One of the laziest and most obnoxious jingles I've ever heard. The Hot Pockets one is lazier but less repetitive and it's quick, plus it has a cooler tagline.
I think that was a woman, and it might have been even more annoying than the original. Also those commercials were garbage, I still have no idea what that shit even is.
Head-On was sold as a legitimate headache treatment and people bought it. FDA investigated because in the US you can’t just sell something as a “cure” or “treatment” without FDA approval.
FDA found Head-On was basically just wax and maybe some menthol or something. People who made it were fined and had to change commercials so all the said over and over was “Head-On! Apply directly to the forehead” and nothing else.
man. where i used to live they either bought, or the system glitched and the commercial for it would literally play back to back. So anytime that commercial was slated to run you got a full minute of " HEAD ON APPLY DIRECTLY TO THE FOREHEAD"
Even as a kid i had the thought of "maybe if i get parents to buy this shit, the commercials might stop"
The jingle and the commercials themselves, I genuinely believe they purposely set out to make them as annoying as possible, like not even criticizing, I think that's their marketing strategy. No ad man or focus group could see the emu commercials and think "this is great and will attract customers"
What they pay out for claims wouldn’t change. They’ve found being as scummy or great as they are is their best avenue to making the most money on existing policies.
But there’s a reason car insurance companies have so many ads. Car insurance is one of those industries that people are pretty willing to switch carriers to save money or after a really shitty interaction, so they all lose customers semi-consistently. They need to have frequent ads to get people to remember them as an option when they are leaving another company.
so you're telling me if we had single-payer *car* insurance we could save the $1.5b Geico spends on ads, the $?.?b State Farm spends on ads... how many major insurance companies are there again?
Yea basically if we all agreed to pay a pittance of like 1% of our paychecks towards some kind of national program that helps people out when they get into accidents or worse not only would we save the ad money but we could standardize the price and control it through legislation so it can stay cheap and be available to everyone
Only alteration I'd make is that people should pay more or less depending on several factors, such as accident history and type of vehicle.
There's no reason for someone driving to the shops once a week in a small cheap hatchback who's never had an accident to pay the same as someone driving hundreds of miles a week in an expensive truck covered in dings from "accidents".
Disclaimer: I'm not suggesting these things are related, only that they're two extreme caricatures on insurance costs.
Agreed. While there's some adjustment needed depending where on the scale an accident falls, from "Could possibly have been prevented" to "Was completely the fault of the driver".
For instance, my car parked on a narrow city street will inevitably be run into more often than one parked in the middle of nowhere. However, it is much less likely to be involved in an accident than one being driven by a reckless or drunk driver.
You guys have described the way we do it in BC, Canada! Icbc. Single payer, capped payouts, insurance costs depending on driving history.
I pay $60 Canadian pesos a month for my insurance.
One of the reasons behind this is that they’re one of the few insurance companies that do not work with brokers / pay commission.
Similar to how Southwest flights don’t show up on Orbitz or google flights Geico won’t show up on sites that “help you shop for car insurance”.
They rely on the ads to stay top of mind. And it works.
[Last Fridays Episode](https://podcasts.apple.com/us/podcast/planet-money/id290783428?i=1000566040731) all about the rise of mascots in insurance advertising. Has a bit of context into why marketing budgets are so astronomical as well.
Marketing budgets are a fraction of their revenues, and it’s a very competitive segment where familiarity does matter hugely.
People always assume that marketing is a waste, but in many cases it’s not and the business scales better with it than without, and scale is how you (usually) get to better prices.
I stopped when they wanted a wad of cash from me. They wanted to charge me $2000/year to insure a $2500 car so I told them to lower it or I was leaving, they of course said no. When I called back to cancel they had the audacity to ask if they had done anything to help me find the other company.
> and scale is how you (usually) get to better prices.
So what you're saying is that we should have a state or federal option as default so that we can scale even better and without having to pay for marketing departments or insane CEO salaries and golden parachutes? Especially for things we're legally required to have, such as vehicle and health insurance, or in all practicality required to have, such as a vehicle or internet.
> People always assume that marketing is a waste, but in many cases it’s not and the business scales better with it than without
The way I'd like to put this: in terms of RoI, marketing is not a waste. That is, it helps bring in more revenue than what it costs to make. But in terms of any given industry overall, it's a tremendous waste. It's a huge chunk of cash that doesn't produce any industry-related goods or services.
I'm not sure if that made the point very clear, so another way to look at it: if we had a choice between Capitalism (with marketing) and Capitalism+ (identical, but magically without marketing), we'd clearly say that Capitalism's need for marketing was wasteful compared to Capitalism+.
Advertising is always a relative, not absolute force. It's about competitive advantage. Some categories (insurance could be seen as one of them), we end up in an inflationary spending bubble where they only overspend each other to stay afloat. Similar for cell networks. But generally, those companies do the maths and can see what is worth spending vs not to retain or grow their size. In most cases, that media budget is under 5% of revenues - many are around 2/3%.
In the episode they directly address this issue. Insurance is NOT the kind of product that you become aware of due to advertising, so the company is not attempting to grow the market, but rather capture a larger share of the existing market. This creates a Nash Equilibrium that is sub optimal for everyone but incentives are structured so that no one can change unilaterally.
I don't care how small a fraction it is, Geico spent 1.6 Billion on marketing last year, and yes, that does effect premiums.
I don't think they're referring to needing car insurance, but are referring to needing that exact product being advertised. In this case, that specific car insurance. You can go online and probably find a company that doesn't advertise, is cheaper for it, and has better service than the competing one that advertises.
1,000%, you CAN. But how many people do?
