Weaning insurance marketers off their TV addiction: insights from Ifty Kerzner, Kissterra

Insurers still top the list for linear TV ad spend, despite a high level of personalisation required for each customer. But with State Farm recently ditching a Super Bowl commercial for TikTok, is this rather slow-moving industry ready for a performance marketing revolution?

Insurance has typically cast a wide net when it comes to advertising, paying billions of dollars for TV air-time with over 100,000 insurance commercials in 2021.

But now, legacy insurers are slashing ad budgets amid inflation, with 100-year old US insurer State Farm reducing its spending by almost 12% this year. Insurers are attempting to shift their ad spending to maximise every dollar, and are looking to attract new customers from the pool of Gen-Z consumers that are just beginning to buy insurance products.

Enter Ifty Kerzner, Co-founder and President of Kissterra – a company which bills itself as ‘the world’s first insurance marketing operating system’. He feels insurers are waking up to the new digital reality, understanding that casting a wide net in advertising is not as valuable as trying to digitally hook customers individually.

In an industry ruled by personalised pricing, advertising that leverages each consumer’s unique profile will increase acquisition and ensure profitability by matching the right price to the right customer.

Sitting down with PMW, Kerzner explains why he believes insurers can look to a more pointed method of advertising that focuses on specific populations, rather than on entire markets. By utilising customer data, marketing efforts can create a personalised approach that targets the right customer at the right time.

Q. Rather than a martech company, Kissterra is billed as an ‘insurance marketing OS’. Can you explain what you mean by that?

“We formed Kissterra over eight years ago – the reason we choose to call it an ‘insurance marketing operating system’ is because we are kind of an umbrella, an end-to-end solution for all of an insurer's digital marketing and distribution needs. I think that 99% of innovation in the last couple of decades in insurance has been focused on risk – the accurate pricing of risk actuaries. Some people call this the ‘product side’ or ‘claims’, but this means that all of the new technology – all the advancements over the decades – have been aimed at making insurers better at assessing risk. For example ‘we can assess risk better because of this new device’ or ‘because of telematics’ or ‘because of satellite data’, and so on.

“But across the industry in the US, there is $140bn being spent on engagement and acquisition of customers every year. For insurance marketers, what is the big technological solution there? Where is that big tech leader that's going to connect all the pieces of the puzzle and drive better and smarter, more efficient marketing? That's even more important nowadays, where profitability is the most important word.

“It has been like that for decades, but over the last year and a half insurance carriers, especially in the property and casualty (P&C) verticals, and even more in auto, are really suffering in the battle for profitability because of the many regions coming out of COVID-19, alongside new regulatory issues, inflation, geopolitics – I could go on!

“The thing is everybody's trying to solve that by increasing prices. So how can you centralise your marketing and distribution digitally in one place, make it smarter, make it better, make it more efficient? The idea is to have ‘one ring to rule them all’ (if I can make a Lord of the Rings reference!), unlike before, when you needed to wake up in the morning, log in to 52 different platforms to even understand where your money is going and what you're getting in return. That is the future of insurance and that is what we designed Kissterra to do. An insurance marketing operating system, centralising organisational data to drive more efficient marketing and distribution.”

Q. Can you give our readers an example of the sort of data sources that marketers would be using instead of Kissterra? What systems are you replacing?

“Why is this important specifically for insurance? The reason it's important is because every one of your readers globally will understand that if both you and I walk into an auto insurance carrier with the same vehicle, same model, same type, same year, same mileage, same everything; we would still pay a completely different price for our monthly premium. Because obviously insurance is a product that is based on differentiation. You and I are not the same client, so we will not be paying for the same product right now.

“Now, let's consider a bottle of water instead. If you walk into a 7-Eleven, a bottle of water that costs me five dollars - how much is it going to cost you? It'll be the same price. That's a convenience store and 99% of e-commerce don't care if you're you or me. You'll pay the same price for that bottle of water. And that's why marketing for the e-commerce products in the world has worked the same way for the last century in terms of pricing – because they don't care who you are when it comes to setting the price. They want to increase conversion. They want more people to come. But they do not care if it's you or me. Coming back to insurance, you and I paying a completely different price for the same product means they should be marketed to be completely different, and that's where Kisstera comes in.”

“If an insurance company knows that we are not the same, why doesn't that data trickle down to marketing and make marketing smarter? Insurance carriers need that data of lifetime value of expected difference between customers to trickle down to marketing because you may be a bad driver with a history of DUIs and an SR-22, or you can be an amazing driver who's 65 years old and hasn't had an accident in the last 50 years. We should not market to each group in the same way as we're not going to be pricing the same way.

“At Kissterra we take all the organisational data that an insurer has been collecting, sometimes for more than a century, and we teach organisations, through the use of simple technology, to understand how to utilise that data into making better marketing.”

Q. Speaking of blanket communications versus personalisation – are insurers too reliant on linear TV?

“Of the top five advertisers on TV in the US, three of them are insurance carriers so you can understand how heavily insurance relies on TV. I'm not saying that they need to stop doing this, but they need to embed the data that they get from digital marketing towards TV. I can give you a very simple example; last month’s Super Bowl – always one of the biggest events on TV with $7m charged for a 30 second ad slot. Let's say you're an auto insurance carrier and you want to put out a commercial, you're going to be paying $7m just to air it. Forget about how much it costs to hire celebrities and pay for the creative and production.

