GEICO TAKES VARIED ROADS TO CUSTOMERS

Trio of TV Ad Campaigns Succeeds in Wooing Different Target Audiences
Could airing multiple television campaigns concurrently drive your sales?

We've seen a new and unique practice of running simultaneous and differing television campaigns representing the same product.

Could you counteract the television effort of a competitor by targeting your message to varied potential customer segments, each with a different version of the same message?

Does this strategy really work? And is it worth the extra expense?

Geico Insurance, with its three different TV campaigns, is an excellent example of this strategy at use.

We spoke with Ted Ward, vice president of marketing at Geico, and Steve Bassett, creative director at the Martin Agency in Richmond, Va., about this breakthrough idea.

TelevisionWeek: First off, how did the creative ideas of the "Caveman," the "Gecko" and the "Spokesperson" ads begin?

Steve Bassett: The Cavemen idea started with a simple laser-focused creative strategy to "tell people that Geico.com is easy to use." Cavemen are historically dumb, reasoned the creative team, so we said, why don't we say Geico.com is so easy to use a caveman could do it? Little did the creative team or Geico realize that cavemen are still around … and that they're tired of being portrayed as Neanderthals.

The Gecko was created as a one-time spot to help people remember and pronounce the name "Geico." Hence the Gecko's dialogue in that very first Gecko commercial: "I'm the Gecko, not to be confused with Geico that can save you hundreds on car insurance. So please stop calling me!" This was supposed to be just one spot, but like a lot of the advertising Geico does, the Gecko developed a loyal following. And as CGI [computer-generated imaging] has evolved, so has the Gecko. Today, he's

Geico's self-aware advertising icon. He was voted America's favorite ad icon in 2005.
The Geico "Testimonials" were developed more from an executional strategy. Geico was receiving hundreds of letters from happy Geico customers about the company's great claims service. The challenge was, how do we execute a traditional advertising technique-the testimonial-in a fresh, engaging way? Or, put another way, how would Geico do a testimonial? The answer the creative team came up with was truly inspired. "Brenda Coates is a real Geico customer, not a paid celebrity. So to help tell her story, we've hired Mr. Burt Bacharach." Or Little Richard or Charo or Peter Graves.

TVWeek: What types of different customers do you want to reach with television?

Ted Ward: The Geico target demographic is very broad-basically anyone who drives a car and needs car insurance. That's why we have a multilayered campaign strategy that has multiple campaigns running on television at the same time. Some people like the Cavemen. while some are huge Gecko fans. Others love our testimonial campaign and Little Richard screaming, "mashed potatoes, gravy and cranberry sauce!" We use a lot of different tools in our marketing arsenal, but are probably best known for our presence on television.

TVWeek: What do you expect television to do for Geico?

Mr. Ward: Television helps make the Geico brand ubiquitous. If our customers stay in for the night, they see us. If they go out, there's a good chance they'll see us on a flat-screen in a restaurant, too. Car insurance isn't a really high-interest category. People really only think about it when they need it or when they get a bill. Our job is to make them think about car insurance-and we like to do it in a fun, entertaining way. Our characters come to life on television in a way that America has fallen in love with. More than any other medium we use, we expect television to deliver our brand personality, and it delivers big-time.

TVWeek: Do you use your Web site as a "landing point" for consumers before they actually call?

Mr. Ward: We've worked hard to make access to our company really easy, no matter how our customers choose to reach out to us. If they're comfortable online, they can get a rate, get a policy and even pay their bills right on Geico.com. If they want to start online and then move to one of our associates on the phone, they can do that, too. And of course our 800 phone number is always available. We even have a few offices around the country for folks who want to walk in and do it in person. We like to think that we are able to be reached online, over the phone or at a convenient local office.

Our Web site has become a huge part of our company in the past few years, and we promote the Web address in every television spot we run.

TVWeek: How is the series of campaigns going?

