In COVID time, life insurance sector shifts ad spends to radio
According to TAM Adex report, advertising by the category in Mar-May '20 dropped by 47 per cent on TV and 25 per cent on digital. It increased by 163 per cent on radio
The insurance category under the BFSI sector is seeing an upswing, specifically during the COVID pandemic when people are scared and are investing in covering their medical expenses. Hence, advertising becomes crucial for the sector at this point in time.
During this crisis, TV as a medium has witnessed a huge spike in viewership compared to print, digital and radio. But interestingly, for the life Insurance category, television wasn’t the most preferred medium. It was radio. During the lockdown period, with people tuning in to seek more and mor information, radio garnered a reach of 51 million.
According to the TAM Adex report on the advertising by life insurance category, in terms of ad volume growth, except radio, the ad volumes of the category decreased in all mediums. Advertising on TV medium remarkably dropped by 47 per cent in Mar-May '20 and advertising on digital medium declined by 25 per cent in Mar-May '20. However, the ad volumes on radio heightened by more than 2.5 times for the same period. It increased 163 per cent during this period as compared to the last year.
Experts believe there could be two-three factors, apart from the reach, that may have lead to this tremendous growth of the category' ad spends on radio. One of the reasons for the redirection of the spends towards radio is the absence of print and outdoor medium. Also, ad rates play a major role in choosing the platform for advertising. During COVID period, rates have gone down across sectors, but TV still remains an expensive mediums as compared to others.
Explains Shekhar Banerjee, Chief Client Officer and West -Head, Wavemaker India, “Insurance is not insulated to COVID, even when it is more essential in such times. There are multiple factors at play. To start with, consumers are in the preservation mode and they are not in the mind space of investment. Second is the fact that financial year is over and the new year couldn’t start with fresh budgets, third fact is the last-mile fulfillment huddle and it naturally had an impact on spending. The fourth reason is the choice brands had to make between chasing renewal or going for new consumers, and finally there is the accelerated adoption of digital platforms and the role of insurance aggregators.”
“It is a watershed moment for this category and how it will be advertised in future. This is obvious when one sees reduced spends on offline medium and higher dependence on partnership and performance marketing through digital,” he adds.
Persuasion is an integral part of advertising, just as it is in almost every aspect of our life. In normal circumstances, a high involvement purchase like life insurance requires tremendous persuasion to satisfy the majority of the arguments in the buyers' mind. However, in a global pandemic that has seen a growing paranoia around the world, having life insurance is a forgone conclusion for most as it becomes a very essential financial investment, with many reconsidering the adequacy of their cover too.
Megha Ahuja, AVP- Digital Media Planning, Carat India, shares, “Also many have made behavioural changes by opting to purchase insurance online, something that would have easily taken another decade at least for consumers to make that transition. Further, with few life nsurance players launching COVID19-specific policies and short-term policies, the growth curve for this category is far from flattening,” said
She further adds, “print and outdoor spends did get redistributed to radio and digital. Radio has done really well in the interiors. Further at-home-listenership has increased as people have found ways to connect with their favourite radio jockeys. Radio also helps get local and relevant information to listeners and hence has been a preferred medium for many during the lockdown. Major life insurance companies who have the budgets to spend hence have made the logical choice of opting mediums that would give them better reach.”
Another media planner who wished to remain anonymous shared that the life insurance category typically advertises in two parts of the year. One is between Jan and March when financial years ends and people upgrade/take premium insurance to get tax benefits. Second, during the pre-festive period. “The category typically advertises on TV for the reach, and on digital to get new set of audience. Radio may have proven very effective because of the rates. As rates have fallen across categories.”
As per the report, in the top 10 advertisers list, Shriram Life Insurance, Star Union Dai-Ichi Life Insurance & LIC of India were common between TV and radio during Mar-May’20. Whereas, Shriram Life Insurance was the biggest advertiser on TV in the category with 30 per cent share, LIC of India was the biggest on radio with 87 per cent share. ICICI Prudential Life Insurance was leading digital top ten advertiser list holding 80 per cent share.
According to Satishwar Balakrishnan, CFO, and Principal Officer, Aegon Life Insurance, which has been active on digital, radio, print, and television, they derive most of the optimum output from digital mediums.
As per the data, during March-May’20 period, Aegon Life Insurance advertised across digital, TV and radio. The company has always had a strong inclination towards advertising on digital platforms, informed Balakrishnan. "During this time of crisis, when customers have moved online, it has just strengthened our belief in digital advertising," he remarks.
“Radio has been a part of our marketing mix. But digital mediums have been the major part of our media mix. Although we run ad and marketing campaigns on all digital platforms, Facebook has proved to be the most useful platform to market and advertise our products.”
As per the report, the top 10 advertisers added almost 100 pr cent share on TV and digital. Also, in May '20, the number of advertisers and brands on TV and Radio decreased compared to Apr’20. For digital, count of brands decreased during May’20 whereas number of advertisers remained the same.
Ahuja explained, “Yes. While the Jan-March quarter is the peak sales period for the category and hence you see ad spends being high, the numbers contracting for other mediums this quarter is in line with generally how we see it panning out year on year. With major advertising avenues this year being affected--postponement of sporting events, movie releases, etc-- most life insurance companies will look at distributing their spends through the year. Radio surely will continue to attract spends, especially with India now moving towards Unlock mode and commuting to work.
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