state farm - real talk

“When I need to file a claim, my agent guides me through the paperwork.”

“My agent helped me figure out what insurance I could realistically afford.”

“My parents wish they had my insurance now.”

“My agent wasn’t trying to sell me what I didn’t need.”

“Insurance does

not have to feel

like a foreign

language.”

www.statefarm.com/realtalk

Agency Red 186

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CAMPAIGN OVERVIEW

State Farm’s ChallengeTo develop a fully integrated marketing communications program, continue to change Young Adults’ perceptions of the State Farm brand, and move beyond the previous “Now What?” campaign into branded communication. Target: Independent Young Adults 18 – 25 Timing: May 2010 – May 2011 Budget: $40 million

Business Goals and Objectives Our overall goal is to gain State Farm’s fair share of the Young Adult market by changing the perception of State Farm among 18 – 25 year-olds, increasing consideration of the brand and purchase. Primary objective is to achieve growth

through: New Young Adult Auto policies

Secondary objectives include achieving growth through: New Young Adult Renters policies Retention of Legacy Young Adult Auto policies (those Young Adults from an existing State Farm household) Retention of current Independent Young Adult Auto and Renters customers Source: AAF Case Study

Red186 also developed more specific metrics for the campaign. New Customers ages 18 – 25 Write a minimum of 200,000 new auto policies and 100,000 new rental policies for 18 – 25 year-olds nationwide

BudgetStay significantly under the $40 million budget.

Through extensive research, Red186 found that, whether they know it or not, young adults need to be educated about insurance. Even simple insurance terms like “deductible” were unknown to many of those who participated in Red186 research. Young adults don’t want lectures. They are interested in being guided with insurance decisions. While parents are often the key source ofinformation for young adults, it is important to showcase the agent’s value in this role as well. Finally, it is important to know how the message should be framed to the target. The best way to reach young adults aged 18– 25 is to feature the customer-agent relationship through testimonials. What better way to convey this message than by utilizing the stories of satisfied young State Farm customers.

With these factors in mind, Red186 has developed a multifaceted branding campaign called “Real Talk.” This campaign stresses the honesty and accessibility of State Farm in regards to the target market. The opportunity that lies within the 18–25 year-old segment is substantial. The time is now and this is the plan.


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RESEARCH

The account planners at Red186 have “lived” the insurance business for nearly an entire academic year. Finding the right strategy for State Farm to reach adults 18 – 25 required knowledge of the insurance business and young adults. The agency relied heavily on existing research on adults 18 – 25. This group is part of the Millennial generation. Millennials respond to marketing very differently than past generations; but published data only tells part of the story. Red186 went directly to young adults with an innovative ethnographic research project called, “Test Your Insurance IQ.”

Secondary Research INSURANCE INDUSTRY TRENDSInsurance and risk management make up an immense global industry. According to a survey conducted by a leading global insurance firm, Swiss Re, worldwide insurance premiums totaled $4.270 trillion in 2008 (the latest data available), up about 6.3% from $4.061 trillion in 2007. This was equal to about 6.18% of the global GDP. Global life insurance premiums were $2.79 trillion during 2007, all other types totaled $1.78 trillion.

In America alone, the insurance business employed about 2.31 million people in 2008,

and insurance gross premiums totaled $1.13 trillion. This makes the U.S. the world’s largest insurance market. In 2009, life, accident (including supplemental health), and annuity premiums in the United States will total an estimated $679 billion. Property and casualty premiums will total about $450 billion for 2009. U.S. life insurance firms held about $4.51 trillion in assets in 2008, according to the Federal Reserve Bank. Approximately 4,500 companies underwrite insurance in America, but the industry is dominated by a handful of major players. These so-called major players consist of Progressive, Allstate, Geico, and AIG in addition to State Farm.

Premiums on a per capita basis remain very low in much of the world. This points to an excellent long-term opportunity for the sales expansion of insurance products of all types, including annuities. While it will take many years for underdeveloped nations to begin spending significant amounts on insurance products, much of the world is still clearly a fertile field for expansion.

Auto Insurer Market Share


3%4%4%6%

7%

8%

11%

12%18%

28%

State Farm NationwideAllState USAAProgressive Liberty MutualGeico AIGFarmers American Family

“My agent knows my

name. He has

to look up my

number.”

Graph shows major providers. Other equals 35%.Source: AAF Case Study

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Ongoing turmoil in the financial markets has resulted in a challenging environment for the U.S. insurance industry — a trend that is expected to continue at least through the end of the current year. Industry experts expect further consolidation in the industry. But there is great opportunity in targeting the Millennial generation for insurance products.

MILLENNIALSThe PEW Research Center completed an extensive study on the Millennial generation. Not surprisingly, PEW found that three-fourths of Millennials have created at least one profile on social networking websites such as Facebook, MySpace, and Twitter, and one in five have posted a video of themselves online. PEW stated “Millennials are more likely than older Americans to treat their cell phones as a necessary and important appendage. Many even bring their cell phones to bed.” Millennials do not view these devices as just pieces of technology, but instead as a lifeline for their social lives and a form of self-expression. Because of this, much of a Millennial’s time is spent on the Internet via their computers, cell phones, and iPods. State Farm will need to use these technologies to reach young adults with a message that is relevant to them. Millennials are a confident, open-minded, and tech savvy group, who are not very passionate when it comes to buying insurance. There are an estimated 33 million males and females ages 18 – 25 in the US. MRI currently shows State Farm having an index of 78

for this group. Red186 plans to reach those who are “independent” in this age group, defined as those that are “paying 50% or more of their living expenses.” Independent young consumers are cost-driven and shop around for insurance. Almost three times as many young adults who pay for their own insurance have switched insurance providers (32%), compared to those whose parents pay (12%).

The following are the likely places this group would seek advice when shopping for an insurance company: 87% Asking friends and family directly 84% Viewing products services and rates in company websites 80% Calling multiple insurance companies for rates and information 57% Visiting agents in person 55% Seeking advice from third-party consumer websites 55% Asking friends or work colleagues 48% Calling agents directly 42% Seeking third-party advice from consumer blogsSource: KRC Research, Inc.

