Insurers may be mistaken in directing more of their B2C [business to consumer] advertising spend to digital media.

Consumers use websites to research insurance, but when it comes to buying and customer retention they also turn to the traditional channels of television advertising and personalised mail, new research shows.

Although the proportion of insurers’ marketing budgets going online is low compared with TV and radio, it is rising, while spending on letters mailed to customers is falling.

Australia Post commissioned the research across a range of industries, looking not only at the growing number of ways marketers can communicate with customers but also at how people want to hear from companies.

It has produced a 14-page report on insurance.

The research was conducted in conjunction with the Association for Data-driven Marketing and Advertising, which represents groups that use direct marketing.

Association CEO Jodie Sangster says the findings challenge marketers to think differently about the channels they use “and how they allocate their budgets”.

“The one-size-fits-all approach is the wrong way to tackle consumer-centric marketing. This survey shows marketing spend by channel in the insurance industry is out of sync with customers’ preferred channel choice.”

Australia Post Head of Enterprise Marketing Vera Skocic told insuranceNEWS.com.au that digital advertising is regarded as cheaper than traditional media “but our research has shown that there’s a vast difference between cheap and effective”.

She says marketers have begun to move more of their budgets from traditional media “but that doesn’t mean it translates in the minds of consumers when it comes to receiving messages. This is the first study to ask consumers how they’d like to receive messaging from marketers and resoundingly they said digital was not the way to reach them.”

Nielsen research shows that insurers spent $341.4 million on advertising last financial year, with $253.3 million going to television, $31 million to radio, $15.8 million to online media, $14.2 million to newspapers and $12.5 million to outdoor advertising.

Researchers asked consumers what channels they consider most useful when buying new cover, retaining cover, adding and switching. Websites are considered the most useful channel across all categories (the report did not differentiate between insurers’ own websites and comparators).

When considering buying new cover 65% use websites, 49% TV advertising and 42% personalised direct mail. Consumers could nominate more than one channel.

“While TV advertising can drive brand awareness, personalised direct mail gives marketers the opportunity to present their offer to target segments,” the report says.

“Both personalised direct mail and TV advertising can direct potential customers to the brand website for more detailed information and quotes.”

Although top channel preferences are consistent across demographic groups, variations further down can help marketers design multichannel mixes, it says.

Surprisingly, the top preferences including television and personalised mail are the same for younger people who have grown up in the digital world.

Under-25s are more likely to rate social media advertising as useful when considering buying insurance, with 14% nominating it compared with 7% of the total sample.

Ms Skocic says this is because TV, catalogues and flyers have been around longer and offer reassurance and credibility for people considering complicated transactions such as insurance. Printer matter gives them something tangible to refer to.

People aged over 50 are more likely to consider something in writing from their insurer as useful when making a decision about buying additional cover.

But while older consumers prefer traditional advertising, their ranking of websites in the top channels “suggests they are a tech-savvy audience”.

When it comes to making claims, consumers turn to websites and personalised mail.

“Putting claims process information online allows people to access it whenever they need to, and from any location,” the report says.

“Personalised direct mail with claims process details can be kept on file, or it can be used to follow up calls to the contact centres, providing claim-specific information and details.”

Ms Skocic says electronic mail is cheaper to send but easier to ignore.

“The study confirmed that people actually take in messaging from marketers far better when they’re holding something in their hands.”

Consumers also list TV advertising as useful because it often shows people calling their insurer to make a claim, which sends a message about simplicity.

“These findings suggest a mix of advertising channels, including digital and traditional media, is an effective way to provide Australians with the information they need to make an insurance-related purchase decision,” the report says.

The study, conducted last July by Quality Online Research, started with nine focus groups and then surveyed 9641 people nationally.

It found that across all industry sectors, six in 10 people are generally positive towards advertising and receptive to its messages.

About a quarter are ambivalent and often try to ignore ads, and about 15% have negative feelings, believing advertising is distracting and invasive or annoying.