Mr. Ward: Our success has been phenomenal. In terms of premium growth, Geico has nearly quadrupled the size of the company, going from slightly under $3 billion in 1998 to more than $11 billion in 2006. We're the fastest-growing car insurance company in America and our research shows that our brand recognition number is in the high 90-percent range. We believe a big part of our success is our great employees, our breakthrough, call-to-action advertising and our strong brand personality that is built and evolves every day and night on TV.

So clearly the concept of multiple campaigns does work. It is difficult to instantly recall any other insurance company television ad campaign, isn't it?
Perhaps that's the genius behind Geico's strategy: to simply dominate the television airwaves with so many varied car insurance messages that any competitors' TV ads are simply lost in the clutter.

Could this television planning strategy make sense for you?

We'd suggest that you consider the breadth of your targeted demographic, the scale of your ad budget and your commitment to a long-term television campaign. Geico is definitely "bought in," and they use television advertising at the scale at which it was meant to be used.

Are you changing your message too often and cheating yourself of growth from a long-term, high-frequency campaign? Should you maintain your current television message longer than you are?

Archeologists have found hundreds of cave wall drawings, all of the same image. And today in advertising, "frequency of message" is the secret to a successful long-term campaign.

So maybe, just maybe, the cavemen weren't so dumb after all.

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By Adam Armbruster

ESURANCE STAKES CLAIM IN AUTO-INSURANCE BIZ

Premiums pile up amid national TV campaign with animated ad icon.

Online insurer Esurance is the new kid on the block in the competitive auto-insurance space, where ad spending tops $1 billion a year. Could this tiny upstart, a survivor of the dot-com bust, be the next Geico?

With ads featuring Erin Esurance, an animated character with distinct pink hair and green eyes, the San Francisco company is taking a similar path with its marketing strategy, standing out in a sea of creative sameness by creating an appealing persona capable of making the jump to pop-culture relevance.

And it's making stellar gains à la Geico in its heady earlier days. It's growing premiums written-the industry's measure of growth-an average of nearly 70% year over year and has racked up 350,000 customers since writing its first policy in December 1999, primarily targeting savvy online consumers with an average age of 35.

Like its competitors, Esurance has upped ad spending, launching its first national TV campaign in 2006, produced in-house. (Media planning and buying have been handled by Havas' MPG since mid-2005). It's more than tripled measured media spending from $27.5 million in 2005 to $86.4 million in the first nine months of 2006, according to TNS Media Intelligence.

As Esurance has grown, so has its marketing division, which numbers 40 at the 1,500-employee company.

Founded in 1998 at the height of the dot-com craze, the company spent its entire budget on paid-search and portal advertising until 2004. "We saw we [were] going to need to expand into off-line channels to keep growing as rapidly," said John Swigart, chief marketing officer.

Erin Esurance was created by Kristin Brewe, the company's director-brand and public relations, along with San Francisco's Wild Brain animation. The character emerged from creative first used in online ads. "We were running tests of different creative online, and … the cartoons were the most effective," Ms. Brewe said. Also, animation could be far cheaper than a live-action commercials.

"She's an iconic figure now," Mr. Swigart said. "We don't even need to have our logo and name for outdoor campaigns; we just use her green eyes and pink hair, and that's enough to mean Esurance."

Esurance tracked brand awareness closely when the campaign launched, and claims it is the most-recognized brand after the big four-State Farm, Allstate, Progressive and Geico.

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By Mya Frazier

ESURANCE STAKES CLAIM IN AUTO-INSURANCE BIZ

Premiums pile up amid national TV campaign with animated ad icon

Online insurer Esurance is the new kid on the block in the competitive auto-insurance space, where ad spending tops $1 billion a year. Could this tiny upstart, a survivor of the dot-com bust, be the next Geico?

With ads featuring Erin Esurance, an animated character with distinct pink hair and green eyes, the San Francisco company is taking a similar path with its marketing strategy, standing out in a sea of creative sameness by creating an appealing persona capable of making the jump to pop-culture relevance.

And it's making stellar gains à la Geico in its heady earlier days. It's growing premiums written-the industry's measure of growth-an average of nearly 70% year over year and has racked up 350,000 customers since writing its first policy in December 1999, primarily targeting savvy online consumers with an average age of 35.