Young adults also believe in sharing their experiences with others through blog entries. A research study done by KRC Research Inc. indicated that 70% had blogged at least one time about a customer service experience. Both Social Mention and Icerocket indicate that most consumers blogging about insurance asked for advice on choosing policies and companies. Icerocket’s results for car insurance show that in a 30-day period there are about 243 posts per day. This indicates that car insurance is something that is consistently searched and young adults are very conscious of purchasing a policy that aligns with their individual needs.

The KRC study also found that 65% of young adults surveyed perceived the insurance industry as having a poor public image and 53% perceived the

RESEARCH OBJECTIVES Evaluate the target audience and get a feel

for how much young adults know about insurance

To understand the genuine feelings toward

State Farm and State Farm Agents

Determine how State Farm can effectively

differentiate itself toward the young adult market


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insurance industry as not being innovative.

When asked what customer support insurance companies should adopt, the overwhelming response was to integrate the use of more technology: 89% Web-based support 86% Access full personal account 76% Live online chats 69% Company blogs 67% Instant messaging with agents 59% Mobile alertsSource: KRC Research, Inc.

Interestingly, when asked how they currently contact their insurance company and how they would prefer to contact them, the most common response was by phone, followed by email and in person.

State Farm conducted extensive research on the target market which culminated into the “Now What?” campaign in 2006. The purpose of the campaign was to reach out to young adults to engage them with State Farm. The research showed that young people were tech savvy and like having accurate information available both quickly and easily. Taking this research into consideration, Red186 determined that many young people overestimate their knowledge of what insurance means and how it works. The previous research concludes that the “Now What?” campaign was not successful because the target markets were not reached or thoroughly engaged. The strategy for the campaign was unique and backed

by research but, it may have been a concept too early for its time. Today’s technologies are much more advanced. It’s clear from the “Now What” campaign that young adults want to receive information about insurance, but they want this information when and where they want it. Red186 research documents that young adults in the target age group are heavily involved in social media. With the introduction of social media such as Facebook, Twitter, and MySpace, communication and support of these platforms have increased dramatically.

MULTICULTURAL MILLENNIALSMillennials are a diverse generation. The U.S. Census indicates that Hispanics make up 18% of the young adult demographic as this graph shows.

This diversity offers State Farm the opportunity to engage a large percentage of young adults by marketing to Hispanics. A report by Scarborough Research indicates that Hispanic Millennials are “211% more likely to download content from the internet than the general population and over 60% are online. ”Digital content includes music, TV programs, podcasts, and video games. Focusing on mobile marketing is also an important part of reaching young Hispanic adults. “Hispanics are more likely than other cellular users to utilize many cellular features, including Internet access and email.” Since they have such a high rate of Internet and

U.S. Multicultural Yound Adults by Percentages (18-25)

“Insurance doesn’t

have to feel like a

foreign language.”


0%

14%

28%

42%

56%

70%63%

18% 15%4%

Other Hispanic African American

Asian American

Source: U.S. Census

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“I don’t worry aboutbeing taken

advantage of.”

05

cellular phone usage to obtain their content, State Farm would best reach this market by focusing on their downloading habits.

A study released by IMAGES USA and The Futures Company states that Hispanic Millennials (87%) are looking for companies who are making a sincere effort to be a part of the Hispanic community. Unfortunately, most hold the belief that “very few brands and companies genuinely care about the state of my community.” State Farm has a tremendous opportunity to show their involvement in Hispanic communities with the right plan.

English is their primary mode of communication. According to the Pew Hispanic Center “88% of second generation Hispanics and 94% of third generation Hispanics are fluent in English.” These second and third generation Hispanics do not desire to be a “market segment,” but instead view themselves as a part of the total population. However, State Farm can effectively reach Hispanic Millennials with the right creative approach.

Primary Research OverviewTEST YOUR INSURANCE IQThe account planning team at Red186 knew that research could provide the

information needed to develop the right IMC plan for State Farm, but the real challenge was which methods to use. Guidelines from AAF stipulated that State Farm did not want student research efforts to be confused with actual State Farm work. So, the team developed a comprehensive ethnographic and quantitative research project called “Test Your Insurance IQ” to meet the following objectives.

Primary Research ObjectivesGAUGE TARGET’S KNOWLEDGEOF INSURANCEThe first goal in Red186’s research was to find out how many of those in the 18 – 25 age range knew about insurance. Red186 did not necessarily aim to find out what they know about State Farm specifically, but to find out their general level of knowledge about the parts that make up the total concept of insurance: deductibles, types of insurance, and information needed after an auto accident. This knowledge will be helpful in deciding how to present information about State Farm to the target in a relevant way.

UNCOVER TARGET’S ATTITUDES/ PERCEPTIONS OF INSURANCERed186 thought it was important to find out what those in the target market think about insurance. For

example, what opinions do 18 – 25 year-olds have about insurance and insurance companies? In order to affect change in these perceptions that will position State Farm advantageously, it is important to know what the perceptions are to begin with.

UNCOVER TARGET’S ATTITUDES/PERCEPTIONS OF STATE FARMLast, Red186 sought to find out what attitudes the target market holds specifically pertaining to State Farm. How does the target market perceive State Farm when it comes to the factors that help them choose insurance? Do they think State Farm is reliable? Overly corporate? Expensive?


Once again, it will be important to understand current perceptions before seeking to change those perceptions in ways that can benefit State Farm.

Primary ResearchFIRST ONLINE SURVEY

In November 2009, the account planning team launched an online survey to help develop a baseline about State Farm and the young adult market.

87.1%, or 54 of the respondents to the first survey, were 18 – 25 years old. A total of 67% of all our respondents were female, and 96.8% have some form of higher education.

KEY CONSUMER INSIGHTS FROM FIRST ONLINE SURVEY

The account planning team found that 53% of respondents chose their current insurance provider based on a parent or older family member’s recommendation. When asked about special considerations they make as consumers when choosing their insurance provider, many gave the response of, “I’ve never made this decision.”

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32.3% of the sample were State Farm customers.

51.2% of the sample is paying more than half of their living expenses.

