Auto Insurers Introduce Fleet of Ad Campaigns.

Personal-lines auto insurers increased their advertising spending 41% from 1997 to 1998, according to a recent article in Auto Insurance Report. The biggest spenders were Allstate, which spent $175.6 million in 1998, followed by Geico's $139.2 million, according to information compiled by the Auto Insurance Report and Dowling & Partners Securities.

Auto insurers have increased ad spending substantially in the past five years. Between 1994 and 1998, State Farm increased its ad spending 39.5%; Allstate posted a 100.3% increase; Progressive, up 1,068.4%; and Geico, up 325.2%, according to the report.

Expressing the ad spending as a percentage of net premium tells another story. No. 1-ranked auto insurer State Farm Group spent $73.2 million on advertising in 1998, but that translates to only 0.2% of its $35 billion in 1998 direct premiums, according to Dowling & Partners. Fifth-ranked Progressive spent $70.2 million, or 1.3% of its $5.3 billion in direct premiums in 1998. The biggest spender relative to net premiums written was No. 6-ranked Geico, whose 1998 ad budget represented 3.2% of its net premium.

The ad-spending figures need to be put in context because insurers measure their advertising expenses in different ways, said Brian Sullivan, editor of the Auto Insurance Report. Advertising co-op money for agents may or may not be included, and the premium and advertising data apply to all lines of insurance.

Allstate, which introduced its new ad campaign during last summer's Major League Baseball All-Star Game, is spending $175.6 million on advertising as part of a brand strategy.

Progressive burst onto the advertising scene two years ago with a no-holds-barred Super Bowl debut featuring the alien character E.T. But that campaign was declared a dud by critics, and the Mayfield Village, Ohio-based insurer hired a new agency for its new $70 million campaign. "We're positioning ourselves as a big, but innovative, insurance company," said Dave Pratt, general manager for consumer marketing at Progressive.

The new campaign eventually will have six to eight different commercials. Themes include real Progressive customers sitting around a table in a restaurant discussing their experience with the company. Another ad will highlight Progressive's Web site, where customers can buy coverage online. Progressive expects to maintain the current level of advertising spending through this year.

No. 4 Nationwide began its first national television campaign in September. The Columbus, Ohio-based insurer views the financial-services industry as a more formidable competitor than property/casualty insurance companies.

"The banks and brokers are very well-financed and can afford to buy lots of advertising," said Steven Johnston, vice president of marketing for Nationwide.

Nationwide's $8 million-plus campaign replaced the company s logo of an eagle with a square frame to denote a "living logo." The frame is used as a two-way window in the ads, which show how Nationwide can serve clients at various stages in their lives.