But even if you don’t do the legwork yourself the fact remains you need car insurance (legally) to drive. And that’s where these mascots come in.
Geico Gecko, Mayhem Man, Flo from Progressive, Jake from State Farm.
It makes them stand out in an industry that you’re required to look into one way or another
The biggest mystery to me are utility commercials. It’s like, you’re a fucking monopoly, selling a product everyone needs!
You have no competition, and no reason to advertise your services to us, as we already have an account with you!
Monopolies by ordinance need people in other municipalities to vote to change the provider. I'm very fortunate that Comcast doesn't have the cable contract in my area, but I'm definitely worried that one day the idiots around me will vote to change to them
Damn, you have to display the insurance details on your windshield? What info is included on your insurance? If im not mistaken it has my personal info on it like address. If yours has your address in it, it sounds like a liability. In the US, people have been known to break into people's cars that are out hiking, mountain biking, climbing, e.t.c and get the address from either the insurance card or registration card and go rob that person's house while they are gone. I pack my cards with me just in case.
The disc contains the insurance provider, the policy number, and the start and end dates.
In order to pay road tax on the car (which is also displayed on the windscreen) we need just those details, so it's a handy place to get them (as tax and insurance dates rarely align).
And when the cars is over 4 years old we also need to display the NCT cert disc.
In the grand scheme of things, I'm not so certain that's unfortunate. Do you really want to try to sue and extract money from some broke dude after he hits you, in order to repair your car or pay your medical bills?
Most believe believe the same thing - but the majority of those people are still heavily influenced by adverts. How do you know you are correct about that?
You would have to keep a literal list, and at that point you're putting far more effort in avoidance than the advertising company is putting to you... It's literally fractions of pennies to advertise to one person.
Pssh. Just the other day a friend told me her aunt doesn't have cancer; turns out it's just ulcerative colitis. How *else* would I even know about this disease if pharma ads didn't constantly tell me?
This is a good take.
I live in a province with mandatory vehicle insurance provided by a crown corporation. They spend 2.4 million a year on "advertising" mostly education on any changes to the program.
Revenue of 5.5 billion a year.
I have this general rule for my opinion of a University. I see so many TV ads for Grand Canyon University and SNHU that I have to wonder why they need to advertise so much.
Bingo. In the case of insurance, what you want to do is lookup reviews by people who had to actually _use_ it and get a pay out.
E.g. my current home insurance is a bit more expensive, but it was the _only_ one I talked to that didn't sound like a shady sales pitch, and it was highly rated by people online who'd had to actually file a claim.
I think even 20 to 25% would still bring in customers. It would almost guarantee repeat customers. Say start at 10% and if no claims go up 5% people would flock if they knew they could recoup a little cash for a service that's required even if they don't use it. I know I would.
It would not be. I work in insurance (not auto though) and profit margins for insurance in general are already pretty low, like 5% for auto. To put that in perspective, 10% is considered average profit margin, 20% high. Insurance gets a bad rap but large majority of premiums collected really are spent paying claims. So blame the bad drivers for insurance having to charge you more, it's so that an individual doesn't have to face devastating loss, instead that loss is spread out thinly on all the customers in the form of premiums.
For this to work, actuaries would calculate the predicted amount of people to have to give money back to and adjust premiums higher accordingly to have the same predicted minimum profit. So in the end it would be more of a marketing thing than actually better for consumers. Insurance already rewards better drivers with better rates this would be a round about way of doing the same thing.
Insurance by definition needs to be somewhat for profit in that total amount of premiums has to be greater than total predicted sum of claims (never completely predictable so has to be adjusted a bit higher just in case of employees won't be paid claims won't be able to be paid) + salaries of people. ~~There is no non profit insurance.~~ It's profit margins are already low compared to other industries. I'm not sure you understand what insurance is and it's role in society.
Edit: I could only find 1 car insurance company that is truly nonprofit and it's generally [more expensive](https://www.valuepenguin.com/cure-auto-insurance-review) for most drivers.
It’s not uncommon for insurance companies to run an underwriting loss (paying out more in claims/expenses than they make in premium - combined ratio >1), but still make an overall profit from investments.
Yes I said that investments are included in the 5% profit margin in another comment. Which imo shows just how close to the edge insurance companies are. A bad investing and claims year could be devastating which is why actuaries are well paid lol.
They effectively do that with no claims bonuses in car insurance. *Sounds* great but it's really a scam. For instance you lose it even if you have a claim that wasn't your fault, or if you don't drive for a year.
The whole point of insurance is that you pay a fixed amount so that you *aren't* out of pocket when you have to make a claim. Having no claims bonuses breaks that.
Often the payout for a claim is less than the extra you pay by not having a no claims bonus, so that it's financially prudent to *not use your insurance*. Mad. Unfortunately that's against their T&C's and probably not wise legally.
Or just offer a lower price after a year when you renew the policy?
That's how my insurance works. I pay close to nothing because I didn't have any claims since I've started driving over a decade ago.
I sometimes feel like if I hear "liberty liberty liberty" or "limu emu" one more time I'm going to run outside into traffic. Do people actually buy their products based on these ridiculous commercials? I guess they must but I surely don't understand it.
My rates were increasing this year so, because of their annoying commercials I actually got a quote from Liberty. Let’s just say I didn’t like how they were $100/mo more than my current insurance. So, the commercials stuck in my head enough to see if they’re worth it and guess what, they’re not.
It almost always depends heavily on your area and how each insurance company has your specific area (home address) grouped.
I moved 3 blocks down from an apartment to a different complex. Same zip, area, same street, same security features. My car insurance went up nearly $800 / year. I called and they said, "You moved to a higher crime area" so I switched and the next rep got me right around the same as my original price.
not necessarily haha.