57% of all respondents

generally perceived State

Farm to be an “above

average” or an “excellent”

company.

Please rate each of the following in importance to you when making a deci-sion about auto insurance. 5 equals most important.


0

0.9

1.8

2.7

3.6

4.5 4.53.9 3.8 3.7

Price Special Student Discounts

Typesof Coverage

Offered

Having a

Local Agent

HERE’S WHAT THE SAMPLE CONSIDERS IMPORTANT WHEN MAKING DECISIONS ABOUT INSURANCE:

Source: RED186

“I don’t run to

mom and dad

anymore when I

need help. I call

my agent.”

64.5% of the sample thought that State Farm was priced “average” when compared to other insurance companies.

0%

14%

28%

42%

56%

70%

1%

11%

64%

9% 3%

Very LowAverage

Somewhat Below Average

Somewhat Above

Average

Very High

Source: RED186

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30% of the sample did not know that State Farm had local agents

who would help them in making an insurance buying decision.

Based on what you know right now, would you say that State Farm Auto Insurance is priced...

Are you aware that State Farm has dedicated reps in your area to answer insurance questions and assist you in making an insurance decision?


0%

14%

28%

42%

56%

70%64%

6%

YesNo

N/A

30%

“I hit a deer in myHyundai. My agentanswered the phonewhile I was still sittingin the car.”

Source: RED186

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TEST YOUR INSURANCE IQ

PERSONAL INTERCEPTS

Agency researchers approached WKU students at the student center on February 9th and 12th, 2010. Students were asked a few questions to “test” their knowledge of insurance. Students were then asked inside the “story booth” to share their insurance stories, which were videotaped. The questions are as follows:

Who is your insurance provider?This question elicited a wide range of responses. What really stands out, however, is the fact that nearly a quarter of respondents didn’t know their insurance provider. While some of the sample aren’t likely to fall into the “independent” classification presently, there is no doubt that they will soon be making insurance decisions.

Why did you choose this insurance provider?An overwhelming majority of respondents reported that they either were still under their parents insurance or that they chose their insurance provider based on input from their parents. State Farm’s strength among the older demographics should bode well for the ability to sell insurance to these young adults.

What is your most frequent form of communication with your insurance provider?

The majority of respondents most often communicated with their insurance provider via telephone. Phone communication lends intimacy while also fitting into the fast-paced schedules of young adults. This is also a strength of State Farm. While other providers allow telephone communication, most force a person to talk to a faceless operator. Emphasizing the constancy and availability of the State Farm agent should display a clear benefit of State Farm over other providers for the target market.

What is your most preferred form of communication with your insurance provider?While an in-person meeting might not always be convenient, this question unveiled the fact that many young adults would still like to be able to talk face-to-face about insurance. The vast majority preferred to speak either in person or over the phone. Online communication was preferred by less than a quarter of respondents. Once again, this data represents a strength for State Farm over other insurance providers.

For those who have had an auto experience, how was it?About half of the respondents who had interaction with their insurance provider claimed that the experience was positive. The challenge will be to show our target market that State Farm will

provide a consistently positive and helpful experience to them.

What makes an insurance provider credible?Customer service, reliability, and coverage were the most frequently cited indicators of an insurance provider’s credibility. The presence of an agent addresses both customer service and reliability, the two most commonly cited factors in projecting credibility. Coverage is determined on a case-by-case basis, so it shouldn’t be hard to present State Farm as a preferable provider for the target.


“I wanted to make sure I had the coverage I needed, notcoverage I

would never use.”

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What matters most in buying insurance?Unsurprisingly, young adults weigh price heavily into their insurance decisions. If a campaign presents State Farm as an insurance provider which can cover young adults at a competitive rate, State Farm’s customer service and reliability will undoubtedly make it an attractive insurance option.

Do you know what the terms deductible and comprehensive mean?This data reveals that the target audience in general has very little knowledge about insurance. Even basic insurance questions were proven to be outside the knowledge base of many young adults surveyed. This is why it is important to speak to young adults from a position of authority on the subject. Young adults don’t want lectures, but it is important to let them know that State Farm, and specifically the State Farm agent, has the knowledge to guide them through their insurance interactions.

KEY CONSUMER INSIGHTSThe key consumer insight from the “Test Your Insurance IQ” personal intercepts is that young adults don’t know much about insurance and they have trusted their parents to make the decision. Now, as they become independent, young adults need help from someone who cares to guide their insurance decisions.

TEST YOUR INSURANCE IQ ONLINE SURVEY

The lack of insurance knowledge by young adults was a surprising finding from the videotaped personal interviews. The account planning team decided to conduct a second online survey to validate the information. Over 100 young adults from 15 states completed the second online survey themed “Test your Insurance IQ.”

From the respondents who took the survey, 87% were 18 – 25 and 64% were female. The majority of respondents have some level of college education. 33% have a college degree and 59% are currently enrolled. Respondents are mobile; only one respondent did not have a cell phone. They are becoming independent as half of the sample is currently paying for their living

expenses. 34.3% of this sample are State Farm customers.

Another question asked on the second online survey was what information a person should get if they are involved in an auto accident. The majority of respondents knew to get the police report and insurance information. However, few knew to get telephone numbers or pictures. Also, not one of the respondents mentioned anything about getting contact information from possible witnesses or taking their own notes on the accident. These are very


“My agent

understands

my situation

better than I do.”

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Here’s what some of the participants in the online survey had to say about their accident:

Have you ever been in a car accident? If yes, what was that experience like? “I am not sure how my insurance took care of the wreck, my dad handles all of that.” “Progressive was the insurance of the guy I got hit by. They were very slow and not very polite about getting me the money I was supposed to get from the accident. I had just turned 18 when I got hit, so my dad did most of the dealing with the agents. We had Geico at the time. We have State Farm now because Geico wasn’t very helpful with us.” “Yes, it sucked. They did the bare minimum. They took forever to get back to us. Nationwide Insurance blows and they are not on your side.”

Please rate each of the following in importance to you when making a decision about auto insurance. 7 equals most important.


