Financial Services Market: Cha-Ching! The Value in Going Direct

The financial services and insurance industries were in a pioneering group that caught onto the value of “going direct” to consumers ages ago, and they’ve been honing their D-to-C advertising messages ever since. As the direct approach became a mechanism of choice for a wider group of advertisers — and as digital, social, and mobile entered the picture — both industries were standing by, waiting eagerly to fold these new direct channels under their advertising umbrellas.

In many cases, these firms were already using direct response TV to reach into consumers’ living rooms and speak directly to them through the TV medium. Using a mix of short-form and long-form shows, financial services firms used the longer advertising formats to tell their stories, offer testimonials, and convince viewers that their products and services would make their lives easier, safer, and — in some cases — more financially secure.

When the digital era hit, companies like Colonial Penn Life Insurance were ready to jump in and add online, mobile, social, and other channels to their direct portfolios. “DRTV is an anchor for us, and it really helps drive awareness and response across a variety of mediums like direct mail,” says Joel Schwartz, president, “but now we’re also doing a lot more web and digital to support those efforts.”

Adding digital, mobile, and social to the mix has helped companies like Colonial Penn offset rising media costs and the perception that fewer people are watching and/or engaging with TV in the “traditional” sense. Coming off the 2016 election year, for example, Schwartz says tighter inventory and higher media costs were expected to “shift back to normal” in 2017.

But this hasn’t happened. In fact, Schwartz says he’s seen more general advertisers across all industries purchasing less upfront media. Now those same advertisers are trying to negotiate with the networks and broadcasters to buy up remnant space that was historically reserved mainly for DRTV advertisers.

“What they’re willing to pay for the remnant space, compared to what they used to pay for the upfront space,” says Schwartz, “is proportionately higher than a typical DRTV advertiser is willing to pay for that space.”

This willingness to pay a little more for remnant space has created an interesting supply-and-demand scenario during a post-Olympic/post-election year. And this, says Schwartz, has pushed long-time users of DRTV like Colonial Penn to “balance out” its advertising portfolios to include more digital and direct mail. But even in this challenging environment, Schwartz says the insurance firm will continue to view DRTV as an “extremely important” part of its mix.

“DRTV has been the model — within Colonial Penn’s focus — for decades,” says Schwartz. “And while at one time it may have been the only mechanism, now it’s simply part of an overall portfolio approach that we’re using.”
Prudential’s Masterpiece of Love short-film series is designed to connect consumers
to its brand with inspiring real-life stories and a website that draws people in to share
their own stories.

An Effective Way to Reach Consumers

A quick perusal of the most recent Jordan Whitney ranking of infomercials reveals two finance-related products that currently grace the top 10: LifeLock identity protection and Yancey Events real estate seminar. But if you dig down a little deeper — and into such research outlets as DRMetrix — the number of financial and insurance companies using the direct-to-consumer approach is plentiful.

In January, for example, Green Shield Canada (GSC) kicked off a new DR response campaign for its SureHealth™ product. Created by Northern Lights, which has also produced shows for insurance provider Square One, the “Protect Yourself” campaign includes 30-, 60- and 120-second commercials.

“Direct response marketing is key to effectively reaching Canadians who need protection from rising healthcare costs,” Bob Doyle, director of individual market strategies at Green Shield Canada, said in a press release. “As the country’s only national not-for-profit health and dental benefits specialist, we’re confident that SureHealth™ plans are an affordable and comprehensive option.”

On the financial front, companies like U.S. Money are using DRTV and Larry King to sell government-issued gold, silver, and platinum legal tender products. Last year, the firm launched a new 28-minute show titled “2016 Gold Summit,” with King serving as its moderator.

Samantha Chow, senior analyst with Aite Group in Boston, isn’t surprised by the number of insurance and financial services firms that are using the direct approach to reaching new customers while engaging with existing clients. In fact, she says the life insurance industry is posting particularly good results in this area.

In her recent Life Insurance: Trends in U.S. Marketing and Advertising Spend report, Chow says the top three categories where life insurance carriers placed their budget dollars in 2016 were direct marketing (average of 25 percent of budget), TV and radio (23 percent), and print (18 percent). With the majority of all life insurance carriers focused on D-to-C, Chow says, “This breakdown is in line with the current goals and strategies of this industry.” More of them are also using social media (a 27-percent increase vs. 2016), she notes, with DRTV and mobile marketing both posting 19-percent increases in 2017.

Chow says D-to-C is helping insurers address the nation’s prevalent and growing generational gaps — particularly when it comes to “digital” versus “face-to-face” touches. “The generation gaps are making it more and more difficult for companies to reach their consumer bases in the way that those consumers want to be reached,” Chow explains, noting that insurance was historically extremely paper- and agent-based. And while the industry has been incorporating D-to-C channels like DRTV and direct mail for years, the digital revolution (i.e., texting, push notifications, mobile marketing, etc.) has pushed it into a completely new environment.