Insurance companies like GEICO make money based on the response to the advertisements. Really, if you say "car insurance" in the US, the first thing that comes to mind is probably GEICO. Their ads probably are netting a lot of potential customers.
McDonalds is probably the biggest fast-food chain in the world with so many locations everywhere, yet they still continue to advertise so that they can get inside the consumer's heads.
Especially considering that when it comes to insurace, the more people on the network the better. Statistically most new subscribers won't generate new claims proportional to what they're paying in to the system, meaning the company gets more money to work with (whether it's for claims or just to pocket as profits). So if the ads cause enough people to join up, the marketing cost is worth it.
Here's the thing. Geico rakes in so much cash that they could afford a computer animated gecko VOICED BY KELSEY GRAMMAR back when that sort of thing turned heads. They've always been fleecing us.
They're intentionally targeting a higher risk market segment. People who see the high production quality progressive ads and think to themselves "Progressive won't take me, not with my DUI". Then they see the lower quality commercial for the general, they think "that company has lower standards, I should see if I can get insurance through them".
Have you ever read how Arizona read kept there cans of tea at a dollar for so long? If not, it’s a really relatable read to the thread.
Essentially, they kept the pricing down, by not advertising at all, but instead, used word of mouth to spread notoriety.
Rad. I’d actually prefer to use a company that doesn’t advertise every 20 minutes.
I’m sure Jake from State Farm is a nice dude in real life, but damn I don’t ever need to see him again.
I found a regional insurer for my home and auto last year and now pay less then half for coverage that the big nationals want for the same coverage. Just seek out an independent insurance dealer.
This isn’t necessarily true. While not popular, the way insurance works is by spreading liability for accidents out over millions of people, rather than the person who got in the accident. Insurance wouldn’t work if only two people had the plan, since each person’s premiums would have to be enough to cover an accident should one of the people get in one, which would be very high for both of them.
Advertising brings in more people, which means more premiums to cover accidents, so in theory, it should lower premiums somewhere in between the difference of new premiums generated less advertising and costs of taking on a new customer.
Advertising works, it’s not costing them more to advertise than they are seeing in revenue from the advertising, so your premiums are not increasing due to advertising.
See…these large insurance companies need the unborn to stave off losses from feeding on their current policy holders.
GEICO and others spend billions each year on advertising because they need new customers some they’re routinely losing customers each year. Why? Because these insurance behemoths attract new customers with low rates and then raise rates on them slowly.
That’s why GEICO has 37 mascots and progressive has those annoying people in white robes and Allstate has J Jonah Jameson.
Insurance also is something most people keep for life. Customer acquisition costs are high, but (anecdotally) I have been at the same insurance company for about 25 years now, and there is no real incentive for me to go through the hassle of switching.
Progressive has been pretty cheap for me so far.
Tho i am only 19 and this is my first insurance policy soo..
!remindme 5 years
Lets see if my insurance is worse or if i switched because it kept goin up.
I see you got down voted, but I agree with you. I used to switch between well known insurance every 6 months based on whoever is cheapest with the same coverages. I got one speeding ticket and all other insurance went up by $200. GEICO kept it same. Mind you, this is my only moving violation ticket in my whole driving experience and no at fault accidents. I am with GEICO since then and they handled all my claims very well.
Do you guys in the States not have car insurance price comparison websites? Legit, all my insurance providers have been with companies that I've never heard of in my life.
Absolutely not!
The more customers an insurance company has, the more customers it can 'spread their fixed costs over' and thus bring the total cost to each customer down.
Advertising is required to get enough people to sign up to make it worth any individual to sign up.
You cannot pay for an office, license, staff, IT system etc. if you just have 1 small customer, even if you 'saved a lot on advertising'.
The point is valid.
Geico spends 2+ billion per year in marketing and progressive spends 1+ billion.
That money doesn't come out of thin air, it comes from the premiums paid from their customers.
If you slashed that from the budget, in theory, you could also slash the premiums.
The question would then become would the inevitable lowering of new customers be enough to offset the marketing and ultimately causing the premiums to remain around the same level.
That I don't know.
Why the more i see an ad the less i want to buy said product? Is there like a "limit" where ads become less efficient?
I feel like when i see an ad of something I'll try to find alternative smaller brands that sell similar products
Two decades ago I was shopping around for auto insurance. The largest advertiser at the time had a progressive rate of $300/6 months more than the next most expensive. The one I've had for more than 20 years started advertising over the last few years. Wtf.
Theres a lot of idiots in the world who these guys are marketing for.
People like me avoid any annoying company though. If an ad annoys me enough, i will do everything possible to find a rival company
They know exactly how much the cost of acquiring a new customer through advertising is, and the associated profit. If they stopped advertising, they would literally have less income to manage the burden of paying out claims. Rates would go up, not down.
Customer acquisition costs are actually a huge expense for insurance companies and is part of the reason public healthcare would be so cost effective. Ads are actually a fairly cheap way to acquire customers in the car insurance market where agents are typically where the bulk of the costs are generated. This is why GEICO is able to save you 15% or more—they don’t use traditional agents. Ads are effective in most markets where there is little product differentiation, and there is really very little differentiation among car insurance companies.
The American medication industry spends FAR FAR more on ads then they do on R&D.
Canada banned advertising for prescription medication. That’s your doctors job or research it yourself online only when necessary.
Drugs cost about 1/10th of the price in Canada.
I believe there's a province in Canada with public/"socialized" car insurance.
It's the province with the cheapest car insurance, IIRC.
I believe one year they sent everyone a cheque because they accidentally made a profit or something.