1.00

1.94

2.88

3.82

4.76

5.70 5 5

Best RatesAccesibility

CustomerService

Parents’Recomm.

Well-KnownCompany

5.65.7 5.7

KEY CONSUMER INSIGHTS

The participants in the “Test Your Insurance” research project also shared the frustrating circumstances that came into play when their agent was of no help, or when they weren’t able to reach a “real agent” at all. Most of the participants were scared and nervous at the time of their accidents. They need someone to point them in the right direction, to be there when they are needed, and to give quality service. Research conducted by Red186 supports the idea that State Farm agents are the key to increasing sales of auto policies to young consumers. State Farm agents are, in fact, your key differentiating factor in the marketplace. The challenge for Red186 is to develop a communication strategy that makes the State Farm agent the “star.”

important pieces of information to obtain.

11

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SF Logo - Rotated,with white cutout

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Style Guide

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THEME/STYLEA unique stylistic aproach needed to be created to effectively communicate to young adults. The 18 – 25 year-old age group is a diverse market at different stages of life. This is why the creative team chose to juxtapose clean photog-raphy and typography with a hand drawn, cut-out look. The designers also utilized a grunge element to add an urban feel.

The State Farm logo was altered in an effort to deliver State Farm’s message and keep in style with the overall look. Dropping the box around

the circular insurance coverage options was a simple improvement that reintroduces State Farm into a more contemporary market.

Fonts were chosen to reflect the same emer-gence into a modern market but keep an up-beat and youthful urban style. Museo 700 and Futura Medium were the two fonts that fit best with the overall theme.

REAL TALK VS. FOLLOW METhe creative team wanted to use a word or phrase that motivated young adults to take

insurance seriously and make their opinions known. The final two choices came down to “Follow Me” and “Real Talk.” The phrase “Follow Me” was meant to be an invitation to a service based on guidance. “Real Talk” was there to allow the target market to get the real questions and opinions about insurance out in the open. A copy test with young adults ruled that “Real Talk” was the better approach. The creative team decided that “Real Talk” sounded more professional and gave the consumer a choice while carrying an urban sound to mesh with the campaign style.

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Style Guide

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WHITEBLACKPMS

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SF Logo - Straight

Hand-drawn black &

white layered cutouts

SF Logo - Rotated,

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RealTalk Logo -

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SF Logo - Straight





Style Guide





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SF Logo - Straight





Style Guide





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MAGAZINES AND POSTERSPrint ads are designed to highlight real State Farm customers sharing their real insurance stories. These ads show upbeat young adults holding signs that push the “Real Talk” stories that will become the focal point of the campaign. The eye catching and easily read ads will be a catalyst for young adults to have a “Real Talk” with their State Farm Agent.

INTERACTIVEThe interactive portion was designed to keep up in the daily lives of young adults through the digital platforms commonly used such as search engines, social net-working sites, viral videos, and smart phone applica-tions.

Online advertising on major search engines such as Google and Yahoo will keep an already digital savvy consumer reminded of the service they may need. Social networking sites like Facebook and Twitter are frequently visited and offer the user the ability to en-gage in conversations with ease. Smart phone apps are an innovative way to evolve with the market and allow convenience in receiving important information.

Sports Sponsorships Arena Sports Sponsorship

Real Talk Blog

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The IMC campaign proposed by Red186 is organized into 3 stages. The “pre-campaign stage” will utilize social media extensively to build campaign “buzz.” The primary markets in the pre-campaign stage are news media, industry publications, and State Farm agents. The “launch stage” is the IMC plan in full gear. Traditional and digital media will encourage consumers to be a part of the Real Talk campaign. The “post-campaign stage” wraps things up with a press conference, employee awards, and a final analysis of results.

Pre-Campaign StageThe pre-campaign stage will employ strategies that will create agent, news media, and consumer awareness before the launch of th Real Talk Campaign. The pre-campaign phase will begin in May and last 3 weeks. Tactics such as press releases and agent incentive programs will be used to generate “buzz” about the campaign. Information will be sent to State Farm agents to describe the Real Talk Campaign.

SOCIAL MEDIA NEWSROOMRed186 will launch an online social media newsroom to spur interest in the Real Talk campaign. The Social Media Newsroom template was originally developed by Shift Communications and provides information

about the campaign in a blog-style format. The online newsroom will contain RSS Feeds that give news media and bloggers information such as upcoming visits from the State Farm Real Talk Bus Tour as well as access to digital videos, news, and events. The development of a social media newsroom is an efficient way to reach people interested in State Farm. Cost: $100,000 (Social Media Managers and Web Development)

INTERNAL COMMUNICATION TO ALL STATE FARM EMPLOYEESRed186 recommends sending a mailing to all 17,700 agents outlining the Real Talk campaign including a link to the social media newsroom and the Real Talk campaign website. The agency recommends that all internal State Farm communications, such as newsletters, feature articles and updates about Real Talk.Cost: Internal REAL TALK AGENT INCENTIVE PROGRAM An incentive program is a great way to actively engage State Farm agents with young adults. Red186 has carefully developed a rewards method to keep agents motivated and eager to increase sales to young adults. A travel rewards incentive program was chosen because

in a 2005 study conducted by the Center for Concept Development, 51% of respondents perceived that travel is remembered longer than other incentive rewards. Red186 believes that the effort of agents to sell to this demographic will continue to increase as the agents perceivemselves progressing towards the travel reward.


“My agent

helped me figure

out what I could

realistically afford.”

CAMPAIGN

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The incentive program consists of three award levels. The agency also recommends a special microsite focused on just the incentive program.

1ST PLACE GRAND PRIZE

An all-inclusive trip to Costa Rica.Cost: $10,000

2ND PLACE PRIZE

A paid four-day, five-night hotel stay at a Marriot chain hotel anywhere in the continental U.S. (package valued at $5,000, excess funds are deemed as spending money).Cost: $5,000 3RD PLACE PRIZE

Compensation-Agent may receive up to $2,000 or 2% of their total sales.Cost: $2,000

Total Cost For Real Talk Agent Awards: $17,000

PROMOTIONAL MAILING TO STATE FARM “SCRATCH AGENTS”While all 17,700 State Farm agents will receive campaign information, particular emphasis will be directed toward State Farm “scratch agents.” Red186 believes that agents who are building their State Farm business will want to be involved in reaching the 18 – 25 target market. Mailings will contain campaign information as well as a schedule of the bus tour and the opportunities each scratch agent has to participate in the campaign.

