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SALT LAKE CITY — Have you noticed there is a lot of TV advertising for car insurance lately? The campaigns get your attention with talking lizards or a girl named "Flo," even if they don't seem to tell you much about, well, car insurance.
That's because there is a TV war among companies trying to win your business. They've spent more than $5 billion on their ad campaigns in just the past three years.
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Turns out, tough economic times are great for insurance companies, which often base premiums on customers' credit scores. As a bad economy drags scores down, premiums go up. Instead of cutting rates, companies spend the extra money on advertising.
But, it's still car insurance. That makes the job tough for the ad guys.
"We live in a world of instant gratification, and frankly there's not a lot of instant gratification when you're selling insurance," explained Scott Rockwood, CEO of Richter7 advertising agency.
The campaigns tend to play on the unexpected. Where else have you seen two men in suits whose pants spontaneously start on fire, or a conversation between cavemen?
"You've got GEICO, Progressive; Allstate has jumped in with their mayhem campaign that's got this creative edge to it. So yeah, it's very competitive, and it seems to be working for people," Rockwood said.
Evidence that people are watching includes parodies of the characters popping up on YouTube — From GEICO's Maxwell the pig to Progressive's Flo. An ad executive for Allstate was quoted as saying the Mr. Mayhem Campaign was targeted at Flo.
"I actually think that the Mayhem character right now is the strongest out there," Rockwood said. "But I think that the (GEICO) lizard has obviously proved that he can endure the test of time."