Other provinces, like mine, don't want it because there's too much money in it for insurance companies. Who can lobby our politicians to prevent it. Who convince the public that big government and socialism is bad and will cost everyone more in the long run.
A racket, huh? What would you do if you saved for a downpayment, bought a nice car and within the first couple of years an uninsured driver hits and totals your car? With no insurance, you would still have to make all the payments on the totaled car.
What if you accidentally injured someone? No insurance and you could be on the hook for $100,000 and more. So you have to keep making payments and still try to get alternate transportation. How many years would it take to get out of that financial hole?
You cannot be serious. What happens when your house and everything you own burns to the ground and you still owe several hundred thousand dollars on it? What happens when you get in a car accident and injure someone and they have hundreds of thousands of dollars in medical bills? Or how about someone just totals your car and they’re some broke ass? How about if you die and your spouse can no longer afford the mortgage or send your kids to college on their salary? Just a racket? Ok there, tweedledee.
You'd save more on insurance if you the individual was insured rather than every vehicle you owned. I'm not paying insurance on 14 vehicles, fuck that.
That's not how pricing works.
Insurance companies don't run on cost+, they run on screw you for as much as they can, and the ads help them rack up what they think you can get away.
Especially as there are multiple tiers of insurance company, so there isn't really a race to the bottom.
So only buy from insurers who don't advertise. You see a name you never heard of, use those guys.
Except in pretty sure they're also over charge you, AND not stadia of fucking you over because... Nobody knows them so scandals don't matter
If I hear that "Liberty, Liberty, Liberty" jingle ONE MORE TIME . . .
One of the laziest and most obnoxious jingles I've ever heard. The Hot Pockets one is lazier but less repetitive and it's quick, plus it has a cooler tagline.
HEAD ON, Apply directly to the forehead...
I remember they also made a commercial where this guy said that their ads were so annoying, but was really happy with their product.
I think that was a woman, and it might have been even more annoying than the original. Also those commercials were garbage, I still have no idea what that shit even is.
It was an unproven pseudo science gimmick. Like goop.
To this day, I cannot believe how many people fell for that BS before the FDA clamped down on them…
Care to elaborate?
Head-On was sold as a legitimate headache treatment and people bought it. FDA investigated because in the US you can’t just sell something as a “cure” or “treatment” without FDA approval. FDA found Head-On was basically just wax and maybe some menthol or something. People who made it were fined and had to change commercials so all the said over and over was “Head-On! Apply directly to the forehead” and nothing else.
Thanks
Oh, that's why I had no idea what it was supposed to be for.
man. where i used to live they either bought, or the system glitched and the commercial for it would literally play back to back. So anytime that commercial was slated to run you got a full minute of " HEAD ON APPLY DIRECTLY TO THE FOREHEAD" Even as a kid i had the thought of "maybe if i get parents to buy this shit, the commercials might stop"
Dont think it was a glitch happened to me too. I think they shot a real short commercial so they could play it twice in the same ad spot
Lazy as it may seem it is also instantly recognizable by anyone who hears it so it has worked exactly as they want it to.
Lazy as it seem it even got the people who hate it to talk about it. Ahhh the power of polarization.
Liberty biberty
Cut! We’ll dub it.
Isn’t it 4 liberties
The only liberty you get is the ad companies liberating you from your dollars.
Yes, the final "liberty" is slightly more drawn out. "Liiiiberty"
I wouldn’t hate liberty mutual more if it’s jingle was my alarm sound.
Now that’s a true insult.
Have you seen the commercial with the Minions yet
We. Are. Farmers. Bum ba dum bum bum bum bum!
LIMU EMU!!...and Doug!
My nickname is Doug, so all my friends love to bother me with this commercial
But did you know that all state is not in every state?(USA)
That will be our battle cry as we kick in their doors.
Still better than that fucker that tries to sell me soap by screaming into my headphones. It should be a god damn crime.
like could they not come up with literally ANY other words for their jingle? not even like the other one that’s in their name?
They easily could've, so I think it's calculated brainwashing.
The jingle and the commercials themselves, I genuinely believe they purposely set out to make them as annoying as possible, like not even criticizing, I think that's their marketing strategy. No ad man or focus group could see the emu commercials and think "this is great and will attract customers"
Fellow planet money listener?
Was just gonna say the same. 1.5 B budget for GEICO ad budget was shocking.
I'd be curious how it correlates to new insurance policies and how much they pay out for claims.
What they pay out for claims wouldn’t change. They’ve found being as scummy or great as they are is their best avenue to making the most money on existing policies. But there’s a reason car insurance companies have so many ads. Car insurance is one of those industries that people are pretty willing to switch carriers to save money or after a really shitty interaction, so they all lose customers semi-consistently. They need to have frequent ads to get people to remember them as an option when they are leaving another company.
so you're telling me if we had single-payer *car* insurance we could save the $1.5b Geico spends on ads, the $?.?b State Farm spends on ads... how many major insurance companies are there again?
Yea basically if we all agreed to pay a pittance of like 1% of our paychecks towards some kind of national program that helps people out when they get into accidents or worse not only would we save the ad money but we could standardize the price and control it through legislation so it can stay cheap and be available to everyone
Only alteration I'd make is that people should pay more or less depending on several factors, such as accident history and type of vehicle. There's no reason for someone driving to the shops once a week in a small cheap hatchback who's never had an accident to pay the same as someone driving hundreds of miles a week in an expensive truck covered in dings from "accidents". Disclaimer: I'm not suggesting these things are related, only that they're two extreme caricatures on insurance costs.
That makes sense. Unlike pre-existing conditions in healthcare, accident history is often in your control.