The agents’ role in the campaign will be to reach more young adults ages 18 – 25, be a reliable source of guidance to this group and of course to sell more insurance to this demographic. The agents should understand that this campaign is a great opportunity for them to grow their business and win great prizes! The prizes are highlighted by a specially designed promotional kit to be sent out to “scratch agents”. This care package looks as if it came straight from the Caribbean and is filled with elements of a tropical excursion. The kit contains items, such as sunscreen lotion, tanning oils, two coconut cups with umbrellas and a custom State Farm towel. Guides for adventure activities like zip lining through the rain forest, riding horses along the beachfront or hiking up active volcanoes complete the intrigue of the care package. An amped-up version of the campaign low-down accompanies the packages. These full-color booklets contain aspects of the campaign an agent can touch and feel, such as a full color dissection of the tour bus and map of its destinations. The booklet gives an agent a better idea of what this campaign is capable of and prepares them to act.Cost: $100,417 (Booklets included in care package $1,115.00, postage is $24,500) Source for booklet price:http://www.psprint.com/booklets Total Cost of Pre-Campaign Stage: $217,417.00


“My agent was not

trying to sell

me what I

didn’t need.”

Agent Incentive Kit

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Launch StageLAUNCH STRATEGIESState Farm is currently under-represented in the young adults insurance market. To successfully establish a foundation for long-term growth of those aged 18 – 25, Red 186 has prepared a comprehensive integrated marketing communications campaign. The campaign will blend traditional media with interactive media encompassing mobile, digital, and social media. The “Real Talk” message will be communicated through a variety of key media, such as national television, magazines, outside-of-home advertising, a website, viral videos, a traveling bus tour and through personal one-on-one contact with State Farm college representatives.

NATIONAL COMMUNICATION OBJECTIVES Reach 80% of 18 – 25 through national advertising to encourage young adults to “Test Their Insurance IQ” and share their State Farm stories online or at special bus event venues. Target a frequency of 7+ exposures in measured media Build additional exposure through nationally using digital media Meet the campaign timeline and deliver the work under budget

TARGETED COMMUNICATION OBJECTIVES Target the 100 largest colleges and

universities to directly engage 2.8 million students Promote State Farm and their agents on college campuses and surrounding communities Emphasize the personal guidance State Farm agents provide through real insurance stories Engage 10 million college students at major sporting events with the State Farm Real Talk Bus Tour

NATIONAL COMMUNICATION STRATEGIESREAL TALK WEBSITE

The website’s online presence is a central component of the campaign. To successfully reach this tech-savvy demographic, the campaign must resonate with them. The site will incorporate heavy use of social media to allow open communication between 18 – 25 year-olds. The site will serve as a platform for users to generate personal content that they can share. The storytelling aspect of our campaign will extend into this digital space. The site will contain a running blog as well as the option to upload videos and pictures. This blog is a way for our demographic to connect with others in their age group, ask questions about insurance and share their personal stories.

State Farm school representatives and agents will monitor the website and respond to questions and comments in order to create a real connection between the target

market and State Farm. There will be a page highlighting the nationwide bus tour with listings of upcoming events. To increase the level of interactivity there will be games on the site as well as a way to test knowledge of insurance with a “What’s Your Insurance IQ” quiz.Cost: $4,657Cost Breakdown:Domain Name: $35 per yearServer: $25 per monthWeb Site Design: $4,500 ($375 per page; $375 x 12 pages)Maintenance: $97


“I called State

Farm and

someone picked

up the phone. It

was such a

relief after

calling the other

companies.”

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NATIONAL TELEVISION

Red186 recommends that Real Talk network commercials be strategically placed in shows targeting young adults beginning September 2010 and ending in November 2010. The agency has chosen to begin commercial advertising in the Fall because this season has the highest audience ratings of the year. Red186 will purchase 30-second advertisements airing before and after shows primarily watched by young adults.

In the past three years, the number of homes where Spanish is the dominant language has grown by about 19 percent to more than 5 million, nearly half of the total Latino TV households, according toNielsen Media Research. Because the explosive growth of the Latin American immigrant population in the United States has fueled the proliferation of Spanish-language media, Red186 recommends that commercials be broadcast in Spanish where appropriate. Sampling include Grey’s Anatomy at $240,462 per 30-second spot,

Family Guy at $214,750 per 30-second spot, The Office at $191,236 per 30-second spot, and shows on Telemundo. The total cost of one spot for three shows is ($646,448 x 3 months =$7,757,576.) State Farm’s

television presence will not be limited to these shows. State Farm is already well known for sponsoring sports such as college basketball. The agency also recommends rotating Real Talk testimonials into State Farm’s present network, cable, and sports buys.Projected Cost: $7,750,000

MAGAZINES

The primary objective of magazine advertising is to showcase State Farm agents through customer testimonials to drive web

traffic. One-page, full-color ads will be used. Red186 recommends placing ads in magazines with high young adult readership. According to MediaMark Research, Sports Illustrated has an audience of 82% males to 18% females, which provides a strong male audience. People Magazine has an audience of 60% females and 40% males, providing a nearly equal gender split.

Magazine ad placement will be staggered to reach as many young adults as possible. According to U.S. Census data, there are

more Hispanics living in the United States (50 million) than the entire population of Canada at 32.5 million. Red186 will target this ever-increasing market by advertising in magazines such as, People en Español, Latina, TV y Novelas, Hispanic Business, and Ser Padres.

People, People en Español, Sports Illustrated, Cosmopolitan, Latina and Entertainment Weekly will be scheduled in August, while Men’s Health, TV y Novelas, Hispanic Business, Ser Padres and Maxim are scheduled for September. A flighting pattern continues for the next 9 months. Because People and Sports Illustrated are published weekly, advertisements will be Michelle Park,

Lexington, KY

My insurance company

doesnʼt have a cute creature

or wacky representative, but

it does have real people.

