• Brandweek, Monday, April 21, 2008 11:15 AM

After years of double-digit boosts in ad spend, insurance companies pulled back a bit in 2007, with the category rising just over 6%, according to Nielsen Monitor Plus. That is quite a respectable number--but it does not look so high compared to the 31% increase in 2005 and the 17% one in 2006. And last year, the top three spenders--Geico, Progressive and Allstate--had flat to 1% increases.

The slowdown is due to factors including the economic downturn, five years of record-breaking ad spending, and the need to cut costs. "The insurance companies had reached all-time, record highs over the last few years--and yet, their revenues only increased by less than 1% last year," says Bob Hartwig, president at the Insurance Information Institute, New York. "To be honest, it's actually quite remarkable that advertising spend grew 6.1% in 2007, given that the industry's premiums shrank by about a percentage point, which is testimony to the competitiveness of the market."

The companies "had hit a point where they were as aggressive as they could afford to be, and [now] it's more about managing the amount of spend you have and using it efficiently,' notes Ted Ward, CMO at Geico, Chevy Chase, Md. "For us, it's about always trying to dial up and dial down [the message] as efficiently as possible. As long as we remain one of the fastest-growing, we think it's good to spend. But you have to be responsible."

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