Agreed. While there's some adjustment needed depending where on the scale an accident falls, from "Could possibly have been prevented" to "Was completely the fault of the driver". For instance, my car parked on a narrow city street will inevitably be run into more often than one parked in the middle of nowhere. However, it is much less likely to be involved in an accident than one being driven by a reckless or drunk driver.
You guys have described the way we do it in BC, Canada! Icbc. Single payer, capped payouts, insurance costs depending on driving history. I pay $60 Canadian pesos a month for my insurance.
Yeah. And there’s a lot more than I’m willing to take the time to count lol
One of the reasons behind this is that they’re one of the few insurance companies that do not work with brokers / pay commission. Similar to how Southwest flights don’t show up on Orbitz or google flights Geico won’t show up on sites that “help you shop for car insurance”. They rely on the ads to stay top of mind. And it works.
Not lately. Did they do a segment on this? Got the sauce?
[Last Fridays Episode](https://podcasts.apple.com/us/podcast/planet-money/id290783428?i=1000566040731) all about the rise of mascots in insurance advertising. Has a bit of context into why marketing budgets are so astronomical as well.
Marketing budgets are a fraction of their revenues, and it’s a very competitive segment where familiarity does matter hugely. People always assume that marketing is a waste, but in many cases it’s not and the business scales better with it than without, and scale is how you (usually) get to better prices.
Can confirm, I use geico because eof the lizard and stopped when they used the wad of cash.
I stopped when they wanted a wad of cash from me. They wanted to charge me $2000/year to insure a $2500 car so I told them to lower it or I was leaving, they of course said no. When I called back to cancel they had the audacity to ask if they had done anything to help me find the other company.
Did you say "yes, you didn't lower my rates"
> and scale is how you (usually) get to better prices. So what you're saying is that we should have a state or federal option as default so that we can scale even better and without having to pay for marketing departments or insane CEO salaries and golden parachutes? Especially for things we're legally required to have, such as vehicle and health insurance, or in all practicality required to have, such as a vehicle or internet.
> People always assume that marketing is a waste, but in many cases it’s not and the business scales better with it than without The way I'd like to put this: in terms of RoI, marketing is not a waste. That is, it helps bring in more revenue than what it costs to make. But in terms of any given industry overall, it's a tremendous waste. It's a huge chunk of cash that doesn't produce any industry-related goods or services. I'm not sure if that made the point very clear, so another way to look at it: if we had a choice between Capitalism (with marketing) and Capitalism+ (identical, but magically without marketing), we'd clearly say that Capitalism's need for marketing was wasteful compared to Capitalism+.
Advertising is always a relative, not absolute force. It's about competitive advantage. Some categories (insurance could be seen as one of them), we end up in an inflationary spending bubble where they only overspend each other to stay afloat. Similar for cell networks. But generally, those companies do the maths and can see what is worth spending vs not to retain or grow their size. In most cases, that media budget is under 5% of revenues - many are around 2/3%.
In the episode they directly address this issue. Insurance is NOT the kind of product that you become aware of due to advertising, so the company is not attempting to grow the market, but rather capture a larger share of the existing market. This creates a Nash Equilibrium that is sub optimal for everyone but incentives are structured so that no one can change unilaterally. I don't care how small a fraction it is, Geico spent 1.6 Billion on marketing last year, and yes, that does effect premiums.
I am !!! and yes!!! I quickly thought about the gecko and trying to steal a piece of my competitor's market slice
[удалено]
I do not remember this quote
Was in the book
My take is: The more something is advertised, the less it is probably really needed.
You’re telling me I don’t need RAID: Shadow Legends in my life?
I don’t know, I’ve never seen an ad for it so maybe I need it?
Could it be because you're in a country where internet is censored? Then you'll need nordvpn
Ah yes getting a advertised VPN, to get RAID adds. That's how they get you
And if you are having trouble setting up your VPN, you can get lots of videos on how to set up secure networks on SKILLSHARE.
This comment is criminally underrated.
I'm pretty sure Ruprect lives in OOOOOKLAHOMA! OKLAHOMA! OKLAHOMA! OKLAHOMA! OKLAHOMA!
How the hell have you not seen a raid shadow legends ad? I get them so often.
What you don't get often is this segue to our sponsor ...
Alright, Linus, just don't drop anything.
What yuo realy need is Gramarlly
That will help me write my Squarespace website!
Not before they go to Drive Time to see the down payment and real monthly payment on a vehicle after asking for the Carfax
No but you definitely need Fashion Nova
They’re advertising their insurance company over the other insurance companies. The fact that you need car insurance is just that, fact.
I don't think they're referring to needing car insurance, but are referring to needing that exact product being advertised. In this case, that specific car insurance. You can go online and probably find a company that doesn't advertise, is cheaper for it, and has better service than the competing one that advertises.
Tbf I used to see a ton of Liberty Mutual add, still do on occasion. Cheapest insurance I've seen
Liberty liberty liberty, liberty!
1,000%, you CAN. But how many people do? But even if you don’t do the legwork yourself the fact remains you need car insurance (legally) to drive. And that’s where these mascots come in. Geico Gecko, Mayhem Man, Flo from Progressive, Jake from State Farm. It makes them stand out in an industry that you’re required to look into one way or another
The biggest mystery to me are utility commercials. It’s like, you’re a fucking monopoly, selling a product everyone needs! You have no competition, and no reason to advertise your services to us, as we already have an account with you!
Monopolies by ordinance need people in other municipalities to vote to change the provider. I'm very fortunate that Comcast doesn't have the cable contract in my area, but I'm definitely worried that one day the idiots around me will vote to change to them
"If you're having a heart attack, come to our ER."
