expat marketing online advertising graph
Source: Interactive Ad Bureau; click to enlarge

Given it’s a new year we at Expat Marketing are looking ahead to major issues marketers will face over the next 12 months.

For private medical insurers there are plenty: a likely decline in the effectiveness of traditional display advertising, greater consumer focus on prices and, lastly, a need to more clearly differentiate their brands from the competition.

It used to be health insurance companies could basically throw up display ads and wait for customers to come to them–obviously that’s no longer true.

Allison Massey, Marketing & E-Commerce Director at NOW Health International, told us:

There’s been a huge shift in the way that users interact with the web in the last couple of years.  What’s clear is that the classic Display, PPC, SEO, EDM digital marketing model isn’t working to the same degree.

She sees 3 main reasons for this: 1) users are tired of Googling information and being bombarded by a stream of sales messages, 2)  they are less and less likely to fall for interruption techniques, and 3) many affiliate networks remain of dubious quality, at least for private medical insurance companies.

This matches what we’ve heard from other professionals in insurance and financial services, who argue that low-quality affiliates can actually undermine your marketing efforts. Even something as small as a Google Ad on a low-quality site can create a negative perception of your brand.

Recent online advertising statistics may also back Allison’s point. The Interactive Ad Bureau’s 1H2011 report found spending on display/banner advertising down slightly compared to 2010, though spending on search ads had increased. Spending on lead generation ads, however, had fallen steadily from about 8% in 2006 to 5% in 1H11. Sponsorships, too, were down slightly from their 2010 levels.

You can’t afford to hide behind display ads

In the year ahead, international insurers will also gave to contend with customers who are increasingly focused on price. This is not only the result of the sagging global economy, but also the launch of several aggregators allowing shoppers to easily compare costs across insurers, like Brokerfish.

According to Allison, both competitive pricing and the development of unique identities will be critical going forward:

[W]ith the advent of Twitter and review sites like reviewcentre.com, there’s nowhere to hide for insurance providers if a customer wants to make their feelings known.  For years and years, insurance brands have been hidden behind their intermediary network. While this channel of distribution will continue ad nauseum, I believe insurance providers will find themselves in front of the customer more and more.  This means that having a compelling and differentiating proposition will become more important than in previous years.

We’ve been flogging the importance of social media to death lately (let’s face it, so has everyone else), but the fact remains it is an important tool insurers can use to stand out. As Allison concluded:

Anyone who knows me will roll their eyes when they hear me banging on about capturing your customer base ‘high and  early.’ Essentially what I mean is that you need to be friends with your potential customer before they know they need you. I’ve read a lot of posts recently about whether or not social media can ever provide a revenue-generation channel.  My view is it’s got to be part of your mix–and if it’s combined with short and medium-term tactics, it should pay its way in the longer term.

I would be more than interested to learn where the drop in spendings on lead generation is coming from. On one hand, many companies targeting expats still believe they should only spend online on conversion based or direct sales activity (e.g. on lead generation, which is the most measurable of all). How does this fit together with these numbers?