Using DRTV to Target the Under Age 65 Insurance Consumer By Warren Hunter, DMW

The following article was published in LIMRA's MarketFacts Quarterly, 
Winter 2005. 

With today’s advances in segmentation, modeling, and analytics, it is relatively easy for insurance marketers to target people under age 65. The challenge, however, is to find those under age 65 that are in need of real insurance. Real insurance being coverage for those people who need to purchase their own primary insurance coverage – not supplemental products such as HIP, HAP, or AD&D. These prospects are typically self-employed, early retirees, employees of small companies that don’t offer insurance, and those in between jobs and/or school. 

This target group is not a homogenous one. As part of a large, diverse group of those ages 18 to 65, they cut across generational lines, and, therefore, have different value sets. What’s more, their wants, needs, and preferences vary. How then, can insurance marketers reach these segments and influence an insurance purchase decision? 

The answer is to utilize the time-tested tenets of direct marketing with the first step of getting a prospect to raise his/her hand. There are a variety of “broad market” media channels to utilize for this purpose, including free standing inserts, direct response television (DRTV), run of press print advertising, electronic (Internet and e-mail), and saturation mail. Broad media such as these allows the Under 65 prospect – a prospect which is difficult to identify – to self identify. 

Using DRTV to Combine Brand and Direct 

To spend advertising dollars cost-effectively, it’s important for insurance marketers to get brand-building mileage out of lead generation activity. 

Brand advertising is intended to build and sustain awareness. It creates a product or service “identity” or image. Brand advertising is not designed to create an immediate response. Broadcast media is purchased as a fixed spot and measurement of results is done on a large, gross scale. Direct response, on the other hand, drives orders, inquiries, or Web traffic. It serves to demonstrate a product or service utility. It includes a strong call to action and copy is laden with benefit-driven language designed to spur a quick response. Broadcast is purchased as pre-emptible and requires micro-measurement of results. 

DRTV is one broadcast medium in which brand and direct can be combined to effectively reach out to potential prospects. But why DRTV? For starters, DRTV is a controllable medium. It is a cost-effective channel. It is flexible, allowing marketers to make national cable, local cable, and spot buys. And it feeds a return on investment (ROI) model in that allowable acquisition costs are similar to paying agent commissions. 

Case in Point: Blue Cross Blue Shield of New Mexico 

The following is an example of a BlueCross BlueShield plan that utilized DRTV to cost-effectively target the elusive Under 65 uninsured with an appropriate insurance product. 

Blue Cross Blue Shield of New Mexico (BCBSNM) knew it was ready to build a sustainable Under 65 program. BCBSNM maintains a strong historical presence, serving the state of New Mexico for more than 60 years with a support staff of 700 employees. Because New Mexico has a relatively poor state economy, there is a high rate of uninsured in the population. Insurance coverage for those age 65 and under is neither readily available nor affordable. With a historically small marketing budget and limited internal capabilities, BCBSNM needed to develop a way to reach out to the uninsured marketplace cost-effectively and efficiently – to capture its share of the market.

BlueCross’ product, BlueChoice® is a preferred provider organization (PPO) plan that offers consumers a choice of more than 5,400 providers in its network. The plan’s target audience consists of individuals and families that are not provided medical insurance through their employers. These are self-employed people and their dependents; recent college graduates; people between jobs; early retirees not eligible for Medicare; and children.

The initial challenges included cost-effectively accessing the Under 65 market and increasing market penetration. The plan needed to maximize return from a limited marketing budget with immediate lead/sales generation and reinforced market presence. It also needed to manage lead flow against support capabilities and develop a sustainable marketing program.

The first step was to focus on the broad-reaching market through self selection. The agreed-upon solution: a direct response television campaign. The initial approach utilized a DRTV campaign designed to target a large, diverse Under 65 demographic. The campaign consisted of one creative spot and a limited DRTV media budget. The initial spot called “Breaking News” was simple in production value, showing a newspaper headline that read: “Good news for New Mexico residents under age 65!” This tested tactic called out to the target audience to gain attention and offered benefits, encouraging the prospect to call for further information. 

The initial results were dramatic. The spot immediately and significantly increased BCBSNM’s sales as soon as the television spot launched. The campaign beat the targeted cost-per-inquiry by 35 percent, and established itself as an in-market “control” position. As a result of this initial success, the media budget was expanded. 