And that environment isn’t always friendly, nor is it easy to harness. For one, she says finding the right product to sell via direct channels can be challenging. Compounding that issue is the reality that most insurance firms are using legacy software systems that don’t always “talk” to one another, and that don’t readily share information (e.g., customer contacts and emails) in a way that behooves the entire firm. “Some of the systems in use today don’t even let consumers fill out applications or obtain insurance quotes online,” says Chow.

“Because the systems are so old and antiquated, they don’t support the new types of functions and features that consumers have come to expect,” she adds. “To offset this challenge, companies are layering different tools on top to get to a point where they can truly be ‘digital.’”

As they continue to address this issue, insurers as a whole (not just life insurers) are also looking for ways to simplify a product that’s notoriously complex and difficult to understand.

“You can’t take a [complicated] product that you’ve been selling through an agent, be it universal insurance, variable insurance, or another offering, and then turn around and try to sell that through the mail or even on TV,” Chow explains. “It needs to be very easy to explain — and be understood — within the very small timeframe that you have for a commercial, in order to get customer buy-in quickly.”

She says the scenario gets a little easier online, where insurers can give prospects the opportunity to “click here” in an email or on a banner ad, knowing that once the add captures the consumer’s attention, the sales follow-through can start once that mouse is clicked.

Authentic and Relatable Works

At Prudential Financial in New York, Amy d’Oliveira, vice president of integrated strategy, says the company is doing a lot of “testing, learning, and evaluating” right now in an effort to find the right advertising mix for its products and services.

“We’re finding that there’s really no ‘one-size-fits-all’ for us,” says d’Oliveira, “and that it really depends on the objectives, the audience, and what we’re trying to achieve.”

Regardless of which advertising mechanism it’s using, Prudential attempts to find a sweet spot between its storytelling and media strategy. That sweet spot must be both authentic and relatable for the audience, says d’Oliveira.

In February, for example, the company introduced its Masterpiece of Love short-film series. It features the stories of four people who have endured significant personal losses and explores their relationships with artists commissioned by Prudential to bring the stories to life. To deepen its connection with viewers, the company set up a Masterpiece of Love website, where visitors can share memories and photos of loved ones to create a collective digital work of art.

Not a user of traditional “1-800 number” direct response, Prudential uses an all-encompassing approach to D-to-C with an eye on connecting with consumers and building a brand narrative that helps prospects take the next step. “We want to create a way forward for consumers to engage with us,” says d’Oliveira, “be it via a website, a phone call, or some other channel.”

With that in mind, she says Prudential sets up media strategies that include mass media, content programs, and sponsorships — all of which are supported by targeted performances (e.g., display, programmatic, etc.) that help support “the larger mass message.”

d’Oliveira says Prudential’s advertising approach is dynamic in nature, and that it evolves right along with technology and consumer preferences. “I think we’ve gotten more sophisticated in that regard,” she adds, “especially in terms of how we differentiate our messaging based on what people need and what’s relevant.”

Going forward, d’Oliveira says Prudential will continue to explore the programmatic advertising space while also honing its video strategy. The company is also moving away from using impressions as its primary evaluation criteria.

“We’re looking at combining more metrics in order to look at what we call ‘experiential criteria,’” d’Oliveira explains. “What we’re really looking to do is measure our relevance to our target audiences and demonstrate and measure how people are playing a more participatory role with us.”

Moving Targets

According to Chow, more insurance firms are shifting their budgets into the D-to-C space, where they’re effective in creating the customer experience, engaging those customers, and then tracking the success of their ad dollars.

Colonial Penn has been a long-time DRTV advertiser but also continues to
branch out into newer media opportunities to reach an expanding
demographic base.

“Going forward, I think we’ll see more budgets and marketing spend shift into the backend customer experience,” Chow says, noting that one of the main challenges companies will face will continue to be truly understanding the ROI of those efforts (namely, the ROI for specific digital channels).

“Insurance companies can send out 50 to 100 different direct mail pieces to market a single product, and then track the success of those mailings via source codes,” says Chow. “It’s not as easy when you’re dealing with email or banner ads.”

On a positive note, Chow expects a proliferation of software programs, applications, and tools meant to help companies wrap their arms around those elusive ROI numbers. “Once insurance firms can track at least some of that ROI,” she says, “they’ll be able to hone in on what works, and specifically, what works for what type of person.”

At Colonial Penn, Schwartz says the company will continue to find new ways to reach consumers that aren’t necessarily sitting in front of their TV sets. “Our customers are becoming more digitally and web savvy with each passing year,” says Schwartz, “so the need to reach them and track them across a variety of mediums is becoming increasingly important.” Some of that urgency comes from the fact that traditional metrics like “last touch attribution” and “point of purchase” are moving targets in the online world.

“In the web and digital spaces,” says Schwartz, “these [measures] have gotten a lot murkier than they’ve been historically.”

To work through these and other issues in the D-to-C space, Schwartz says the company will continue to test, learn, and optimize. “This not only helps us serve our current customers more efficiently, but it will also help us [leverage] newer techniques as we begin to roll out other products over the course of the next 12 to 24 months for a slightly younger, slightly wealthier audience,” he says. ■