Research shows insurance companies cautious towards social media

Susan Andre 2013

Study shows sector is investing in social media marketing but raises questions over measuring campaign effectiveness and business impact

The sector taking a careful approach to social media is reinforced by the fact that only six in ten (63%) marketing directors in insurance companies had seen a greater emphasis being placed on social media in their external communications. This was the lowest number across all sectors, which averaged at 69% and saw telecommunications marketers coming out highest, at 81%.

The insurance industry’s cautious stance is also reflected in the study’s other findings.

 

  • The insurance industry will be investing growing amounts of money into social media, rising up to a quarter of overall marketing spend in the sector in 2013
  • Sector more cautious than others as it is shown to lack confidence in campaign effectiveness and impact on profitability of social media marketing
  • Survey reveals risk of turning potential customers off by being too bullish with social media marketing.

Henley-on-Thames, Oxfordshire, UK, 29 January 2013 – Well-intentioned marketers in the insurance sector could inadvertently turn customers off by irritating them with their online behaviour. This is the key finding of new global research into the effectiveness of social media marketing commissioned by Pitney Bowes Software, a global leader in customer data, analytics, communication software and services.

The independent study, conducted by Vanson Bourne, compares social media marketing trends among marketing directors with consumer attitudes to social media marketing across Australia, France, Germany, the UK and the USA, covering seven business sectors.

The insurance industry will be investing a significant share of marketing budget on social media, with respondents predicting spend will more than double from 11% in 2011 to 25% in 2013. The latter is largely in line with the other sectors (averaging 27%) far less than the investments planned by the telecoms sector, which will be committing over a third of their marketing budget (36%) to the new channel.

The sector taking a careful approach to social media is reinforced by the fact that only six in ten (63%) marketing directors in insurance companies had seen a greater emphasis being placed on social media in their external communications. This was the lowest number across all sectors, which averaged at 69% and saw telecommunications marketers coming out highest, at 81%.
The insurance industry’s cautious stance is also reflected in the study’s other findings.

While nearly half acknowledge that the role of social media will grow as it becomes more deeply rooted in consumers’ lives (47%), another 41% are of the opinion that social media will only be applied to certain areas of their organisation’ markets or business units, a view shared with respondents from the utilities and retail banking sectors (both 34%).

Less than half the insurance marketers questioned are confident that their social media campaigns are effective (49%), the lowest number of all sectors. Less than a third (31%) feel that they have enough information to link social media spend back to their organisation’s profitability, compared to 60% in telecommunications.

The sector’s caution is well-placed given that most marketers' enthusiasm is not matched by consumers’ views of social media marketing. Only a quarter use social media to follow and keep up-to-date with certain companies or brands (26%), while most are predominantly on social media to keep in touch with friends and family (78%).

In this context, ‘followed’ brands fare relatively well. Nearly half of social media users (48%) are positive towards receiving their marketing messages. The reverse is true of communications from companies people don’t follow, which 40% say they would be annoyed to receive. What is more, consumers rate unsolicited marketing (‘spam’) and pop-up advertisements as their worst experiences of social media marketing.

Perhaps most worryingly, 65% of consumers surveyed say that they would stop using a brand that upset or irritated them as a result of their social media behaviour.
In contrast, recommendations from online friends hold more sway: 68% said that they investigated these or even made a purchase (15%).

Companies out of touch

When it comes to interacting with brands, the research shows consumers are most interested in discount or money-saving vouchers, new products and services, and upcoming sales and events. Yet these are bottom of the list for marketers, mentioned by fewer than one in ten of those surveyed. Instead, marketing decision-makers highly rate the effectiveness of newsletters, information about the organisation’s social responsibility and customer satisfaction surveys, all of which were least interesting to consumers.

Identifying which social media channels to invest in was a challenge for all marketers surveyed. While they were aligned with consumers in their emphasis on Facebook as the most popular and trusted social media site, they disagreed about the importance of other social media outlets. Beyond Facebook, marketers devote most of their remaining spend on Twitter (57%) and Google+ (51%). By contrast, consumers prefer YouTube – rated only fifth by all marketers – over Twitter and Google+.

“Insurance companies have had a tough time, and adapting to the effects of disintermediation, price-based competition and ever more savvy customers has not been an easy journey. They have generally understood that social media can be a great channel for improving customer centricity and building the long-term relationships they need to establish to remain profitable,” says Kieran Kilmartin, Marketing Director, EMEA, Pitney Bowes Software.

“However, they are well-advised to be cautious, as our research shows that there is still a disconnect between marketers’ high expectations of social media, and the lack of desire among consumers to engage. The continued use of old-school 'broadcast' marketing models – which we have found across all sectors – is likely to turn people off, and at worst, trigger them to become ‘brand blockers’ rather than the loyal customers insurance companies need them to be."

Further retail statistics

  • While the increasing importance of social media in consumers’ daily lives is identified as the top marketing trend for business-to-consumer organisations (58%), insurance companies are most concerned by the increased competition they are experiencing in their primary markets (57%).
  • The greatest challenge for the insurance industry is deciding which social media outlets to invest in (41%), an issue it shares with many of the other sectors
  • This is closely followed by analysing the impact of social media campaigns on up-selling and cross-selling (39%), managing the amount of time and money spent on social media networks (35%) and the impact of campaigns on revenues and profitability (35%)
  • While email is the most widely used customer communications channel (82%), traditional communications channels are still very much the norm while online and new media (video, mobile apps, SMS, Instant Messaging) are used far less than the overall average for all sectors.

To read the White Paper ‘Social media: contrasting the marketing and consumer perspectives’ –– download now

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For further information, please contact:
Richard Simpson or Deborah Reid, Six Degrees
richard.simpson@sixdegreespr.com / deborah.reid@sixdegreespr.com Tel: + 44 (0) 118 900 0860

About the study

In August and September 2012, Vanson Bourne conducted online interviews with 300 senior marketing decision-makers working in business-to-consumer organisations across five international markets (UK, France, Germany, Australia, USA) and seven economic sectors (Retail, Insurance, Retail Banking, Utilities, Telecoms, FMCG and the Public Sector).
The questionnaire focused on their use of social media as a marketing channel, including aspects such as marketing spend, channels used, social media tactics used, measurement and challenges associated with social media marketing.

At the same time, 3,000 adult consumers in the same regions, who use either use or have previously used social media, were interviewed online to explore corresponding areas of interest, such as which social media they are using, what they are using them for, along with their response to receiving marketing messages and providing personal information.

About Pitney Bowes Software

Pitney Bowes Software (PBS) was formerly Pitney Bowes Business Insight (PBBI).
Pitney Bowes Software provides multichannel solutions that optimise data to create relevant dialogue between organisations and their customers. These solutions enable lifetime customer relationships by integrating data management, location intelligence, sophisticated predictive analytics, rules-based decision making and cross-channel customer interaction management to increase the value of every customer communication while also delivering operational efficiencies.
Pitney Bowes Software is a wholly-owned subsidiary of Pitney Bowes Inc. (NYSE:PBI), a customer communications management technology leader. For more information, please visit www.pitneybowes.co.uk/software and www.pb.com/software.