Ongoing challenges presented themselves as the campaign continued, however. As is typical with a DRTV effort that has been in the media for a period of time, the creative “wears out” and responses drop off. Because the goal of a DRTV campaign is to maintain and improve the target cost-per-inquiry, a new creative execution was developed and tested against the control. Another challenge was to maintain lead volume against capacity and maximize lead value for inbound and outbound telemarketing and mail fulfillment. 

A second creative was developed to guard against wear-out and to determine best in-market performance. The new creative – called “Great Card” – maintained higher production values than the first effort and had a more contemporary treatment. The spot consisted of high-energy visuals, graphics, and music, and diverse, relevant talent. The focus was on the card, as the BlueCross BlueShield card and logo are well known to the brand. Here, direct response and brand were combined to create awareness while simultaneously driving response. “Breaking News” was tested head-to-head against “Great Card.” 

Great Card emerged as the winning campaign and eventually a third creative effort was created and tested. “Chip’s Choice” features an animated blue man named Chip. Not only was this winning execution an industry award winner, but, more importantly, it generated – and continues to generate – low-cost, qualified leads for the BlueChoice® product. Key to managing this was concurrent creative rotations to monitor and quickly detect results fall-off. Based on daily monitoring, rotations could be narrowed and spots cancelled or hiatus called for where necessary and in real time. 

As a result of continual testing, BCBSNM successfully established dual control positions for two consecutive years. It successfully managed results against a cost-per-inquiry target by market, by station, and by daypart. The goal of using a broad-reaching medium to have prospects cost-effectively self select was achieved in a market where leads have traditionally been difficult to identify. 

DRTV Quiz

Take this quick quiz to see how you score in DRTV expertise. Get six correct and you’re a DRTV pro. Four to five correct – you’re doing OK, but might want to brush up on the basics. Three or fewer correct and it’s time to sign up for “DRTV 101.” 

1. A spot airing in which of the following programs will most likely generate the lowest cost per lead/order?

A. Repeat of M*A*S*H
A. Super Bowl
B. Friends

Answer: A. Repeat of M*A*S*H. Because the program is a re-run, people are much less invested in the programming. Also, because the rerun typically would not run on the “Big Five” channels, there is likely space available.

2. Which mix of creative lengths will be most efficient?

A. Four :30 spots
B. One :120 spot
C. Two :60 spots

Answer: B. One :120 spot. A two-minute spot offers the most selling time. It offers the marketer more time to tell its story. A two-minute spot is the most effective length if the brand is not well known or if a product requires demonstration or explanation. 

3. Which phone number will be most efficient over time?

A. 1-800-444-2000
B. 1-800-CARLOAN
C. 1-800-FLOWERS

Answer: A. 1-800-444-2000. By using specific numbers as opposed to vanity numbers for each station and each spot length, marketers are better able to track the effectiveness of individual commercials and their placement. 

4. How long does it take to track the effectiveness of a DRTV spot?

A. One week
B. Two weeks
C. One day

Answer: C. One day. The ability to see how well a spot is doing is a major advantage of DRTV over other media channels. Overnight answering services feed media-buying software and allow marketers to make changes on the fly, thereby saving them media dollars. 

5. If you want to ensure you are getting the lowest TV rates you should:

A. Use station rate cards
B. Buy on a Gross Rating Points (GRP) basis
C. Utilize DRTV buying strategies

Answer: C. Utilize DRTV buying strategies. Direct response television rates are based on remnant time, meaning that all unsold time that is usually sold at higher prices is made available at a lower, “fire sale” rate. Unsold air time can be compared to unsold hotel rooms – there’s no way to recover lost revenue so it’s better to sell at a lower rate than not at all. Although stations publish rate cards with direct response rates, it is common practice for agencies specializing in direct response media to negotiate rates at the outset. 

6. Of the following, which is a true read of a DRTV campaign’s success?

A. Cost per lead/sale
B. Reach and frequency
C. Winning awards 

Answer: A. Cost per lead/sale. Direct response advertising always focuses on return on investment (ROI) and the bottom line. 

Questions, courtesy A. Eicoff & Company