The mighty duck: Aflac is boosting sales and name recognition with its ubiquitous duck, and now the marketing icon is also reaching audiences in Japan. (Life/Health: Marketing).
Aflac's pop icon is also now beginning to waddle its way across global borders, particularly in the populous Japanese market. Thanks to an already high brand recognition among Japanese consumers and the growing popularity of its duck campaign, Aflac insures one in four Japanese households, making it the third most profitable foreign company operating in any industry in Japan, the company said.
Creating an Icon
Aflac's duck has done more than generate impressive sales numbers. The mascot has been a feather in the company's cap in terms of making it one of the most recognizable names in insurance.
After its first duck commercial aired in January 2000, Aflac rose virtually overnight from an unknown company to become one of the most recognized brands of insurance today. In fact, after only six days of advertising, Aflac received more hits on its Web site than it did for the prior year.
Nearly 90% of Americans now recognize Aflac's name, the company said, largely because of the duck campaign, which takes a humorous approach to insurance while sending the serious message for its need. Testing by IPSOS-ASI, an advertising research company, shows that Aflac's commercials scored three times the insurance norm in terms of brand-related recall.
The duck was born after Aflac Chairman and Chief Executive Officer Daniel Amos and his advertising steering committee decided it was time to create a campaign that differentiated the company's ads from other insurers, while increasing the company's name recognition. In addition, because the company name was often mispronounced, Aflac wanted to create a mnemonic device that would reinforce name awareness and recall.
Two members of New York City-based Kaplan Thaler Group, the advertising agency responsible for creating the duck ads, also found themselves having trouble remembering the company name. After repeatedly saying the name, they realized Aflac sounded similar to a duck quacking, said Linda Kaplan Thaler, president of the agency, whose parent company is Paris-based Publicis Groupe. "And, we thought the duck would be a wonderful way to get people to remember the Aflac name," she said.
Stan Winston Studio, California-based creators of special effects for such movies as "Jurassic Park," "Predator" and "Pearl Harbor," designed the animatronic duck, and actor/comedian Gilbert Gottfried provided the duck's voice-over.
What's the appeal? "He's a duck with an attitude," said Thaler.
Nearly everyone has seen the white, sassy Pekin duck with a bright-yellow beak waddle into a variety of situations--ranging from an ice arena to the Grand Canyon--to tout Aflac insurance. In most scenarios, the feathered icon belts out its signature quack to unsuspecting passersby as individuals converse about insurance. The taglines--"Without it, no insurance is complete" and "Ask about it at work" --have added to the ads' fame.
Aflac's advertising campaign is funded with savings recovered from improvements in technology and other efficiencies. While its annual media budget is in excess of $40 million, the company declined to comment on its yearly spending for the duck campaign.
Branding Its Name
Advertising expert John Malmo, president of Koening Inc., said in an article that Aflac has "great advertising because its concept emanates from the brand name." In fact, the Aflac duck is so memorable that it's created free publicity over the years, including punch lines on "The Tonight Show" and syndicated comic strips. It even showed up in the sports arena when former sportscaster Dennis Miller referred to a wobbly pass during a "Monday Night Football" game as "a duck in flight that oughta be yelling AFLAC."
The company's message is far reaching. Aflac's commercials, which some experts say rival the Eveready Energizer bunny in terms of brand value, have run on all major television networks during a host of prime-time shows and events, including Major League Baseball games and National Collegiate Athletic Association football games, the French Open and Wimbledon, the Emmy Awards and the 2002 Olympic Winter Games. For example, Aflac advertised in 12 30-second spots during the Olympics, which it calls a good marketing strategy to reach both male and female audiences during prime-time viewing. Its latest commercial, in which the web-tapping duck enjoys a show tune by Las Vegas legend Wayne Newton, premiered during this year's Grammy Awards.
The duck is reaching even the youngest audience members. During a recent CEO conference, Amos told the story of a toddler who when asked what sound a pig makes, said "oink," but when asked to mimic a duck, said "Aflac."
Various marketing and branding groups have studied the duck's popularity. An online survey by pollit.com found that Aflac's duck, with 30% of the votes, was the most popular animal spokesperson, followed by the Chickfil-A cows, the Budweiser frogs and the Taco Bell chihuahua. In addition, a poll by USA Today indicated that men in particular were attracted to Aflac's ad, naming it their third-most favorite campaign.
In one of Aflac's latest commercials, world-renowned mentalist The Amazing Kreskin takes center stage with the duck to drive home the company's name. During the first three weeks of January, the spot had the highest brand recall score of any commercial on TV, according to the Intermedia Advertising Group, which measures advertising effectiveness by monitoring the TV-viewing population's ability to recall an ad and its brand within 24 hours after the ad has aired.