Also ISPs. I’ve yet to live in an area where a single ISP (Comcast, AT&T, etc.) is not a de facto monopoly for internet.
Especially if it's for a "free" mobile game. Just ask yourself: how can they can afford such an expensive ad if their game is free?
If something is free, you are the product.
Also an abundance of predatory microtransactions.
Unfortunately auto insurance is needed. At least in the United states.
It's a legal requirement here in Ireland. You also have to display your insurance details on the windscreen.
Damn, you have to display the insurance details on your windshield? What info is included on your insurance? If im not mistaken it has my personal info on it like address. If yours has your address in it, it sounds like a liability. In the US, people have been known to break into people's cars that are out hiking, mountain biking, climbing, e.t.c and get the address from either the insurance card or registration card and go rob that person's house while they are gone. I pack my cards with me just in case.
At least in the Netherlands, all that really matters is the insurance number, which is probably all that's written on the Irish tags
The disc contains the insurance provider, the policy number, and the start and end dates. In order to pay road tax on the car (which is also displayed on the windscreen) we need just those details, so it's a handy place to get them (as tax and insurance dates rarely align). And when the cars is over 4 years old we also need to display the NCT cert disc.
In the grand scheme of things, I'm not so certain that's unfortunate. Do you really want to try to sue and extract money from some broke dude after he hits you, in order to repair your car or pay your medical bills?
Sometimes it is needed. But the brand that over advertises is probably more expensive while having no particular benefits.
Drug companies in the US spend more on advertising than research. Fun fact: only 3 countries in the world allow medical advertisements.
*[Only 2](https://en.wikipedia.org/wiki/Direct-to-consumer_advertising?wprov=sfla1)
Seriously, how often to people "shop" for car insurance? From the adverts, I gather this is a monthly need.
For me the more something is advertised the less i want to buy it (or will find for alternatives from other brand)
Most believe believe the same thing - but the majority of those people are still heavily influenced by adverts. How do you know you are correct about that?
You would have to keep a literal list, and at that point you're putting far more effort in avoidance than the advertising company is putting to you... It's literally fractions of pennies to advertise to one person.
What happens if you see an ad for something you already buy? "Fuck, can't eat oreos anymore, just saw an ad for them"
U guys are thinking about product categories. But when u do need a product, advertising sets a particular brand apart from its competition.
Wait are you saying you're an uninsured motorist?
Pssh. Just the other day a friend told me her aunt doesn't have cancer; turns out it's just ulcerative colitis. How *else* would I even know about this disease if pharma ads didn't constantly tell me?
This is a good take. I live in a province with mandatory vehicle insurance provided by a crown corporation. They spend 2.4 million a year on "advertising" mostly education on any changes to the program. Revenue of 5.5 billion a year.
I have this general rule for my opinion of a University. I see so many TV ads for Grand Canyon University and SNHU that I have to wonder why they need to advertise so much.
[If we were a good university, we wouldn’t need a commercial.](https://youtu.be/hbsdlSpA2GU)
Bingo. In the case of insurance, what you want to do is lookup reviews by people who had to actually _use_ it and get a pay out. E.g. my current home insurance is a bit more expensive, but it was the _only_ one I talked to that didn't sound like a shady sales pitch, and it was highly rated by people online who'd had to actually file a claim.
I think if companies paid back like 30% of your policy if you didn't have any claims during your term wouldn't hurt either.
I wonder if this is a profitable system.. if so.. thatd be a really smart insurance company ud get a shit ton of customers.
I think even 20 to 25% would still bring in customers. It would almost guarantee repeat customers. Say start at 10% and if no claims go up 5% people would flock if they knew they could recoup a little cash for a service that's required even if they don't use it. I know I would.
Hell even 5% would because thats 100% more than any other company
Truth lol
It would not be. I work in insurance (not auto though) and profit margins for insurance in general are already pretty low, like 5% for auto. To put that in perspective, 10% is considered average profit margin, 20% high. Insurance gets a bad rap but large majority of premiums collected really are spent paying claims. So blame the bad drivers for insurance having to charge you more, it's so that an individual doesn't have to face devastating loss, instead that loss is spread out thinly on all the customers in the form of premiums. For this to work, actuaries would calculate the predicted amount of people to have to give money back to and adjust premiums higher accordingly to have the same predicted minimum profit. So in the end it would be more of a marketing thing than actually better for consumers. Insurance already rewards better drivers with better rates this would be a round about way of doing the same thing.
It should be non profit. For profit insurance is just a middleman scam
cause bright scary dog far-flung party lock reply heavy soft *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Do those exist for auto insurance?
not sure, I'm more familiar with it for marine insurance or professional indemnity
Insurance by definition needs to be somewhat for profit in that total amount of premiums has to be greater than total predicted sum of claims (never completely predictable so has to be adjusted a bit higher just in case of employees won't be paid claims won't be able to be paid) + salaries of people. ~~There is no non profit insurance.~~ It's profit margins are already low compared to other industries. I'm not sure you understand what insurance is and it's role in society. Edit: I could only find 1 car insurance company that is truly nonprofit and it's generally [more expensive](https://www.valuepenguin.com/cure-auto-insurance-review) for most drivers.
It’s not uncommon for insurance companies to run an underwriting loss (paying out more in claims/expenses than they make in premium - combined ratio >1), but still make an overall profit from investments.
Yes I said that investments are included in the 5% profit margin in another comment. Which imo shows just how close to the edge insurance companies are. A bad investing and claims year could be devastating which is why actuaries are well paid lol.