Like its competitors, Esurance has upped ad spending, launching its first national TV campaign in 2006, produced in-house. (Media planning and buying have been handled by Havas' MPG since mid-2005). It's more than tripled measured media spending from $27.5 million in 2005 to $86.4 million in the first nine months of 2006, according to TNS Media Intelligence.

As Esurance has grown, so has its marketing division, which numbers 40 at the 1,500-employee company.

Founded in 1998 at the height of the dot-com craze, the company spent its entire budget on paid-search and portal advertising until 2004. "We saw we [were] going to need to expand into off-line channels to keep growing as rapidly," said John Swigart, chief marketing officer.

Erin Esurance was created by Kristin Brewe, the company's director-brand and public relations, along with San Francisco's Wild Brain animation. The character emerged from creative first used in online ads. "We were running tests of different creative online, and … the cartoons were the most effective," Ms. Brewe said. Also, animation could be far cheaper than a live-action commercials.

"She's an iconic figure now," Mr. Swigart said. "We don't even need to have our logo and name for outdoor campaigns; we just use her green eyes and pink hair, and that's enough to mean Esurance."

Esurance tracked brand awareness closely when the campaign launched, and claims it is the most-recognized brand after the big four-State Farm, Allstate, Progressive and Geico.

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By Mya Frazier

MORTGAGE PINCH CAUSES DOMINO EFFECT OF PAIN

Many home sellers stuck as credit crunch shuts out many buyers

Matt and Kimberly Brown's contract to buy a new home in Yelm, Wash., will expire at the end of the week. They've lined up a no-money-down loan through the Department of Veterans Affairs, but the Browns haven't been able to sell the town house they live in, so they will have to back out and lose their $1,000 deposit.

"A lot of people looked at (the town house) and love it," says Matt, 26, who works in auto insurance claims. "But they either can't get the interest rate they want for a home loan, they can't get accepted for a home loan, or they can't afford it."

The problems in the mortgage industry, which began late last year and have rapidly deteriorated since June, are having a domino effect in the real estate market.

Increasingly, first-time home buyers are getting shut out of the market, and that hurts move-up buyers like the Browns, who are asking $182,000 for their town house.

Homeowners are also having more trouble refinancing their escalating adjustable-rate loans, and that is increasing the number of foreclosures and the supply of homes on the market. As a result, sellers are having to wait longer and cut their prices more deeply.

"If conditions in the mortgage market don't get much better in the next 30 to 60 days, we could be in for a major national correction, instead of a soft landing," says Hessam Nadji, managing director of research for Marcus & Millichap Real Estate Investment Services in Encino, Calif.

The turmoil in the credit market is leading forecasters like Nadji to push back their expectations for the recovery of the real estate market. Home sales have fallen dramatically since their peak two years ago and aren't expected to bottom out until the end of the year at the earliest.

"The credit crunch is exacerbating the drop in buyer demand and potentially compressing the natural downturn we expected to be spread over six months into a few weeks," he said.

Just two months ago, Barbara and Jeff Barker were happy they had finally rented Barbara's former home in Sparks, Nev., which they had been trying to sell since November 2005. The new tenant has an option to buy the home in June for $375,000. That's $100,000 less than the Barkers' original asking price, but they agreed to take it.

Now, the tenant, a single parent, is "telling us she is not sure she can qualify for financing and wants to extend the lease another year," says Barbara, 44, a middle-school teacher.

"We might be in the predicament again" of trying to sell their house, she says.
Nationwide, more sellers and agents are complaining that homes will take even longer to sell now than last year because more contracts are falling apart over the financing.

Larry Underhill, an agent in Stockton, Calif., says he's seeing homes go under contract two or three times. Each time, he says, the deal craters, because "Buyers can't qualify, or buyers are understandably cautious. They see property values sliding and are saying, 'Why am I doing this?'"