The duck ads have also received kudos over the past three years, including The Wall Street Journal's recognition of the campaign as one of the "10 most effective campaigns of 2002," and a USA Today/Harris poll naming Aflac's ads as one of the best-liked campaigns of 2002. Aflac's duck commercials have also received a gold Effie Award for the campaign's creation of a strong base of consumer awareness. The Effie Awards are presented annually by the New York American Marketing Association in recognition of the year's most effective advertising campaigns. In 2000, the ABC television network featured one of Aflac's ads in its prime-time special, "The World's Best Commercials."
The ads have generated some controversy, however, last year, the United Poultry Concerns, an animal rights group, railed against the company about its "Grand Canyon" ad, in which the duck falls from the canyon, and a commercial in which the duck hangs upside down in a bat cave. The group said the ads were degrading to ducks and constituted animal abuse. Aflac responded to the allegations, however, saying that it follows the Humane Society guidelines for live animals used in movies and commercials, including having a representative from the society present on set during each commercial taping. While much of Aflac's commercials features its animatronic duck, a live duck is also used during the tapings.
Breaking away from an advertising norm can be a risk-taking venture, but Aflac has proven that taking a chance can have a big payoff.
"I champion the advertising agency and Aflac's senior management for taking a risk with the campaign," said Jack Sims, a marketing and branding consultant and public speaker. One of the biggest things in creating an effective branding message is consistency of measure and sticking with an idea, he added. "If companies can do this and take a chance, such as Aflac did with its breakthrough campaign, the result is often very positive."
Aflac recognizes the risk it took when implementing its campaign three years ago. "This was probably our biggest challenge in making the decision to do something that is such a departure from the norm," said Kathelen Spencer, executive vice president, director of corporate communications and deputy legal counsel. When Aflac appeared on the marketing circuit during the late 1990s, there were already a large number of insurance and financial service ads, and the company found itself competing for viewers' attention with not only other companies but also ads that inherently were more entertaining, she added.
"On one hand, we felt we had to do something to break away from the group, while, on the other hand, take a risk with a campaign that makes fun of our name and uses a talking duck," said Spencer. The company determined the risk was one worth taking, however, because if it worked, it had the potential of working in a very big way, she said.
Aflac's duck is not only quacking its way into advertising history, it's catapulting the company's insurance sales to record numbers.
"Aflac duck commercials started just over three years ago and have contributed enormously to the growth for our sales and in our sales force recruitment every year since they began," said Amos.
In 2001, Aflac increased its sales by more than 29%, and sales increased 17% in 2002. Aflac credits its marketing icon, which Amos calls "a gift from heaven," with helping to generate more than $1 billion of new U.S. insurance policy sales, a 16.4% increase over sales in 2001. After the advertising campaign premiered during the first quarter of 2000, Aflac generated more sales leads during the first two weeks of the year than in the two previous years combined. In addition, the company's recruitment climbed 30% last year on the wings of the duck.
"Sales increases are the real measure of the ad's strength," said Leonard Lodish, professor of marketing for The Wharton School of the University of Pennsylvania in Philadelphia. "And there aren't a lot of ad campaigns that can do that." In fact, he said according to split-cable advertising experiments, a test of advertising effectiveness, more than one-half of established brand ads for established packaged goods don't generate increased sales.
Ducks for Sale
The popularity of Aflac's advertising campaign is doing more than boosting sales and recruitment numbers. After receiving numerous e-mails and calls about its duck, Aflac began selling a variety of duck items, including a stuffed version of the duck that quacks "Aflac" when squeezed, on its Web site. About 56,000 ducks have been sold, generating more than $500,000 in sales. Proceeds from the online sales benefit the Aflac Cancer Center and Blood Disorders Service at Children's Healthcare of Atlanta. In 1998, Aflac financed the multimillion dollar renovation and expansion of the center, which is the largest children's cancer center in the southeast region and one of the largest pediatric cancer centers in the United States.
Online sales in Japan are also skyrocketing. Duck items sold in the country will benefit the Aflac Parents House, a residential facility for families of critically ill children in Tokyo.
Eyes to Japan
Aflac Japan is now taking a closer look at the duck and ways it can help captivate Japanese audiences and increase sales.
"We are currently integrating the duck into our Japanese advertising and will be interested to see what the duck can do for us there," said Amos.
Aflac entered the Japanese market nearly 30 years ago and now writes two-thirds of its business in the country and insures one in four Japanese households. Although the marketing strategy in Japan has differed from the U.S. strategy, the approaches in the two markets are becoming more parallel.
"In the United States, our strength lies in small to midsize businesses and towns, so our big area to gain more presence is the urban, highly populated areas and with large employers," said Spencer. In Japan, Aflac was able to establish a foothold in major corporations and municipal governments, she said. The growing collaboration between the Japanese and U.S. companies, however, is helping to develop strong marketing strategies in both markets.