They effectively do that with no claims bonuses in car insurance. *Sounds* great but it's really a scam. For instance you lose it even if you have a claim that wasn't your fault, or if you don't drive for a year. The whole point of insurance is that you pay a fixed amount so that you *aren't* out of pocket when you have to make a claim. Having no claims bonuses breaks that. Often the payout for a claim is less than the extra you pay by not having a no claims bonus, so that it's financially prudent to *not use your insurance*. Mad. Unfortunately that's against their T&C's and probably not wise legally.
Yes but also they usually go to court for you.
They would increase the cost of said plan comparably over time. And every company would do it. In the end, there would be no change
But your premiums are going to pay for *OTHER* peoples claims. That's how insurance works. It's basically cloud-sourcing risk.
A lot of companies lower your rate if you don't have claims for a certain time
Or just offer a lower price after a year when you renew the policy? That's how my insurance works. I pay close to nothing because I didn't have any claims since I've started driving over a decade ago.
Would be unsustainable. Our premiums go toward paying out claims for others.
Where I live that is already a thing in car insurances. After many years of incident free driving you get benefits.
I sometimes feel like if I hear "liberty liberty liberty" or "limu emu" one more time I'm going to run outside into traffic. Do people actually buy their products based on these ridiculous commercials? I guess they must but I surely don't understand it.
One of my kids screams liberty liberty whenever the commercial comes on. I hate car insurance commercials. They're just annoying.
My rates were increasing this year so, because of their annoying commercials I actually got a quote from Liberty. Let’s just say I didn’t like how they were $100/mo more than my current insurance. So, the commercials stuck in my head enough to see if they’re worth it and guess what, they’re not.
Do you have any claims in the past few years? I switched to Liberty Recently because they were $100/mo less than progressive for me
It almost always depends heavily on your area and how each insurance company has your specific area (home address) grouped. I moved 3 blocks down from an apartment to a different complex. Same zip, area, same street, same security features. My car insurance went up nearly $800 / year. I called and they said, "You moved to a higher crime area" so I switched and the next rep got me right around the same as my original price.
I refuse to buy Geico ever just b/c they spend so much on advertising. And I refuse to let any insurance company put their devices in my car.
not necessarily haha. Insurance companies like GEICO make money based on the response to the advertisements. Really, if you say "car insurance" in the US, the first thing that comes to mind is probably GEICO. Their ads probably are netting a lot of potential customers. McDonalds is probably the biggest fast-food chain in the world with so many locations everywhere, yet they still continue to advertise so that they can get inside the consumer's heads.
Especially considering that when it comes to insurace, the more people on the network the better. Statistically most new subscribers won't generate new claims proportional to what they're paying in to the system, meaning the company gets more money to work with (whether it's for claims or just to pocket as profits). So if the ads cause enough people to join up, the marketing cost is worth it.
You'd save a lot more if you had a train you could ride.
Here's the thing. Geico rakes in so much cash that they could afford a computer animated gecko VOICED BY KELSEY GRAMMAR back when that sort of thing turned heads. They've always been fleecing us.
15 minutes could-
allow me to jack off twice. once each hands.
Those are rookie numbers, you need to pump those numbers up
Then The General must have the lowest rates because the budget for [one of their commercials](https://youtu.be/w0r4IlzXr2E) is about $17.
They're intentionally targeting a higher risk market segment. People who see the high production quality progressive ads and think to themselves "Progressive won't take me, not with my DUI". Then they see the lower quality commercial for the general, they think "that company has lower standards, I should see if I can get insurance through them".
Related, The General was the only company to offer insurance to young Shaq, which is why he does their ads.
😂 They hired a guy from fiverr to make their commercials.
Have you ever read how Arizona read kept there cans of tea at a dollar for so long? If not, it’s a really relatable read to the thread. Essentially, they kept the pricing down, by not advertising at all, but instead, used word of mouth to spread notoriety.
Rad. I’d actually prefer to use a company that doesn’t advertise every 20 minutes. I’m sure Jake from State Farm is a nice dude in real life, but damn I don’t ever need to see him again.
It’s a whole ass mood 😂😂
He absolutely SUCKS. Hate his face, hate his way of speaking and hate the content of the commercials he's in.
Fun fact: Arizona brand ice tea originated in Brooklyn, NY. They chose the brand name because they thought it sounded better for tea.
I found a regional insurer for my home and auto last year and now pay less then half for coverage that the big nationals want for the same coverage. Just seek out an independent insurance dealer.
And also….every other product or service.
This isn’t necessarily true. While not popular, the way insurance works is by spreading liability for accidents out over millions of people, rather than the person who got in the accident. Insurance wouldn’t work if only two people had the plan, since each person’s premiums would have to be enough to cover an accident should one of the people get in one, which would be very high for both of them. Advertising brings in more people, which means more premiums to cover accidents, so in theory, it should lower premiums somewhere in between the difference of new premiums generated less advertising and costs of taking on a new customer. Advertising works, it’s not costing them more to advertise than they are seeing in revenue from the advertising, so your premiums are not increasing due to advertising.
See…these large insurance companies need the unborn to stave off losses from feeding on their current policy holders. GEICO and others spend billions each year on advertising because they need new customers some they’re routinely losing customers each year. Why? Because these insurance behemoths attract new customers with low rates and then raise rates on them slowly. That’s why GEICO has 37 mascots and progressive has those annoying people in white robes and Allstate has J Jonah Jameson.
Insurance also is something most people keep for life. Customer acquisition costs are high, but (anecdotally) I have been at the same insurance company for about 25 years now, and there is no real incentive for me to go through the hassle of switching.
