GEICO and Helzberg Diamonds: A Match Made In…
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While we review a lot of auto insurer advertisements to make sure our TTAI faithful get the scoop about the actual products being offered, this post is a little different.
There is really no product information to dissect here. We all know GEICO can save us 15% in 15 minutes and they’re not really trying to push a new product here. Like most of their commercials, this one has nothing to do with insurance.
GEICO now wants us to “feel good” when we hear their name or see their branding anywhere. They’ve given up on talking about their product.
What Is Interesting
Co-op advertising has been around for a long time, so this is nothing new. In fact, Progressive Insurance did some co-op stuff a little while back. And how many times has Jerry Seinfeld offered a Snapple to guests in his apartment?
Why we do find this interesting is that the need to do co-op typically signals a weakness in the larger of the two advertiser’s finances. Don’t get us wrong, GEICO is part of Berkshire Hathaway (see Warren Buffett), so they are one of the largest and richest insurers on Planet Earth.
We’ll spare you the details of a 20,000 word essay on insurance pricing and just point out that GEICO is not the type of company that typically needs to lower their advertising costs.
In fact, they spend more money than anyone else on advertising according to the most recent information available.
At the end of the day, they have super cheap insurance premiums and insure millions of people. This is not a sustainable equation for long-term insurer profitability. You’ll have to take our word for that (or contact us by email for the 20,000 word explanation of why this is the case).
Ultimately, in order to continue to offer dirt cheap auto insurance to this many people, GEICO must find a way to cut expenses…enter Helzberg Diamonds, which is also owned by mighty Berkshire Hathaway.
The lowering of advertising costs is certainly a measure taken to “hold out” on raising premiums (and losing business from those whose only concern is lowest price).
Get used to it. Insurers are like dominoes. If one falls, they all follow suit.
If you consider sharing your multi-billion dollar Gecko’s spotlight with a jeweler as a “fall,” let it be said that you will soon see other insurers going this route.
Perhaps this is what the Mayans were referring to. We’re not sure.
Let’s just agree on this; if you see a State Farm commercial where they share the spotlight with Coca Cola, buy a gas generator and gold bars. The end is near! Oh and by the way, diamond rings need to be insured too, so the profit is never-ending in this equation.
Read more: The Progressive Box steals Flo’s spotlight.