Lenders are now demanding that customers have larger down payments, more cash reserves in the bank, more proof of income, higher credit scores and less debt. They are cutting out 100% financing loans and eliminating short-term, adjustable-rate loans.

Jumbo-loan rates jump

It's not just cash-strapped and newbie buyers who are getting rejected. The credit-tightening is also cutting off prime buyers in high-cost cities who often need to borrow more than $417,000. Interest rates for these so-called jumbo loans have risen dramatically in recent weeks to entice skittish investors to buy them. The mortgage industry depends on Wall Street to raise money for mortgages and also to buy pools of mortgages as investments.

"We had a buyer, a doctor with an 800 (point) credit score, a down payment of more than 20%, and the (lender) backed out at the last minute," says Lisa Gregory, an agent at Prudential California Realty in San Diego, who represents the seller. "We were stunned."

Since the end of June, the average interest rate for these jumbo loans has jumped to 7.43% from 6.96%, while the interest rate for conventional loans has declined slightly to 6.68%.

That gap in interest rates means a borrower with a $417,000 loan will have a payment that is $217 a month more than a borrower with a $416,000 loan. In areas where homes are already unaffordable for many working families, that can be a budget breaker.

Greg McBride, a senior financial analyst at Bankrate.com, thinks what's happening in the mortgage market is a sign of over-reacting investors. Still, he says, "If this situation persists for months on end, it will have an effect on higher-end home prices. Many buyers will effectively go on strike, and those that remain won't have the same buying power."

The qualification hurdles are so bad in California, where the median single-family home costs about $595,000, that a record number of sellers are offering to lend money to their buyers in the form of second mortgages. From April to June, almost 5% of home sales in the state had seller mortgages on them. Three years ago, less than 1% of sales had seller "carry back" financing, according to DataQuick Information Systems.

While the easy-money bank loans have dried up, there are a couple of programs backed by Fannie Mae and Freddie Mac that let lenders make mortgages for 100% of the home's value. Both programs, however, have income limits for borrowers and a maximum loan ceiling of $417,000.

More home sellers and buyers are also turning to the Federal Housing Administration, which caters to low-income and first-time buyers and offers a 3% down-payment loan.

Rebecca King, a 15-year renter, got an FHA loan last month. As a single parent, she couldn't afford to buy a home in Seattle but found a home 25 miles north in Everett for $275,000.

"I didn't ever think I'd be able to do that in the Seattle area, especially after everything I had read about foreclosure and interest rates," said King, 47, a nurse. "But I didn't want to be on the rental treadmill, and so in June I went ahead."

But while FHA applications are up more than 75% since December, the portion of loans approved was up only about 20% in the second quarter, the agency said, largely because many borrowers still can't qualify.

Both the House and Senate have passed bills to modernize the FHA program, which has changed little since it was created in 1934. But these measures still face opposition in Congress, as do any plans to involve the FHA in a bailout of homeowners who are facing foreclosure. The Bush administration last week rejected calls to raise the maximum loan limit for FHA, Fannie and Freddie above $417,000.

And it's doubtful that any proposed changes could come fast enough to help the roughly 2 million American homeowners who were behind on their mortgages at the beginning of the year, according to the Mortgage Bankers Association, or the 560,000 of those who were already in foreclosure proceedings.

But this problem isn't going away. Loan delinquencies and foreclosures are expected to rise steadily for at least the next six months as people with adjustable-rate mortgages (ARMs), which were fixed for the first two or three years, continue to reset to higher rates.

The foreclosures have been concentrated in areas that have suffered extreme job losses, such as Michigan, Ohio and Indiana. In the past year, they have also increased sharply in California, Arizona, Nevada and Florida, where prices and sales are falling, making it harder for homeowners to refinance.

When Christine and Michael Canavan moved from Fort Lauderdale to Melbourne, Fla., two years ago, they bought a $250,000 home with a subprime-borrowers ARM that allowed them to pay only the interest on the loan each month, which meant they wouldn't build up any equity unless their home appreciated in value.

After two years of making their payments on time, their credit score had improved to prime level, but the value of their home sank suddenly this summer.