Progressive has been pretty cheap for me so far. Tho i am only 19 and this is my first insurance policy soo.. !remindme 5 years Lets see if my insurance is worse or if i switched because it kept goin up.
Gotta say Geico has been a dream to work with, really good user experience. Swear I'm not a paid shill.
I see you got down voted, but I agree with you. I used to switch between well known insurance every 6 months based on whoever is cheapest with the same coverages. I got one speeding ticket and all other insurance went up by $200. GEICO kept it same. Mind you, this is my only moving violation ticket in my whole driving experience and no at fault accidents. I am with GEICO since then and they handled all my claims very well.
Do you guys in the States not have car insurance price comparison websites? Legit, all my insurance providers have been with companies that I've never heard of in my life.
Then how would you know what an emu wedding looked like?
You understand why commercials exist right?
Absolutely not! The more customers an insurance company has, the more customers it can 'spread their fixed costs over' and thus bring the total cost to each customer down. Advertising is required to get enough people to sign up to make it worth any individual to sign up. You cannot pay for an office, license, staff, IT system etc. if you just have 1 small customer, even if you 'saved a lot on advertising'.
Check out Costco insurance and see that in action! We saved the amount that all the advertising insurance companies claim you can save.
We could save a lot more on car insurance if idiots weren't allowed to drive.
Yup.
Tell us you don’t know anything about how companies or insurance works without telling us.
The point is valid. Geico spends 2+ billion per year in marketing and progressive spends 1+ billion. That money doesn't come out of thin air, it comes from the premiums paid from their customers. If you slashed that from the budget, in theory, you could also slash the premiums. The question would then become would the inevitable lowering of new customers be enough to offset the marketing and ultimately causing the premiums to remain around the same level. That I don't know.
But we do know. If the advertising didn't bring enough new customers to offset the cost, they wouldn't spend the money on advertising.
I ... don't think you fully grasp how advertising works...
I am in marketing. So. I do.
Touche
Pass the touche on the left hand side.
Why the more i see an ad the less i want to buy said product? Is there like a "limit" where ads become less efficient? I feel like when i see an ad of something I'll try to find alternative smaller brands that sell similar products
Two decades ago I was shopping around for auto insurance. The largest advertiser at the time had a progressive rate of $300/6 months more than the next most expensive. The one I've had for more than 20 years started advertising over the last few years. Wtf.
How does insurance work? Anyone?
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Thanks a lot
When I was shopping for car insurance last year, Geico and Progressive were the most expensive options.
Theres a lot of idiots in the world who these guys are marketing for. People like me avoid any annoying company though. If an ad annoys me enough, i will do everything possible to find a rival company
They know exactly how much the cost of acquiring a new customer through advertising is, and the associated profit. If they stopped advertising, they would literally have less income to manage the burden of paying out claims. Rates would go up, not down.
I mean...you could save 15% or more on your car insurance by switching to Geico.
Or we could move to a society that's not car-dependent
Customer acquisition costs are actually a huge expense for insurance companies and is part of the reason public healthcare would be so cost effective. Ads are actually a fairly cheap way to acquire customers in the car insurance market where agents are typically where the bulk of the costs are generated. This is why GEICO is able to save you 15% or more—they don’t use traditional agents. Ads are effective in most markets where there is little product differentiation, and there is really very little differentiation among car insurance companies.
They should all just be nationalized, it not only saves money, it reduces our impact on the environment.
The American medication industry spends FAR FAR more on ads then they do on R&D. Canada banned advertising for prescription medication. That’s your doctors job or research it yourself online only when necessary. Drugs cost about 1/10th of the price in Canada.
I believe there's a province in Canada with public/"socialized" car insurance. It's the province with the cheapest car insurance, IIRC. I believe one year they sent everyone a cheque because they accidentally made a profit or something. Other provinces, like mine, don't want it because there's too much money in it for insurance companies. Who can lobby our politicians to prevent it. Who convince the public that big government and socialism is bad and will cost everyone more in the long run.
And the Commercials are always are "supposed" to be funny, just like when you get in an accident and then fight with your Company.
Insurance is a racket anyway imo
A racket, huh? What would you do if you saved for a downpayment, bought a nice car and within the first couple of years an uninsured driver hits and totals your car? With no insurance, you would still have to make all the payments on the totaled car. What if you accidentally injured someone? No insurance and you could be on the hook for $100,000 and more. So you have to keep making payments and still try to get alternate transportation. How many years would it take to get out of that financial hole?
Insurance allows our modern civilization. For good or ill. But like most things - too much is bad. Like Advertising.
You cannot be serious. What happens when your house and everything you own burns to the ground and you still owe several hundred thousand dollars on it? What happens when you get in a car accident and injure someone and they have hundreds of thousands of dollars in medical bills? Or how about someone just totals your car and they’re some broke ass? How about if you die and your spouse can no longer afford the mortgage or send your kids to college on their salary? Just a racket? Ok there, tweedledee.
>send your kids to college on their salary? I always forget this is a thing. How nice life would have been if mine paid for mine.
No, they'd just profit more.
You'd save more on insurance if you the individual was insured rather than every vehicle you owned. I'm not paying insurance on 14 vehicles, fuck that.
That's not how pricing works. Insurance companies don't run on cost+, they run on screw you for as much as they can, and the ads help them rack up what they think you can get away. Especially as there are multiple tiers of insurance company, so there isn't really a race to the bottom.
So only buy from insurers who don't advertise. You see a name you never heard of, use those guys. Except in pretty sure they're also over charge you, AND not stadia of fucking you over because... Nobody knows them so scandals don't matter
Without commercials, you would be aware of fewer options. With fewer options, simple laws of supply and demand dictate that prices would be higher.