When I need help, I know

someone who knows me will

answer the phone.

“

“


talk.real


I chose State Farm because of their many years of experience, and their great customer service.They were the smart choice.

“

“

José Garcia,El Paso, TX


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place during the first and third weeks of select months. Projected Cost: $3,250,000

STATE FARM REAL TALK BUS TOUR

The national State Farm “Real Talk Bus Tour” will be a high-energy and high-interaction promotional event. This tour will offer the target market with a new and innovative form of involvement with State Farm. The tour’s objective is to promote State Farm to young adults by showcasing real customers sharing their personal insurance experiences. With the Real Talk Bus Tour, Red186 plans to create a movement that will engage young adults. This personal response and involvement with the campaign will contribute not only to how State Farm will be positioned in the mind of the target market, but will encourage the sharing of personal stories from current State Farm policyholders.

The tour will consist of 6 buses that will travel nationwide to concerts, major sporting events, and high-traffic shopping centers during summer months. Once the semester starts in fall 2010, the buses will also visit the top 100 colleges and universities in the U.S., attending high-populated campuses and local events. These events will also include concerts,

sporting events, and other campus or community activities.

Along with the bus tour, the buses will travel to key Spring Break destinations including Panama City Beach, Miami, North American Ski Resorts and Daytona Beach. The idea is to be in front of young adults because State Farm is always there for them.

Agents will hand out promotional items such as koosies, t-shirts, flashlight key chains, beach balls, hot chocolate for

ski resorts, etc. and interact with the demographic on the beach or in the snow in their environment.

The buses will include two large LCD screens attached to both sides of the bus, two freestanding small LCD screens, two Wii multiplayer gaming consoles, and an internal story booth. The large screens will serve as the interface for the Wii gaming and the freestanding screens will display the State Farm commercials. The Wii will promote personal interaction among

individuals and create a high-energy feel. The story booth will be located inside the bus and record the personal insurance experience stories of State Farm Customers. There will be a prompt within the booth that tells the individual to start by saying “Dear (name of State Farm agent)” and then follow with their story. This way the videos promote the State Farm agent and the stories showcase the involvement and guidance of the State Farm agent in their time of need.

At each location, local State Farm agents will be encouraged to attend and participate in the interaction of the Real Talk Bus Tour. Agents will be provided with give-aways such as koosies, t-shirts,

flashlight key chains, etc. to hand out to participating individuals. The agents will be there to answer questions and attend to the needs of the target market. This will also help to reinforce the comfort and assurance that the State Farm agents provide.

During the summer months Red186 recommends Bonnaroo as one of the concert venues, for the Real Talk Bus Tour to attend. Bonnaroo is a


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four-day music and arts festival that takes place in Manchester, Tennessee. For the 2010 festival, there are already more than 40 artists and bands that have committed to the festival, with some big names like Kings of Leon, Dave Matthews Band, Jay-Z, Weezer, The Flamming Lips, and Norah Jones. For its peaceful vibe, near-flawless logistics and unrivaled entertainment options, Rolling Stone magazine names this revolutionary entertainment experience one of the 50 moments that has changed the history of rock and roll. This event is a perfect way to

reach a large portion of our target market. The Real Talk Bus Tour will attend Bonnaroo and supply 3 buses at this venue. Agents in the surrounding areas will be encouraged to participate. They will not only have give-aways, but will distribute water, fruit and hand-held fans that display the State Farm logo.Cost Total: $4,941,899

Cost Breakdown:Bus Rental: $3,942,000Wii: $4,800

Koozies: 2000 per bus $0.50 x 12,000= $6,000Key Chains: 1,000 per bus $0.99 x 6,000= $5,999.00Water Bottles: $100 for customized label $0.75 per bottle X 18,000= $13,500Beach Balls: 500 per bus $1.00 x 3,000= $3000T-Shirts: 18,000 per bus $4.75 x 108,000= $513,000Gas: 5,200 miles per year x $3.00 per gallon x 6 buses= $93,600Driver: $60,000 per year x 6 drivers: $360,000


Festival Tent

Inside View of Bus

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“TEST GOOD NEIGHBOR PROMOTION”

Red186 recommends the test of the Good Neighbor Promotion, which provides a discount on insurance for community involvement. This discount is founded on the idea that individuals can receive a discount on their insurance if they actively participate in a program or cause that State Farm endorses. This is a great way to promote State Farm’s involvement and concern of global and local issues. Red186 has selected two causes that State Farm currently supports and has developed these into incentives for State Farm policyholders to receive a discount. The two causes are Habitat for Humanity and Green Initiatives. Individuals will have the option of choosing between the two to receive their discount. Note that this is only a “test” option limited to a region determined by State Farm.Estimated cost of test: $250,000

ONLINE DISPLAY ADS

Red186 plans to create several versions of interactive banner ads to support the Real Talk campaign. Online ads will feature the “Test your Insurance IQ” quiz, which links to the Real Talk Website and social media outlets. The agency plans to produce other interactive online ads that feature a sudden car crash or an unexpected hailstorm, after which a young adult appears on screen. The text will say, “Click here to view my story” or “See how my agent helped me.” Clicking on the advertisement takes the audience to the State Farm YouTube channel where they can view several stories by young adults.

The agency will feature a variety of genders

and ethnicities in all ads and on the Real Talk YouTube channel. This will help people connect with someone with a similar background and more like themselves. Display ads will be purchased on websites popular with young adults, including Digg, YouTube, Facebook, and Hulu. Projected Cost: $550,000

KEYWORD SEARCH AND MOBILE ADS

Google AdWords and Yahoo! keyword search operates on cost per click, as does the mobile keyword search. Ads will be placed when consumers type in keywords that relate to our campaign. These two search engines were chosen based on having the first and second highest ranking.

The keywords we plan to use on Google and Yahoo! are: real talk, real talk State Farm, State Farm, what is a deductible, insurance providers, reliable insurance, what is insurance, State Farm agents, cheap insurance, what is auto insurance, insurance IQ, quality insurance, insurance, and real talk campaign. Red 186 considers these key phrases important to young adults by targeting their curiosity and concerns about insurance.

