Marketing News Jan. 15, 2007 13

‘(The ads) may startle (in some cases), but thatpulls them in and shows how this is relevant tothem.’

Verbatim:Case studyAdvertising

By DEBORAH L. VENCE

State Farm didn’t want to be your father’s insur-ance company anymore.

Bloomington, Ill.-based State Farm, thenation’s largest insurer of homes and automo-

biles, began a mission in 2004: to create a marketingcampaign that would attract the attention of 18- to 25-year-olds. In State Farm’s 80-plus years of business, old-er customers had long comprised a significant portion ofits client base.

“Our research revealed that we were considered abrand for an older customer. So, we had to make ourbrand relevant to a (younger) age segment,” says DeAn-na Kerrick, a customer segment marketing manager forState Farm. “We did a lot of quantitative and qualitativeresearch with (younger adults). We also did researchwith our internal agents who (deal with) customers. Wewanted to address issues not only with the customer, butalso with the sales force.”

The research, which queried thousands of 18- to 25-year-olds across the United States in 2004, proved thatthe State Farm brand was well respected among this agegroup, but it wasn’t considered a relevant brand tothem, or one that represented products that addressedtheir financial needs. The brand was seen as having a

strong image and clear message, but as being unattain-able.

We needed to become relevant (among this agegroup),” Kerrick says. “They are trying to build assets orjust get out of debt depending on their situation. Theywant to be respected. They want to be taken seriouslyand know that their money is valued just as (much as)an older customer’s money.”

Meanwhile, Kerrick says that the research proved thatyoung adults want insurance, and that they view autoinsurance as a requirement to driving. What’s more,State Farm was feeling the competition from rival insur-ance firms Geico and Progressive, which already hadbeen marketing to 18- to 25-year-olds.

State Farm spent 2005 planning a strategy for bestmarketing to the segment. The company invited feed-back from company employees and agents who workclosely with customers.

The insurance company finally came up with a multi-pronged marketing campaign—dubbed Now What?—totarget this age group. The campaign comprises TV andprint ads, and direct mail, and officially launched lastAugust at the Lollapalooza music festival in Chicago’sGrant Park. Young adults were most of Lollapalooza’s166,000 attendees.

Among the campaign’s eight TV spots is one that

depicts an African-American man in hisearly 20s, who is shown putting a new air-conditioning unit in his apartment win-dow on a hot summer day.

“We see him put the a/c in the window.Then in that moment of bliss, he turns onthe a/c and starts to feel the cool air,”explains Dave Kissel, senior vice presidentand group business director at DDBChicago, the ad agency that helped createthe campaign. “As he is enjoying thereverie, you hear a creaking sound, andthe air-conditioner falls out the window,”and a car alarm starts to blare.

“What we see the man do is pull out akey fob and make the alarm sound goaway on the car. It was his car that hedamaged,” Kissel explains. “Then the

screen morphs into the words, ‘nowwhat.com.’ ”Print ads for the Now What? campaign are running in

such magazines as Blackbook, Surf, Rolling Stone, US,Modern Bride and Time Out Chicago. Copies of Time OutChicago were handed out at Lollapalooza.

In one print ad, the rear of a car is shown sticking outof the side of a building. Next to it is the phrase,“nowwhat.com.”

Meanwhile, direct mailers have been sent to existingcustomers and prospects in the 18- to 25-age segment,Kerrick says.

For example, in a self-mailer titled “Crushed,” theback end of a red car is crushed by another vehicle. Onthe mailer, it states: “Find out how to straighten out amess like this before it puts a dent in your wallet atnowwhat.com/crushed.”

“We felt an integrated campaign was the only way togo because of who we were attempting to reach.(Y)oung adults are elusive and (their) media habits(consist of) literally using anything they can get contentfrom these days,” Kissel says. “We’ve seen that they usemedia simultaneously. They are text messaging whilethey’re watching TV. The option of choosing only one or

See STATE FARM / Page 14

BETTERCOVERAGE

State Farm ad campaign targets youth,reinvigoratesbrand image

two media channels was going to be ignor-ing the reality of how this audience getsmedia today.”

Kissel also points out that the ads in thecampaign don’t reveal the State Farm brandname. Viewers have to go to thenowwhat.com Web site to find that out.

“It lets the viewer ask the question: ‘Ifthat happened to me, where would I go?”he says.

The idea of the campaign was to put situ-ations in front of young adults about insur-ance and protection.

“(The ads) talk about (needing) insurance in a humorous way. We knewfrom our research that humor and intriguewere appealing. (The ads) may startle (insome cases), but that pulls them in andshows how this is relevant to them,” Ker-rick says.

Kissel adds: “What we’re doing in creating these moments is ask the question,‘What do you do, and where do you go?Who can help you?’ They are targeted to sit-uations that young adults might find them-selves in. (After going to nowwhat.com),you see State Farm is the answer and thatthey can help you and answer your ques-

tions. We’re trying to createinterest andintrigue aroundthese pivotal situations, andget them intoit in a way thatwill engage and entertainthem.”

While the cam-paign only hasbeen running fora few months,Kerrick says therehave been plentyof hits to thenowwhat.comWeb site already.(Kerrick, however, did not yet have infor-mation available on new clients or increase in revenue as a result of the cam-paign.)

“We have seen over a million and a halfhits to the site since mid-August,” she says.“On average, we’re seeing 10,000 to 20,000hits per day on the nowwhat.com site, and

some days are even higher than that.”Moreover, Kerrick says State Farm has

received positive feedback about the cam-paign through blogs.

“Young adults have been blogging aboutthe campaign and have commented on how‘cool’ ‘Now What?’ is. That’s good news,”she adds.

And as far as the future of the campaigngoes, Kerrick says, “We can’t say what theshelf life will be. But for right now it isdoing what we want it to do in terms ofinterest and relevancy.” �

—Deborah L. Vence is a contributingeditor based outside of Chicago.

14 Jan. 15, 2007 Marketing News

STATE FARM / From page 13

Spots show pivotal situations where State Farm can help

State Farm opted for an integrated approach to its campaign combining television spots with direct mailers like the one shown above.

The contest between Vail and Aspenski areas over which is the highesthas nothing to do with mountain ele-vation.

It’s all about the price of a lift ticket. The Colorado-based Aspen Skiing Co.

hiked its single-day lift ticket price to $82 inlate December, making it—for a while—thehighest priced ticket among U.S. ski resorts.Vail countered, jumping its price from $77 aday to $85.

Until recently, it’s been the other wayaround. Aspen was tops in ticket prices. Butthis year, Aspen officials said they’re done,they have no more price increases planned.And Vail’s reservation center says the top-tierholiday ticket price won’t go above the $85dollar mark.

But there’s more at work than just profitand loss built into the price of a ticket, ana-lysts say. There’s also prestige and marketing.

Marketing professor Meg Campbell at theUniversity of Colorado’s Leeds School of Busi-ness says many times consumers assumeprice equates to quality. Campbell says bylabeling themselves the highest priced skiresorts, Aspen and Vail also imply they are thebest ski areas.

For their part, ski resorts for years have saidthe media pays too much attention to the priceof a single-day lift ticket purchased at the tick-et window. According to industry officials,most resort guests either take advantage ofmultiday tickets or use available discounts. �

—The Associated Press

Colorado slopes raise lift ticket rates to set prestigious image

NATION ● Snow patrol