Like A Good Neighbor, State Farm Is Everywhere During Coronavirus Shutdown

With live sports on hiatus, there aren’t a lot of major TV events that can get everybody talking. Things like the Chicago Bulls documentary on ESPN, the “Disney Family Singalong” on ABC, and Thursday night’s “Parks and Recreation” reunion have been pretty much it.

And State Farm has been a big part of each.

The coronavirus has upended marketing strategies for companies big and small. For insurers like State Farm, that disruption comes as they need to tell the world about important changes—like giving back billions in refunds—while also protecting their especially cost-conscious customers from being poached by competitors.

“What’s unique about it is, advertisers, media partners, everybody—we’re all sort of in the same boat. ‘Alright, this has never happened before. How are we gonna handle this? How are going to work together to find the best solutions that are really win-win for everyone?’” said Patty Morris, assistant vice president of marketing at State Farm.

Bloomington-based State Farm wasn’t exactly under-the-radar before the coronavirus hit. It spent $1.2 billion in advertising in 2019, according to an analysis of regulatory data by S&P Global Market Intelligence.

But during the pandemic, State Farm has been especially visible. It has a major sponsorship for “The Last Dance” Bulls documentary, which saw its premiere moved up from June to fill the gaping hole in content. State Farm did a charitable promotion on the “Tonight Show with Jimmy Fallon.” And it’s sponsoring Thursday night’s “Parks and Recreation” reunion that will raise money for Feeding America.

“We’ve got partners who are scrambling for content, and then that affects viewership to some degree,” Morris told WGLT. “We’re wanting to make sure we’re shifting and changing and doing the right things to maximize those investments at a time when there’s just an unforeseeable situation we’re all in together.”

As auto insurance has become more consumer-facing, companies have doubled their ad spending in the past decade, up to $9 billion industrywide, said Tom Super, vice president for property and casualty insurance intelligence at J.D. Power.

“Brand has become much more central in the mind of consumers when it comes to selecting their auto insurance company,” said Super. “It’s really important to be top of mind for consumers when they’re going out and shopping.”

To that end, State Farm is a staple of major live events. It launched a new campaign, featuring a remix of the “Jake From State Farm” character, at the Super Bowl. And before the coronavirus hit, State Farm planned a significant presence during the NBA playoffs (delayed, at least) and the NCAA Tournament (canceled).

As for the company’s advertising budget: “We’re working within what we had planned. It’s just changing and shifting. And it’s changing and shifting on a weekly and sometimes daily basis based on things that are getting paused or canceled, and new opportunities that are coming up,” Morris said.

Homemade Advertising

Another challenge is it’s simply harder to create content with everyone stuck at home.

State Farm’s latest 30-second video ad features homebound employees speaking selfie-style to customers about the company’s plan to return about $2 billion in premiums. (Less driving means fewer car crashes. Fewer car crashes mean big savings for auto insurers.)

That whole commercial, which aired during the “Disney Family Singalong,” was filmed and broadcast in the span of about 48 hours, Morris said. (Yes, that’s a record.)

Another unusual part of the ad: It featured State Farm Chairman, President and CEO Michael Tipsord. That was the first time he’s been featured personally in a commercial.

“We wanted it to be an authentic personal message. We felt it was really important for our customers to hear directly from him during this challenging time,” Morris said.

https://www.youtube.com/watch?v=mgev7lbiD3A

And why does a company need to spend money to tell its customers it’s sending them money? One reason is that only 37% of auto insurance customers were aware their carrier had announced a premium relief program of some kind as of mid-April, according to research from JDPower. More than half of those surveyed think their miles driven will remain lower for a significant period of time after COVID-19.

“Customers have higher expectations. They’re expecting their carriers to reach out to them to make sure they’re covered and also to find ways to save money,” Super said.

Changing Consumption

The coronavirus has merely accelerated trends in insurance industry advertising that were already there, said Bob McKinnon, principal analyst in the marketing leadership strategies services area at Forrester Research. More money is being spent on video and social media, and less on print and traditional TV.

“A lot of people are just trying to figure out where the consumer is, so that we can engage with them how they want to engage in this environment,” McKinnon said.

For State Farm, that’s meant buying into new spaces. It’s a presenting sponsor, for example, of “The Bill Simmons Podcast” and “The Rewatchables” podcast from The Ringer. Earlier this week, iHeartMedia launched its Living Room Concert Series—presented by State Farm.

“We’re seeing huge spikes in things like streaming and digital consumption and audio, and that all makes sense,” Morris said. “But it does require some shifting based on what we had planned.”

Historically, insurance companies struggled to deliver an authentic message to customers and then actually deliver a customer experience that’s as good or easy as promised, said McKinnon. While they have improved, he said, moments like this put it to the test.

State Farm is the largest auto insurer in the country, with about a 16% market share.

“In this environment, the focus isn’t growing your business. It’s really about retaining your loyal customers,” said McKinnon. “(Customers) are trying to stick with what they have for now. And when things calm down, they’ll say, ‘Hey, my insurance partner wasn’t there for me during this crisis. Now I’m gonna think about a new opportunity.’ Insurance companies realize that.”

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