Ripping Apart Liberty Mutual's TV Ad Campaign

I haven't posted here in a very long time, not because I have stopped thinking of important things to say, but mainly because I'm not sure 8,000 words on how I'm terrified of becoming a dad in six weeks (probably my most common thought these days) would be an interesting or insightful read for my audience.  However, I was chatting with a friend recently about how I'd essentially stopped blogging, and he mentioned that it'd be great for me to try to "loosen up" the writing chops a bit with a post on terrible TV commercials.  So, I've decided to take his advice.  My apologies if this comes out terrible; I'll just blame it on rust. ::loosens up throwing shoulder::

I occasionally post about TV commercials and postulate on the reasons (typically corporate reasons that I have no business postulating about since I don't work for these companies, but hey, whatever) behind the awful ones.  Usually it's an indictment of corporate America as a whole and more specifically its politicized misread of the target demographic, but I'm going to do something different here today and focus entirely on advertisements from one company, since I think there's a common theme running throughout the ads that might be useful to talk about.

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Liberty Mutual Insurance is the United States' third-largest property and casualty insurance carrier (behind Geico, which is owned by the massive conglomerate Berkshire Hathaway, and AIG), and was the 76th largest company in the US in 2013, per the Fortune 500 list.  They're a massive company, with 50,000 global employees, and as a result they can spend a ton of money on advertising.

We all know Geico's reputation as an innovative (if occasionally overbearing) advertiser.  Their commercials are some of the best-known ads in recent memory, and their "hits" often carry over into the popular culture mainstream.  Just ask my wife, who in 2013 won several Halloween costume contests at her company by dressing as the Geico "Hump Day" camel.  What the hell, just click the link below and remind yourself of the latent awesomeness of this ad:

This ad garnered (as of today's writing) 1,878 likes on YouTube, vs. 52 dislikes.  (Who the hell are those 52 people and can they please leave the country?)  The advertisement is memorable for all the right reasons - it touches upon an emotional string that most everyone who has ever worked in an office (or seen the movie "Office Space") can understand, it's whimsical, and it's funny as hell to top.  Does it remind people of auto insurance?  Not directly, but I bet if you asked most people about the "Hump Day" camel, they'd tell you it's a Geico ad.

Liberty Mutual's most recent ad campaign goes "all-in" on being all about auto insurance.  They use different actors in each, but the backdrop is always the same - a sterile, urban backdrop, with the Statue of Liberty in the background (perhaps to remind the viewer of the company's logo).  The actor shares a personal story about having auto insurance, either through Liberty Mutual or through a competitor, and the commercial concludes with some music and a voice over, with a brand logo screen.  It's standard commercial fare from a previous decade, and I'm personally surprised at how subdued it all is.

Where I think people get pissed off by this campaign is with the actors and their personal stories.  Check this one out, for instance:

Perhaps before designing this ad, Liberty Mutual's creative team should have thought a bit about what people who own (or lease) cars in the United States tend to already know about their cars.  This may be a bit of an elitist presumption on my end, but I think it's pretty common knowledge that a new car depreciates the instant you drive it off the lot.  Maybe other people don't know this - maybe I'm wrong - but I think I'm correct about this.  The average new car in the United States these days is owned for eleven years, and no day of that eleven-year experience is more expensive than the day you drive it off the lot.

Keep in mind this isn't a commercial for Liberty Mutual's standard auto insurance, per se.  It's a commercial for a specific rider called "New Car Replacement", which (if you read the fine print) is additional coverage (that you have to pay extra for) which only applies to brand-new cars under a year old and under 15,000 miles.  I'll give Liberty Mutual a few extra credit points for designing a commercial for a specialty rider vs. a standard auto insurance policy, but other people - who, unlike me, do not work as market researchers specializing in insurance - have absolutely no chance of getting the distinction.

