November 1, 2013
By Maria Minsker, contributing writer

How to Build a Better Brand

Frugal, Not Flashy

While it certainly can't be accused of spending very little on its ads, insurance giant GEICO keeps advertising cost-efficient and simple, demonstrating how practicing restraint can often prove to be more profitable than depleting a massive ad budget.

"For a lot of companies, a big advertising budget means a big advertising campaign. That in and of itself is not a bad thing, but when a big campaign means a complex, flashy message that's more about a celebrity endorser than the product or brand, that becomes a major issue," Riesterer says.

Despite spending $921 million on measured media last year, according to the Ad Age DataCenter, GEICO is careful about the way it spends its money. The company's budget efficiency stems from its smart use of consumer data, Riesterer believes, which enables the company to use its advertising funds intelligently. "This is why they can keep their advertising so simple," he says. "Because they take the time to analyze their customer. And their customer, they determined, doesn't like or need flashy campaigns. Their customer just wants to save money, and GEICO tells them how they can save money...in every ad."

The company's attention to consumer data isn't new; before the Internet, GEICO used to send out millions of pieces of mail to potential customers, tracking any and all interest. Though the company has evolved with the times and shifted its focus from direct mail to phone to Internet and, eventually, to mobile and portable devices, the principle has remained the same.

The company has used its famous tagline, "Fifteen minutes could save you fifteen percent or more on car insurance," for almost 20 years. And the message hasn't gotten old—since it first came into use, the slogan has been tweaked little in recent years and has become so iconic that it now simply states: "Fifteen minutes could save you...well, you know."

"The message is simple, clear, and to the point. When people think of car insurance, they think of it as a necessity," Riesterer explains. "They think, 'I don't want to buy this, but I have to. What can this company offer me that will make me want to buy this product that I don't even want to buy?' And the answer to that is simple: savings."

With a product like insurance, there isn't much to look at. GEICO and other car insurance companies can't show consumers their insurance policies or demonstrate how one is better than another in their ads. In these situations, Riesterer asserts, you can't avoid relying on catchiness. "All car insurance companies offer the same product: car insurance. There are different rates and options, but ultimately, it is what it is. It can be a challenge to sell something that isn't there, and isn't unique," he says.

Still, GEICO has found a way. From the grumpy gecko, bombarded by calls from customers mistaking his number for GEICO's, to the more recent "Happier Than a...." singing duo, the company has found creative, funny, and memorable ways to convey its simple brand message to the public. One of the company's more recent video ads, featuring a camel with the tagline "People who save money on car insurance are happier than a camel on a Wednesday," was incredibly popular on social media. The "Hump Day" video ranked as the fifth most shared ad on social media in the second quarter, according to Unruly Analytics.

With a firm grasp on advertising, the company has performed incredibly well in 2013. According to projections from SNL Financial, GEICO is on its way to surpassing Allstate as the nation's second-largest car insurance company. Its no-nonsense approach to creating advertisements that its customers will enjoy has proven to be cost-effective and profitable, and its simple yet smart and frugal ads have been instrumental in keeping costs down, which is the very reason GEICO continues to offer low prices.

"Virtually unchanged for two decades now, GEICO's message has always been simple. That's why it hasn't had to change—because it works," Riesterer explains. "Companies can definitely learn a thing or two here."

Brand messaging shouldn't solely depend on how much money a company has to spend on advertising. "A large, wealthy company can't afford flashy, gimmicky advertisements and campaigns for the same reason that a small, budding company can't. Because it's not about the money here," Riesterer says. "These types of campaigns don't work unless there is a simple yet strong foundation to stand on—a simple message that resonates with consumers."

Associate Editor Maria Minsker can be reached at mminsker@infotoday.com.