Using keyword search online and via mobile allows the agency to increase our awareness and reach for the Real Talk Campaign. Red186 will set a daily budget and a target cost for each click on banner ads as well as monitoring all web traffic. Red186 believes online and mobile search ads are a great way to advertise the Real Talk campaign given affordable pricing and complete


Real Talk Banner Ad

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tracking capabilities.

It is recommended to use the cost per click method of payment. State Farm will only pay when their advertisement is clicked. Each click costs the company 90¢ and you must have a minimum daily budget of $200. Cost: $73,000 ($200 budget x 365 days)

VIRAL VIDEOS

Viral videos will play a critical part in communicating the Real Talk message as well as being the foundation of the campaign. These videos consist of personal insurance stories and testimonies from young State Farm customers. In these videos individuals can express any type of emotion, idea or opinion about their insurance experience. They will then have the opportunity to upload their personal generated content to the website and YouTube channel. Personal insurance experiences will also be documented on the Real Talk Bus Tour and story booths, which will then be used to develop campaign commercials. These commercials will showcase the individual stories and promote the Real Talk message. The viral video commercials will run on national television, the Internet and on campus kiosks. Cost: $14,880 (based on hourly wage of $60 x 248 days of Facebook maintenance)

YOUTUBE CHANNEL

YouTube is the leading online video broadcaster, allowing visitors to easily upload and share video clips across the Internet. In 2009, YouTube surpassed 100 million viewers for the first time. The State Farm channel on YouTube will contain the Real Talk

Campaign commercials, viral videos and campaign video updates from the bus tour.Cost: $9,920 (based on hourly wage of $40 X 248 hours)

ONLINE GAMES

Red186 will target Facebook with an online gaming application. This application will be an extension of, “Test Your Insurance IQ”. The quiz-based game will feature numerous questions quizzing the player on what they know about insurance. The app will give quiz results as well as a leader board. The leader board will allow two features so the player can see how they compared to their friends and how they stacked up against the rest of Facebook users. On completion of each quiz, each answer will be explained and why it is important to know when searching for an insurance provider. The application

YouTube Channel


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will also have clickable links to State Farm’s website and YouTube channel.Cost: $65,000

UPDATED SMART PHONE APPLICATIONS

There is an overwhelming acceptance and use of mobile applications in the young adult demographic. This is why Red186 recommends that State Farm make a limited version of their current iPhone application available for the general public. These phones would include the Apple iPhone, BlackBerry, Motorola Droid, HTC Droid Eris, Palm Pre and Samsung Moment. Allowing public access to this modified application will position State Farm as a dependable and progressive company in the minds of our target market. Red186 also recommends the development of a mobile app for renters to take pictures and record serial numbers of valuables. Red186 suggests that State Farm provide one year of free server space to host the rental mobile application date for customers. This means that, should personal property loss occur to a State Farm renter policy holder, their information is secured on a server rather than the actual phone used to collect pictures and serial numbers.Cost: $75,000

TWITTER & FACEBOOK POSTING

Twitter is a social networking and micro-blogging service that allows users to post their latest updates through SMS, instant messaging, email and third party applications. Users can become “friends” with one another, or simply “follow” users’ updates. Users may receive updates through text messages, RSS or third

party applications. The Real Talk Campaign Twitter page will provide instant, real time access to the latest campaign and State Farm updates. According to Anderson Analytics Research Facebook, among college students, is becoming more than just a social networking site. Facebook is becoming a new mass medium. The State Farm “Real Talk” Facebook profile will feature campaign publications, informative State Farm insurance information, and ways for consumers to upload personal content and provide feedback.Cost: $7,440 (based on hourly wage of $30 x 248 days of Twitter and Facebook maintenance)

Twitter page

Smart Phone Applications


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Targeted Communication StrategiesSTATE FARM COLLEGE REPRESENTATIVEThe State Farm College Representative will be an internship position offered to one student at each of the top 100 largest colleges and universities in the United States. This internship will be awarded to the student who displays drive, self-motivation, and a desire to work for State Farm. Through a written essay, school performance, and interviews the candidates will be chosen from each school. The internship would offer a $4,500 annual scholarship for books and a performance-based stipend, maximum of $500, at the conclusion of the internship. The internship would require the student to attend the State Farm Bus Tour and other local State Farm promotional events. The intern would also coordinate campus seminars to promote State Farm Insurance. At the end of the internship the student has the opportunity to come on board with State Farm and would receive a sign-on bonus. Cost: $550,000 ($4,500 = 1,000 stipend for 100 reps)

CAMPUS STORY BOOTHS

The State Farm College representative will be provided one story booth. The booth will resemble a Polaroid booth and give individuals the opportunity to share their insurance stories throughout the year. Just like the Real Talk Bus, the story booth will include a camera to record students’ stories and a prompt to provide instructions.

Individuals who participate in the story booths will be given the option to upload their videos to the website, YouTube channel and other social media sites. These booths will also appear at campus sporting events and a local student will be given the chance to share his or her insurance experience accompanied by a local agent. The video will then be moderately edited to include the campaign logo and graphics. The video will appear like a 45 second commercial on sporting screens during halftime. Cost: $849,500Cost Breakdown: $8,495 per booth x 1,000 booths= $849,500

REAL TALK CAMPUS BUS TOUR

Kentucky Derby - May 1Bonnaroo - June 10 –13 NBA Final- TBA NHL Final- TBA Vans Warped Tour- Ventura,CA- June 27HullabaLOU - July 23 –25NY Yankees v. Boston Red Sox - August 6 –9Santa Monica Pier - August 20 –22The Campus Tour Begins - August 23The Campus Tour consists of the top 100 universities by population.

