could really use a way to cut costs and maintain profits. This would be an interesting way to do that.
Nathan Golia
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Nathan Golia,
User Rank: Author
11/26/2014 | 7:14:07 PM
Re: Collaboration
This sounds like an interesting outgrowth of the insurance advertising arms race. They're spending so much money to one-up each other that now they need to find a way to work together to maintain profits. Interesting initiative.
Nathan Golia
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Nathan Golia,
User Rank: Author
11/26/2014 | 7:12:29 PM
Re: Collaboration
It shows the importance of maintaining profits in a tough market. Think about how much an insurance company spends on advertising. I've heard that for some companies their ad budget is equal to their premiums collected. Eking out marginal revenue can be helpful.
RobertPaterson
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RobertPaterson,
User Rank: Apprentice
11/14/2014 | 5:00:20 PM
Re: Collaboration
Shared advertising is a great idea, but why not go one stage further and co-market by offering non competing products that can be actually purchased / enrolled directly from each participating insurance carrier's website?

This would be like a Private Market Exchange among a select group of non-competing insurance carriers. The technology is there to do this now, seamlessly and inexpensively and without the enrollment / compliance headaches that have prevented co-operative marketing until now. We work with several major US insurance carriers in the Affinity and Direct to Consumer markets and we a very excited about the potential to leverage sales across partner organizations.

We have had discussions with a few insurance carriers and there is definitely interest out there. Its already happening in the Affinity / Association market, and its starting in the Direct to Consumer market. You potentially double your target audience by cross selling to a related customer group, whist retaining the brand and trust of each sponsoring party, and adhering the unique the sales and compliance processes of each carrier partner. Our technology platform already manages this in the Affinity and Association markets, so why not extend the model?

The advantages are an increased target market at virtually no cost, shared (reduced) marketing spend, and complete control by each party over every aspect of the advertising and content, sales process and consumer experience. It's also better for the consumer.

Robert Paterson is founder and Chairman of Afinium, a leading cloud-based technology provider for the US insurance industry, based in the US and Europe.

 

 

 

 

 

 

 

 

 
Kelly22
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Kelly22,
User Rank: Author
11/14/2014 | 3:44:33 PM
Collaboration
This is a good example of how a tactic from outside insurance could help the industry. It makes sense - if a customer can't buy the policy they want from one carrier, why not redirect them to another? The customer gets a positive experience, their original choice of insurer gets ad revenue, and another insurer may get a sale. It's a win for everyone involved.
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