“Now, let's say you want to put a car in your commercial. It's about auto insurance, so what kind of car would you put there? You're going to be paying $7m for people's attention so it needs to be right. You can go through the regular statistics that TV has, such as what kind of population watches the Super Bowl. Maybe more men? Maybe more on the East Coast? That's all generic information that doesn’t help determine what kind of car you are going to include in your advert. What colour is it? What type? How do you know if it should be black or white? All that information insurance carriers have within their databases. And all that information is free. It's your data. You don't need to pay anybody for it.

“If you use your marketing data smartly, you’ve just made that commercial 20 times more effective. Just think about what a simple example that is – then you can take that and multiply it by a thousand. Now you understand what zip codes you want to advertise on TV or radio, on what language towards it to use in the commercials, what visuals to show. Are your customers usually older or younger? Male or female? All this data will help you increase engagement, increase conversion, and more accurately measure the online and offline behaviour of your target audience.”

Q. What do you find are the main barriers to change for some of these legacy insurance companies? Why are they not taking full advantage of this wealth of first party data they have?

“Not moving is comfortable. It's just human nature and it has nothing to do with the insurance sector specifically. When a company gets to a certain size and a certain level of comfort, just moving in general is uncomfortable. Nobody wants their reality to shift amongst themselves, especially if you've been doing something successfully for 10, 20… 100 years! If you've been making money for 100 years then it's almost impossible to make you move anything. So they stick to TV, radio and sports advertisements; in stadium games have been working for carriers for fifty years.

“So you have departments of people that were grandfathered in by people that taught them how to do things exactly the way that they're doing them. But the beautiful thing about the world is that it's not staying still – they’ve had to move their product from agents to local shops to online and mobile. So your advertising needs to be mobile as well, because 90% of the people are now looking at their mobile phone. In this specific scenario, success becomes your achilles heel instead of becoming a consolidator – because if you weren't successful, then you'd be looking for things to change.”

Q. So with this innovation gap that you’ve described – are there disruptors in the insurance industry eating into the legacy insurers market share?

“Yes… and no! There was huge hype about insure-techs two years ago. But there's been a little hesitation today. This is because unlike a lot of other products, insurance is a product based on data. Data is the centre of insurance, no matter what department you use it in. Some of these newer carriers just didn't have a big enough data pool to be able to accurately run an insurance business. So yes, there's a lot of innovation, there's been a lot of forward thinking and new technologies are being handled – but the incumbents are still dominating.

“They understand that change is coming. But they're not under actual threat within the next five to 10 years. We all know what their names are and they're not really panicking about this. But there is a good kind of segue towards some new tactics and some new ways of thinking. The real battles are more amongst themselves with the legacy carriers competing against each other. The ones who can innovate faster are taking the market and are actually causing a lot of harm for the other ones. So that’s more about who can make their platform more digital, who can make their dark marketing more digital and direct. And that is a battle that's going on right now.”

Q. What does the future hold for marketing in the insurance industry?

“When we have this conversation in three to five years, insurance marketing is going to look completely different. It will be completely digital focused, mobile focused, data-centric focused. That nexus for three to five years doesn’t mean TV is going to disappear. But we're going to see a flipping of the paradigm, meaning instead of TV leading, digital is going to lead TV.

“All the data's going to come from digital and all TV campaigns are going to be based on digital. We even see State Farm, which was partnering with the NFL for the Super Bowl last month, deciding not to advertise during the game via a TV commercial, but to run a campaign on TikTok instead. Just think how groundbreaking that is in the sense of in three to five years, social and digital is going to lead. And TV, even though its tremendous budgets will remain, it's going to follow. The nexus is coming!”

Q. What role will the metaverse play in insurance marketing?

“I know that a lot of people are sceptical when it comes to the metaverse, but when you start talking about gaming and massive online multiplayer gaming, it suddenly becomes a very real thing that's already happening. With these new touchpoints you're going to see a new level of personalisation. All the large carriers are experimenting with that right now. They’re a little bit cautious – but TikTok was frowned upon too when it started out. And insurers are still experimenting with that platform, along with Snapchat.

“There's a huge tectonic shift towards those kinds of new social and digital ways to advertise because of the abundance and personalisation and data that is there. They've invested trillions of dollars or insane amounts in branding over the last 50 years. If you can shift that branding and instead of putting a sign in a football stadium or on a bus, it's on a virtual game, you can actually measure the amount of eyeballs looking at the advert. You can measure engagement clicks and sales. E-sports is going to start leading marketing for real sports, which has not been the case for the last 50 years. So if you are playing NBA2K, that marketing data and those audience insights are going to trickle down to the actual baseball or NBA court – not the other way around.

“Can you actually tell me, coming out of a football stadium, how many sales you got today by putting that half a million dollar banner up? We have no idea and neither does anybody else. It comes into these complicated attribution models ad agencies have been telling us about for six years saying ‘don’t worry about it’. No, in 2023, you do need to worry about it. It's not going to be okay. You need to worry about every dollar and every cent you spend. Where is it going, and what are you getting in return.”