Aflac Japan, which has roughly the same advertising budget as Aflac's U.S. budget, until recently has done only product-specific ads, said Spencer. "They used celebrities associated with each different product." However, Aflac Japan adopted a different approach a little less than two years ago after testing a dubbed version of the U.S. duck campaign. "They had different advertising goals since the corporate name has high brand recognition in Japan," she added.
In July 2001, the agency group Dentsu consulted with the Kaplan Thaler Group, and Aflac exported its first duck campaign to Japan to promote its Rider MAX product, which includes surgical benefits, accident coverage and medical/sickness benefits with its cancer life policy, and "Ever" medical product policies in the country. During the commercial, viewers saw a dubbed version of the original Aflac "park bench" commercial. Even though the Japanese translation of "quack, quack" is "ga, ga," Aflac said initial tests proved the humor still works.
While Aflac hopes the duck will strengthen brand recall as it has in the United States, the company has been one of the most highly recognized in Japan for years. A survey by the Japanese Nihon Keizai Shimbum newspaper found that Aflac had the highest name recognition of any foreign financial services company operating in the country, while Nikkei Business magazine named it the safest insurer among the 19th largest insurers in Japan.
Aflac is excited about the duck's presence in the Japanese market and believes it will not only help increase sales but will become an icon both domestically and internationally. "We are hopeful that the duck will become a corporate symbol in Japan as it has become in the United States," Spencer said.
Aflac is confident its duck will continue waddling its way across television screens for quite a while.
Consumer response indicates that the popularity of Aflac's duck has not yet run its course. In fact, consumers want more. Aflac, which monitors advertising awareness and consumers views on a monthly basis, found that consumers aren't tired of the duck as long as it continues to go new places.
And go new places it will. Aflac plans to air about 20 upcoming commercials over the next several years, taking the duck into a variety of new scenarios.
"One of the things to increase its longevity is to preserve the integrity of the character of the duck," said Spencer. "We've spent more time saying 'No, you cant use the duck on this or that; than giving permission to do so, which keeps the duck from becoming ambiguous." She also believes the duck's role as a corporate philanthropic symbol will continue to grow.
In addition, as the duck continues to makes its way into the Japanese market, Aflac believes it will continue to grow sales and boost name recognition throughout the country.
RELATED ARTICLE: Aflac Fact Box
American Family Life Assurance Co.
* Headquarters: Columbus, Ga.
* Chairman and Chief Executive Officer: Daniel Amos
* History: Founded in 1955 by brothers John, Paul and Bill Amos
* Major Products: Accident/disability, cancer, short-term disability, hospital intensive care, hospital confinement indemnity, long-term care, specified health event, life and dental.
* Policyholders: Insures more than 40 million individuals worldwide.
* Assets: Totaled more than $37 billion with annual revenues of more than $9.6 billion at year-end 2001, according to the company.
Ducks in a Row
Many experts agree that American Family Life Assurance Co. has its "ducks in a row" when it comes to creating a highly effective, popular advertising campaign that has placed its name on the advertising map.
"Aflac's duck campaign is truly one of the great home runs of Corporate imaging," said Richard Major, an analyst with A.M. Best Co. "However, it would never work as well as it does without having a good company behind it."
Aflac created its insurance-touting duck three years ago after the company's Chairman and Chief Executive Officer Daniel Amos wanted to design a campaign that was unique to the industry and would establish a brand presence for the Georgia-based insurer.
"I think the campaign is terrific because it's highly intrusive, easy to remember and humorous," said Elliot Savitzky, director of the financial services practice for Princeton, N.J.-based Opinion Research Corp., a global research, consulting and information services firm. "It's important for companies to find a way to break out of the clutter in the insurance and financial services industries, and I think Aflac has done that very well with its campaign."
Since the first duck commercial aired three years ago, Aflac's brand recall has grown to nearly 90%. In addition, sales and recruiting numbers climbed significantly on the wings of the duck.
Linda Kaplan Thaler, president of the Kaplan Thaler Group that was responsible for creating the advertising campaign, believes the Aflac commercials are unique to the insurance industry--an industry she says usually uses rather somber messages devoid of humor. "The duck tells people on an unconscious level that Aflac's insurance is going to take care of them and they don't have to worry." She also believes audiences identify with the duck. "I call him the underduck because he's a microcosm of us. He's never heard and gets his feathers ruffled in the process, so I think we all identify with our little waddling mascot."
Jack Sims, a marketing and branding consultant and speaker, refers to the insurance industry as a "me too" category in which every company in the market offers essentially the same type of products and services. "There's little to no variance because of the way things are created by law or structure within the industry, which results in a level playing field of products where price becomes the only differentiating factor."
