The Future of Insurance Marketing - InsuranceRevenue.com

1 The Future of Insurance Marketing The Top 10 Trends That Will Reshape Insurance Marketing in the Next 5 Years1 The Future of Insurance MarketingThe Top 10 Trends That Will Reshape Insurance Marketing in the Next 5 YearsAs millennials come of age and a new wave of connected devices reshapes consumer behavior and purchase patterns, Insurance Marketing is poised for a fundamental shift. Below are 15 key trends that will Insurance marketers will need to embrace in 2016 and beyond. Consumer TV Watching Will Move from TV to Over-the-Top (OTT).A number of forces will converge to cause Insurance marketers to rethink big branding dollars on traditional TV. The explosion of online video watching, a plethora of connected devices, and declining traditional TV viewership among the valuable younger adults (pictured below) all will push Insurance marketers to begin shifting dollars to OTT platforms.

2 The proof: while upfront ad sales rebounded in 2016, previously upfront ad sales had declined 3 straight years for broadcast networks, and 2 straight years for cable networks. iKey Fact: Connected TV users in the US (those who use the Internet through a connected TV device once per month) will rise from 140 million in 2015 to 190 million in 2018. ii Time spent on watching traditional TV vs. watching video online by demographicsTraditional TVVideo OnlineK 2-11T 12-17A 18-24A 25-34A 35-49A 50-64A 65+6050403020100 Weekly Time Spent on TV (Hrs)Weekly Time Spent on Internet (Hrs)6543210 Source: Neilsen Total Audience Report 3Q15 Brand advertisers know that a large portion of TV brand advertising is wasted. Whether because consumers are skipping commercials with DVRs, not watching commercials, or simply unqualified to buy an Insurance product, TV brand advertising is a hope and prayer.

3 To help audiences achieve reach AND better targeting with video adverting, OTT video providers and online video ad services will drive digital video advertising to $17 billion by 2020 (see below). Key Fact: Although subscription-based online video services like Netflix and Amazon Prime garner the most viewers and revenue today, ad-supported online video (AVOD) will surpass subscription-based online video ( SVOD) by 2018 and reach $11 billion by 2021. iii US TV* vs. digital Ad Spending, by Device, 2014-2020billions20142015201620142018201 92020$ *$ $ $ $ $ $ $ *$ $ $ $ $ $ $ **$ $ $ $ $ $ $ **$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ : *incudes broadcastTV (network, syndication & spot) & cable TV;**includes advertising that apperars on desktop and laptop computers as well as mobile phones, tablets and other internet-connected devices, and includes all the various formats of advertising on those plat-forms;**includes advertising that appears on desktop and laptop computers as well as mobile phones, tablets and other internet-connected devices; includes advertising that apperars before, during or after digital video content in a video playerSource: eMarket, March 2016As online video ads grow in popularity and measurement matures, advertisers are realizing that online video ads are more effective for two key reasons.

4 First, because online video watchers are often tethered through a device-in-hand like a smartphone or tablet, viewers are less likely to stroll to the bathroom or kitchen during a commercial and are much more engaged. Second, online video watching affords better targeting of viewers. While traditional TV is trying to catch up to digital targeting via smart set-top boxes and addressable TV, Web tracking technology is far Fact: According to a 2015 survey, 72% of ad agencies say online video advertising is as effective, if not more effective, than television. iv10%31%41%18%In your experience, how effective is online video advertising when compared to the following alternatives?Online video is more effective than TVOnline video is about the same as TVOnline video is less effective than TVI don t knowSource: BrightRoll 2015 Agency Survey, Dec 2014 Millennials and GenXers account for 48% of consumer spending.

5 But these segments have media consumption profiles that are unlike previous generations. One example: 18-34 year olds watch 31+ hours per week on OTT -- more than TV or radio (see below). Millennials are also more style-conscious, impatient, less brand loyal, distrusting of authority, and humor-loving all elements to be taken into account when creating advertising Fact: 50% of Millennials describe themselves as politically independent of any major party, and 29% are not affiliated with any religion percentages significantly higher than other generations. vSource: NielsenAdults Spend The Most Time Watching TVWeekly hours: mins of usage (in population)AdultsP 18-34P 35-49P 50+35:2613:014:096:4311:363:423:4414:236 :287:0210:5420:2432:0713:404:188:2014:34 5:292:428:075:592:0714:0147:18 TVRadioTV - connected devicesPCSmartphoneTablet2 Qualified, Pay-Per-Lead Pricing Will Overtake by the overall trend toward pay-per-lead and away from CPMS that is taking place more generally in the world of digital advertising, successful Insurance marketers will make pay-per-lead services like an important part of the Marketing mix.

