Blessed be UK consumers; when it comes to saving a bob on insurance we are spoiled for choice. There's excruciating hand-drawn crazy man (Confused.com), bewildering Meerkats (CompareTheMarket.com), a grindingly-ubiquitous tenor (GoCompare.com) and, depressingly, middle class boring (MoneySupermarket.com and Tescocompare.com). That's hardly the full list, but it's enough.
The credit crunch ensured push did come to shove, brands had to go for broke to stave off competition and consolidation. CompareTheMarket.com, for example, needed a game changer against the leader GoCompare.com and found salvation in the form of an endearingly-preposterous Aleksandr, earning a fistful of 'Campaign of the Year' gongs.
The game was well and truly on.
The Next ChallengeThe market will never get less competitive, but the strategic objectives will need to evolve.
The players have spent millions both surviving and positioning themselves for the next phase of the game, a period likely to be defined by how each tackles their definitive commerical challenge - growth.
After all, there are only so many times one can save £600 on their insurance purchase; online comparison web sites are the epitome of the law of diminishing returns.
It is around this objective each will compete, but other challenges will also feature in the year ahead.
- Mature, but commoditised approach. Like it or not, insurance products are becoming more and more commoditised. To date, price alone has been a driving factor; for the reasons stated above, price differention on its own may not be enough for consumers to decide between competing products. We will need a quality vector too, a challenge which remains elusive because of confusing (and even cyncial) offerings in the market.
- Experience-led differentiation. With message-led advertising crowing about site usability, Confused.com has already signaled the shift away from pure-price differentation, although it still remains the headline message in their adverts. This seems the likely next battleground, as well as delivering comparison technology on mobile devices.
- The 800-pound gorillas. Without doubt, the spectre of hyper-competition looms large over the industry with serious heavyweights Tesco and Google poised to make a move. Tesco has already started in car insurance and Google is testing the waters. Deep pockets alone make them potentially formidible challengers.
You may find it irritating, but it's likely the media agencies for each brand will wring every last dime out of the existing creative execution and make it through the World Cup and summer without heavy investment.
We're clearly reaching the end of the natural lifecycle of some undeniably effective advertising, spots which genuinely defined an era for the industry. Who knows what may come next? Maybe one day you'll recall fondly the days of adorable meerkats and obnoxious opera singers. Maybe.
This post was written in conjunction with cross-posting at insurance industry buckaneers Insiders View.