CAMPUS TRANSIT SHELTERS

Red186 recommends purchasing advertising on campus transit shelters to promote the Real Talk message, advertise the Real Talk Bus Tour, and direct traffic to the website. Large, eye-catching posters will be displayed from August 2010 to May 2011, coordinating with


Campus Story Booth

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the academic year. Emc Outdoor will provide the ad displays, which will be 4 four feet wide by 6 feet high. The advertising will use large exterior display areas that are illuminated at night. These will be placed on the campuses of the 100 largest colleges and universities. Projected Cost: $225,000

CINEMA ADVERTISING

Advertisements will be purchased before feature movies in theaters at or near each of the 100 largest colleges and universities. The ads will target young adults as well as the general public. A 15-second, four-color, full-page static ad will be shown every 4.5 minutes before a feature presentation four times per week. Theater ads will launch July and August, October and November, January and February, and April and May. This flighting pattern will reach the target market at the most opportune movie-going times coordinated with the beginning of the academic semester and holiday breaks.(http://www.screenvision.com/s/about/news_press/nielson_cinema/)Projected Cost: $300,000

WALLSCAPES

This form of outdoor advertising will be employed at Ohio State University, Arizona State University, University of Florida, New York University, University of Texas at Austin, University of California-Berkeley, University of Kansas, North Carolina State University at Raleigh, University of Iowa, and University of Colorado at Boulder. Wallscapes offer large-scale exposure and high visibility to vehicular and pedestrian traffic. These elaborate displays are situated on the sides of existing buildings on high-traffic surface streets and roadways. With their


Campus Transit Shelter

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size, wallscapes command major attention, have huge impact, and are highly effective. Marketing Ad Ventures will supply this service. See www.adsoutdoor.com. Cost: $100,000 Cost Breakdown: $5,000 per Wallscape x 2 Wallscapes per 10 Universities= $100,000

WILD POSTINGS

Red186 proposes that State Farm use a form of guerilla marketing from Alt Terrain called Wild Postings. These Wild Postings can take on a variety of forms, but Red186 has chosen “Rip Away” Wild Postings. The “Rip Away” posters are weatherproof poster media that allow and encourage consumers to remove a single poster from a pad of 10 to decorate apartments, dorms, homes, and/or office areas. “Rip Away” Wild Postings are a high consumer involvement media that will encourage consumer interaction with the Real Talk campaign and will be placed on the campuses of the 100 largest colleges and universities. See altterrain.com. Cost: $160,080 Cost Breakdown $800.40 per posting2 postings x 100 largest campuses= $160,080Total Cost of Launch Stage: $19,191,256


Wallscapes

Wild Postings

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Post-Campaign StageJune 2011 will be devoted to post-campaign efforts. The primary goals for this stage of the plan are to utilize internal and external public relations to further promote State Farm and to evaluate all aspects of the campaign.

Annual State Farm ConferenceAwards will be given to “Real Talk” sales superstars during State Farm’s annual conference. Agents will receive recognition, compensation for goals met, and incentives earned. The award conference will be held at the State Farm headquarters in Bloomington, Illinois in May 2011. State Farm’s annual conference will be a great way to showcase the results of the campaign and to recognize winning agents. Winners from the conference will be showcased in a special publication distributed at the conference and mailed to all State Farm employees as well as a microsite about the incentive program.Cost: $65,000

A National Press ConferenceA national press conference will be broadcast live via satellite news feeds and online in the same venue as the award conference. The press conference serves as a way to inform the public and news media of campaign results. Benchmark research developed during the stage of the pre-campaign will be compared to our post-campaign studies to evaluate the success of the campiagn. The press conference audience will include members of the State Farm

corporation, news media outlets, and will be also accessible online via satellite.Cost: $125,500

Tracking and Pre and Post TestingRed186 plans to track campaign results during all phases of the plan, in real-time, using an online “dashboard.” The agency also recommends follow-up research on a national level with special emphasis directed toward the 100 largest colleges and universities in the United States. The purpose of the research will be to determine specific results in the areas of: new policies sold to 18 – 25, social media activities, online posts, submitted videos, budget, participation in the Good Neighbor promotion, number of contacts during the bus tour and the participation of State Farm agents in the incentive program.Cost: $155,000

Total Cost of Post-Campaign Stage $345,000

Post Campaign

“I called State Farm and

someone picked up the phone. It

was such arelief after

calling the other companies.”


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Real Talk Campaign FlowchartThe integrated media plan will begin in May 2010 and continue through May 2011.


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EvaluationRed186 plans to measure the campaign’s effectiveness during the launch and the post-campaign time periods.

Pre-CampaignOnce the social media newsroom is launched, Red186 will track the amount of unique visits and click-throughs. Web analytics will provide complete tracking of the use of the social media newsroom to follow the nation-wide coverage.

During the LaunchRed186 will evaluate traction of the campaign by assessing how many visits occur on the website and social sites, upload their insurance stories to social sites, visit the tour bus, and obtain insurance quotes from State Farm agents. The agency will also track how many policies are written for the target market during the campaign time period as well as the following year of the campaign. Comparing the amount of policies written during the campaign and 6 months prior to the campaign will communicate the success. The purpose of tracking the amount of insurance quotes of this demographic is to determine how many young adults show serious interest in State Farm coverage. Also,

comparing the number of rate quotes and the number of policies signed may give the agency insight to the impact of the campaign. In order to track this information, State Farm agents will report their numbers regionally. If agents report their numbers after the tour bus visits a local town, the agency can measure the wave of interest across the nation compared to geographical areas that the tour bus has yet to visit.

Post-Campaign ResultsAfter the campaign, Red186 will measure the total number of sales, website hits, insurance stories, and tour bus attendance. The most important of these are increasing growth in young adult auto policies. Red186 will also measure brand awareness and brand loyalty via the consumer’s feedback and perception. The agency will use nationwide pre and post survey research to determine how young adults perceive State Farm and State Farm agents before and then after the Real Talk campaign. Sales and retention rates of current young adult State Farm policy-holders and Legacy policy-holders will also be tracked.

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Budget

$217,417.00

$19,191,256.00

$2,225,000.00

$1,500,000.00

$345,000.00

Pre-CampaignCampaign LaunchCreative CostsContingencyPost-Campaign


Complete Budget Breakdown

TOTAL BUDGET FROM STATE FARM: $40,000,000

PROJECTED COST OF CAMPAIGN: $23,478,673

state farm - real talk

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