He believes, however, that Aflac's advertising campaign has broken it away from the "me too" playing field by creating a unique image within the insurance market. "They've accomplished this by creating a character that is fun and entertaining, while at the same time gets; across the message and the benefits the company offers," said Sims.
Bob Garfield, well-known advertising critic for Advertising Age magazine and author of "And Now a Few Words From Me:Advertising's Leading Critic Lays Down the Law, Once and For All," believes the ads need to include even more benefits information in their message. "Aflac has created a good campaign that is establishing a high degree of name recognition for the company. However, the campaign doesn't explain the advantages of supplemental insurance as well as the duck's predecessor ads did," Garfield said. It's soon time--if not now--to once again begin telling the story in some detail, using the duck in some element but not as a central element, he said.
Longevity and consistency are also key components of a highly effective marketing campaign--two features most experts agree have contributed to Aflac's success. "Consistency of a message and longevity of ads are extremely important, and that has to translate into something meaningful for people by generating an image consistent with what they want to stand for and sell, which is what we see with Aflac's duck," said Savitzky.
Growth of the Japanese Market
As the duck makes its way into Japan, Columbus, Ga.-based American Family Life Assurance Co. continues to strengthen its presence across the country.
In 2004, Aflac will mark its 30th anniversary in the Japanese market. The plan for Aflac Japan began in 1970 after John Amos, one of the company's founders, visited the Osaka World's Fair and noticed a large number of Japanese residents donning surgical-like masks to ward off colds and influenza. The result, he believed, was a strong need for insurance among Japanese consumers.
Amos invested $1.6 million to set up Aflac Japan, and in 1974, Aflac became the second foreign company licensed to sell insurance products to the Japanese market. The company achieved success in the market
by using two important strategies--working with agencies that large Japanese companies set up to handle employee benefits and paying commission to the agencies, and avoiding investing its yen-based premium income during the 1980s in real estate deals and investments that hurt many of today's largest Japanese life insurers, according to an article in Business Week.
Aflac is now the largest foreign insurer in Japan in terms of premium income, according to the company. In addition, it ranks second in the number of individual policies in force among all of Japan's life insurers and is the third most profitable foreign company in any industry in Japan.
According to "Global Investing: 2000 Edition" by Andrew Leckey, Japan is the largest worldwide life insurance market, accounting for more than $20 trillion of life insurance in force, with the United States trailing behind with nearly $12 trillion in force. Since 1992, Aflac has broadened its product line in Japan, and today new products in the country account for nearly one-third of new sales. Noncancer products, for example, account for 60% of these new sales.
Financial intermediary Credit Suisse First Boston said in a recent report that it believes Aflac is well positioned to capitalize on the strong demand for medical insurance, which, in Japan, is sold as an income protection product.
The majority of Aflac's cancer life products are sold through Dai-Ichi Life, Aflac's alliance partner. Because cancer is the leading cause of death in Japan, cancer products have become popular among its consumers. As a result, Aflac expanded its product line in 1991 by adding Rider MAX products that include surgical benefits, accident coverage and medical/sickness benefits with its cancer life policy Today, Aflac's Japanese policy renewal rate is 97%, and advertising concentration for these riders includes liberal ad spend for television and newspaper advertising and a Japanese-language Web site.
Low lapse rates are also helping to position the company as a proven leader in the Japanese marketplace. "Japanese consumers tend to hang onto policies more than Americans, so once the company gets a customer, they are extremely valuable because they tend to stay with the company," said Richard Major, an analyst with A.M. Best Co.
In addition, the company's use of U.S. techniques with Japanese managers contributes to its success. "The company implemented important management practices that have proven successful in the United States--merit pay and promoting based on merit rather than seniority--which are two practices unique to many Japanese companies," said Major.
Aflac also has extended a hand to Japanese residents during times of crisis. In 1995, the company committed $2 million to the American Red Cross to establish America's Helping Hands Fund for relief from the Kobe earthquake.
More than 97% of the companies listed on the Tokyo Stock Exchange now offer Aflac products to their employees or customers, the company said.
Aflac Duck Facts
* Type: Pekin
* Created: In 2000 by the Kaplan Thaler Group advertising agency
* Recognized by nearly 90% of Americans
* More than 56,000 toy versions sold to benefit children's charities
* Both real and animatronic ducks used in commercials
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||American Family Life Assurance Co.|
|Date:||May 1, 2003|
|Previous Article:||Under treatment: as oncologists struggle with the traditional process of charging patients for chemotherapy medication, insurers are offering their...|
|Next Article:||Left holding the bag. (Life/Health: Self-Insured Health Plans).|