"I had to go to (the mortgage broker) three times because our appraisal kept depreciating," said Christine, 38, an elder-placement counselor.

"At first he said, 'Great news, your home appraisal would be $275,000.' Within a week, the home had gone down to $240,000. When I went in to do the paperwork, I was in tears. It had dropped to $230,000 in two weeks."

Unsure of the future

To refinance with a 30-year, fixed-rate mortgage, the Canavans had to scrape together $19,000 to pay off their old loan.

"I feel so sad for families that don't have money to bring to the table to refinance these loans," she said.

Those families include Loretta and Jimmy Mendez. They bought a $219,000 home in nearby Palm Bay with an interest-only three-year ARM that resets next year.

"We invested $20,000 in this home," says Loretta, 31, a dance teacher. "Not only did we lose that money, we owe more than what the house is worth. We're supposed to refinance soon, and I don't know what we're going to do."

There are a lot of homeowners and home buyers who, like the Mendezes and the Browns in Yelm, Wash., are unsure of the future, hoping the mortgage market calms down soon.

For now, Matt Brown says, he and his family will start over, looking for another new house and hoping someone will qualify for a loan and buy their town house.

(c) USA TODAY, 2007

NEW POLICY TO GRANT DRIVER'S LICENSES TO THE UNDOCUMENTED

Undocumented Caribbeans and other migrants in New York State will soon be able to apply legally for a driver's license.

New York Governor Eliot Spitzer and Department of Motor Vehicles Commissioner David Swarts announced the administrative policy change on Friday, much to the glee of advocates and. the angst of immigration critics.

But the governor insisted that the plan has been developed "after a comprehensive review" and the DMV has decided that the changes will increase the security of the state's license system by obtaining better and more verifiable information from applicants.

This, he said, will decrease the number of uninsured drivers on the roads, lower auto insurance rates for all drivers and, when necessary, help law enforcement agencies in their investigations.

The DMV estimates that tens of thousands of undocumented, unlicensed and uninsured drivers are currently on New York's roads, contributing to increased accidents and hit-and-runs as well as higher auto insurance rates.

Informational letters from DMV will be part of Phase 1 and be sent to the approximately 152,000 New Yorkers who at one point had (or currently have) a New York State license, but are unable to renew it because of the previous administrative policy.

The re-licensing process begins at the end of 2007 and those reapplying will need to prove their identity, date of birth and fitness to drive before being issued a new license.

Phase 2 will begin six to eight months after Phase 1 and will open the application process to all New Yorkers. The DMVs secure six-point ID requirement will be based on an expanded list of valid and verifiable documents that will exclude a Social Security number or permanent residency proof. Along with the other identity documents currently on the list, individuals' identities will be verified using this new document verification technology to reduce the potential for fraud.

The new policy will apply to all state-issued licenses that are not governed by certain federal laws that require a social security number, like commercial driver licenses and hazardous materials endorsements.

Currently, eight other states' — Hawaii, Maine, Maryland, Michigan, New Mexico, Oregon, Utah and Washington — do not require drivers to prove legal status in order to obtain a license.

Amy Sugimori, co-chair of the New York Coalition for Immigrants' Rights to Driver's Licenses, called the announcement "a huge victory for the immigrant, civil rights and labor movements."

"For four years, diverse groups from across the state have been working to ensure that all New Yorkers are treated equally by the government. Today, our voices are being heard. We applaud Governor Spitzer for his leadership as he sends a strong message to the country that second-class treatment of immigrants is bad public policy," added Sugimori.

If you or someone you know has an immigration question, log on to http://www.immigrationkorner.com/ and submit your queries. Personal answers will not be provided. Please note that the answers provided here are for information purposes only, and do not create an attorneyclient relationship; nor are they a substitute for "legal advice," which can only be given by a competent attorney after reviewing all the facts of the case.

Attorneys wishing to provide pro bono answers to questions are URGENTLY needed and are asked to contact the writer at Felicia@hardbeatnews.com.

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By Felicia Persaud