6 The most successful lead generation services will become content Marketing specialists to improve the yield of qualified leads and Fact: 90% of US brand marketers prefer to use at least some digital -specific metrics clicks, views, conversions or sales to measure the value of their digital advertising engagement. vi3 Advertisers Will Demand Transparency in digital big cloud over digital advertising especially in the last year is fraud. By some studies, 25% of video ads were the result of bot fraud, approximately double the rate of display ads. vii The result: advertisers and ad service providers will put in place fraud measurement, advanced targeting, and third party measurement and auditing capabilities to assure Fact: In 2016, an advertiser using Yahoo s programmatic video ad platform said that between 30%-70% of its ads were not running or not in line with the CPM paid in part because the video ads were embedded in banner ads.

7 Viii4 SEO and Search Marketing is Still Worth the Insurance search terms can be incredibly expensive. However, search is and will remain one of the most effective forms of Insurance Marketing . What s so special about search? Timing. When a user types in auto Insurance , the chance that the user is, at that moment, considering a purchase is much higher than other forms of advertising. The trick: Insurance marketers must optimize web pages and buy search terms that are tied to long tail search off-the-beaten-path terms which account for 80% of Internet search traffic . Tools like Hittail (which helps identify long-tail search terms to boost SEO organic traffic) and SEMRush (which does the same for SEM terms) acquire traffic at a much lower cost than over-bid keywords or traditional forms of offline or online Marketing . Key Fact: Despite growth in mobile and video advertising, US search advertising will still total $52 billion by 2020 43% of all US digital ad spending by far the largest category of digital Marketing .

8 IxSource: Experian. Keywords vs. Long Tail Search TrafficTop 100 KWs02030405060 Top 500 KWsTop KWsTop KWsThe Long Tail5 InsureTech Investments Will Disrupt along the path of the FinTech wave of the last 5 years, InsureTech investments from venture capital are ballooning to an all-time high (see below). While many of these investments will provide software and services for processes like real-time processing of claims, account management, mobile apps, and usage-based pricing, a large number of the new companies will disrupt the distribution marketplace. Insurance marketers are best served to know and experiment with new players like aggregators and lead generators like , price comparison sites many of which will displace traditional agents for Fact: VCs are not the only ones investing in InsureTech. In 2014, Walmart partnered with in 2014. In 2015, Google partnered with and CoverHound.

9 XTotal ($) Amount of Private Financing Transactions in the Insurance Tech SpaceTotal # of Deals($ in min)2010201120122013201420152016$1331917 3246699791$108$586$327$582$ $ Programmatic digital DisplayAd Spending, 2014-2017billions, % change and % of total digital display adspending *Programmatic digitaldisplay ad spending% change% of total digital display ad spending6 Insurance Marketers Will Become Programmatic Ad advertising online advertising that is aggregated, bought, and executed automatically using web interfaces and computational algorithms (think computer-driven program trading in the stock market) is overtaking digital Marketing . As the charts below show, they will impact all forms of advertising: display, mobile and video. Insurance marketers can work with major programmatic ad platforms like Google or Facebook, or invest in proprietary ad platforms as Insurance companies like Geico and Progressive Facts: 67% of US digital display advertising is programmatic.

10 69% of mobile ads are programmatic. 56% of digital video ads are programmatic. xiNote: digital display ads transacted via an API, including everything from publisher-erected APIs to more standardized RTB technology; includes native ads and ads on social networks like Facebok and Twitter; includes advertising that appears on desktop/laptop computers, mobiles phones, tablets and other internet-connected devices; * includes banners, ricj media, sponsorship, video and otherSource: eMarketer, April 2016$ $ $ $ Mobile Programmatic DisplayAd Spending, 2014-2017billions, % change and % of total digital display adspending *Mobile digitaldisplay ad spending% change% of total mobile display ad spendingNote: digital display ads transacted via an API, including everything from publisher-erected APIs to more standardized RTB technology; includes native ads and ads on social networks like Facebok and Twitter.