Marketing News

Jan. 15, 2007

13

Case study
Advertising

Verbatim:
‘(The ads) may startle (in some cases), but that pulls them in and shows how this is relevant to them.’

State Farm ad campaign targets youth, reinvigorates brand image

COVERAGE
By DEBORAH L. VENCE

BETTER
strong image and clear message, but as being unattainable. We needed to become relevant (among this age group),” Kerrick says. “They are trying to build assets or just get out of debt depending on their situation. They want to be respected. They want to be taken seriously and know that their money is valued just as (much as) an older customer’s money.” Meanwhile, Kerrick says that the research proved that young adults want insurance, and that they view auto insurance as a requirement to driving. What’s more, State Farm was feeling the competition from rival insurance firms Geico and Progressive, which already had been marketing to 18- to 25-year-olds. State Farm spent 2005 planning a strategy for best marketing to the segment. The company invited feedback from company employees and agents who work closely with customers. The insurance company finally came up with a multipronged marketing campaign—dubbed Now What?—to target this age group. The campaign comprises TV and print ads, and direct mail, and officially launched last August at the Lollapalooza music festival in Chicago’s Grant Park. Young adults were most of Lollapalooza’s 166,000 attendees. Among the campaign’s eight TV spots is one that

tate Farm didn’t want to be your father’s insurance company anymore. Bloomington, Ill.-based State Farm, the nation’s largest insurer of homes and automobiles, began a mission in 2004: to create a marketing campaign that would attract the attention of 18- to 25year-olds. In State Farm’s 80-plus years of business, older customers had long comprised a significant portion of its client base. “Our research revealed that we were considered a brand for an older customer. So, we had to make our brand relevant to a (younger) age segment,” says DeAnna Kerrick, a customer segment marketing manager for State Farm. “We did a lot of quantitative and qualitative research with (younger adults). We also did research with our internal agents who (deal with) customers. We wanted to address issues not only with the customer, but also with the sales force.” The research, which queried thousands of 18- to 25year-olds across the United States in 2004, proved that the State Farm brand was well respected among this age group, but it wasn’t considered a relevant brand to them, or one that represented products that addressed their financial needs. The brand was seen as having a

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depicts an African-American man in his early 20s, who is shown putting a new airconditioning unit in his apartment window on a hot summer day. “We see him put the a/c in the window. Then in that moment of bliss, he turns on the a/c and starts to feel the cool air,” explains Dave Kissel, senior vice president and group business director at DDB Chicago, the ad agency that helped create the campaign. “As he is enjoying the reverie, you hear a creaking sound, and the air-conditioner falls out the window,” and a car alarm starts to blare. “What we see the man do is pull out a key fob and make the alarm sound go away on the car. It was his car that he damaged,” Kissel explains. “Then the screen morphs into the words, ‘nowwhat.com.’ ” Print ads for the Now What? campaign are running in such magazines as Blackbook, Surf, Rolling Stone, US, Modern Bride and Time Out Chicago. Copies of Time Out Chicago were handed out at Lollapalooza. In one print ad, the rear of a car is shown sticking out of the side of a building. Next to it is the phrase, “nowwhat.com.” Meanwhile, direct mailers have been sent to existing customers and prospects in the 18- to 25-age segment, Kerrick says. For example, in a self-mailer titled “Crushed,” the back end of a red car is crushed by another vehicle. On the mailer, it states: “Find out how to straighten out a mess like this before it puts a dent in your wallet at nowwhat.com/crushed.” “We felt an integrated campaign was the only way to go because of who we were attempting to reach. (Y)oung adults are elusive and (their) media habits (consist of) literally using anything they can get content from these days,” Kissel says. “We’ve seen that they use media simultaneously. They are text messaging while they’re watching TV. The option of choosing only one or
See STATE FARM / Page 14

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Jan. 15, 2007

Marketing News

STATE FARM / From page 13

Spots show pivotal situations where State Farm can help
two media channels was going to be ignoring the reality of how this audience gets media today.” Kissel also points out that the ads in the campaign don’t reveal the State Farm brand name. Viewers have to go to the nowwhat.com Web site to find that out. “It lets the viewer ask the question: ‘If that happened to me, where would I go?” he says. The idea of the campaign was to put situations in front of young adults about insurance and protection. “(The ads) talk about (needing) insurance in a humorous way. We knew from our research that humor and intrigue were appealing. (The ads) may startle (in some cases), but that pulls them in and shows how this is relevant to them,” Kerrick says. Kissel adds: “What we’re doing in creating these moments is ask the question, ‘What do you do, and where do you go? Who can help you?’ They are targeted to situations that young adults might find themselves in. (After going to nowwhat.com), you see State Farm is the answer and that they can help you and answer your questions. We’re trying to create interest and intrigue around these pivotal situations, and get them into it in a way that will engage and entertain them.” While the campaign only has been running for a few months, Kerrick says there have been plenty of hits to the State Farm opted for an integrated approach to its campaign combining television spots with direct mailers like the one shown above. nowwhat.com Web site already. (Kerrick, however, did not yet have inforsome days are even higher than that.” And as far as the future of the campaign mation available on new clients or Moreover, Kerrick says State Farm has goes, Kerrick says, “We can’t say what the increase in revenue as a result of the camreceived positive feedback about the camshelf life will be. But for right now it is paign.) paign through blogs. doing what we want it to do in terms of “We have seen over a million and a half “Young adults have been blogging about interest and relevancy.” hits to the site since mid-August,” she says. the campaign and have commented on how —Deborah L. Vence is a contributing “On average, we’re seeing 10,000 to 20,000 ‘cool’ ‘Now What?’ is. That’s good news,” editor based outside of Chicago. hits per day on the nowwhat.com site, and she adds.

NATION ● Snow patrol

Colorado slopes raise lift ticket rates to set prestigious image

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he contest between Vail and Aspen ski areas over which is the highest has nothing to do with mountain elevation. It’s all about the price of a lift ticket. The Colorado-based Aspen Skiing Co. hiked its single-day lift ticket price to $82 in late December, making it—for a while—the highest priced ticket among U.S. ski resorts. Vail countered, jumping its price from $77 a day to $85. Until recently, it’s been the other way around. Aspen was tops in ticket prices. But this year, Aspen officials said they’re done, they have no more price increases planned. And Vail’s reservation center says the top-tier holiday ticket price won’t go above the $85 dollar mark.

But there’s more at work than just profit and loss built into the price of a ticket, analysts say. There’s also prestige and marketing. Marketing professor Meg Campbell at the University of Colorado’s Leeds School of Business says many times consumers assume price equates to quality. Campbell says by labeling themselves the highest priced ski resorts, Aspen and Vail also imply they are the best ski areas. For their part, ski resorts for years have said the media pays too much attention to the price of a single-day lift ticket purchased at the ticket window. According to industry officials, most resort guests either take advantage of multiday tickets or use available discounts.
—The Associated Press