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Unfortunately, the guy above might be the least annoying actor/story combination in Liberty Mutual's most recent ad campaign.  Check out this lady:

The advertisement above is well-intentioned, and as someone who moderates focus groups, I can see how it made it through focus groups without any obvious red flags.  The story is earnest and emotional, and if you get people who are already thinking about insurance in a conference room together, they'll say something collectively like "Sure!  That makes sense to us!"

Unfortunately, people sitting at home on the couch eating potato chips are going to focus only on the superficial (the annoying and poorly executed "You freak out!" line, for instance, or the idea that the person who taps the station wagon - and is therefore at fault - being somehow the "victim" of the evil insurance company) aspects of the commercial, instead of what it's trying to sell - again, a type of additional optional coverage called "Accident Forgiveness" which is part of an overall insurance policy.

The ad actually raises a valid point - auto insurance companies do have an annoying habit of raising rates on people who've had an accident (often regardless of fault in the incident) and "Accident Forgiveness" might be an important value-add that could drive people to Liberty Mutual's product.  But ultimately, the executive above is too confusing and too annoying to get the average consumer to even think about switching to Liberty Mutual.

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Here's the worst of the bunch.  I'll present it without context, below:

I hesitate to look at YouTube comments, because I am not a masochistic asshole who likes to punch himself in the head (most of the time).  But in this case, it was actually illustrative to look at a few of the comments for this video:

• A message to Liberty Mutual: Whoever you hired to create these ads has done you a disservice. Your audience understands that insurance companies are businesses, not charities. The fact that your rates go up after an accident isn't a penalty; the company is recouping its losses. 
• Whoever is their PR agency, they need to be fired...really? Brad? General, Geico, Progressive are all creative...but this is just stupid.
• This girl and this commercial are challenged!  The instant it comes on I have to mute or end up throwing something at the TV.
• This actress really annoys me. She tries way too hard to feign emotion. Someone needs to tell her it's just a commercial for a racket industry, not a Broadway play.

And here's my favorite comment:

• These videos are insulting and annoying.  I made a special trip to YouTube just to let this company know how aggravating these ads are.  These ads show fictitious consumers who rail against insurance companies. Here's the kicker: the sponsor of the ad is an insurance company itself.  They obviously think the average consumer is brainless not to see right through this soap opera. 

That's really the issue here, isn't it?  I know lots of people within the insurance industry who rail against the Geicos of the world for creating advertisements that have nothing to do with insurance.  These folks need to take a second to actually think about perceptions of the insurance industry amongst mainstream Americans (hint: perceptions are awful).  Perhaps the only way to get people to think positively about your brand if you are an insurance company is to use smoke and mirrors (or camels, or Flo, or whatever) instead of focusing people on more "obvious" factors such as the products your company offers or your company's value proposition.

The product being pitched in the above ad is called "Better Car Replacement."  (Though I've seen this ad on TV hundreds of times, I actually had to write this blog post and freeze the video toward the end in order to remember this, so great job, Liberty Mutual!)  For all I know, "Better Car Replacement" is an excellent value for consumers - insurance companies have teams of actuaries who, if you ask them, will tell you their job is to find ways to maximize profits for the organization while offering a great deal to customers.  People are very fickle about auto insurance, and will change carriers at the drop of a hat - so the smart companies actually dedicate tons of resources toward trying to keep their customers loyal.  But all of this possible helpfulness is just completely lost in the horrid execution of the TV commercial.

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The other item I wanted to bring up regarding this ad campaign is demographic in nature.  I do not think it is a coincidence that the actors in the above ads are a blue-collar dude and two young women.  Auto insurance companies often segment their customers into groups based on demographics, and it's pretty clear to me that Liberty Mutual was attempting to increase market share with these ads among "git 'er done" type guys and female Millennials.  It could because, when these types of people select an auto insurance carrier, they are less likely to switch companies no matter what happens - but who knows, I am only speculating here.

Will it succeed?  I actually plan to check out Liberty Mutual's earnings statements in the quarters ahead, because I'm curious to see if this ad campaign did anything to drive increased sales.  (I would doubt seriously if it did, but I'm no fantastic businessman, so I could be wrong about this.) Time will tell...