Admiral car insurance shows great results, but the price comparison site subsidiary Confused.com relinquished its market leader position. Confused has seen a decline in market share and, more recently, in revenues, as the price comparison market becomes increasingly crowded.
Admiral group chief executive Henry Engelhardt described the performance of its online comparison arm as “not as strong” as the rest of the company’s results, with the firm fingering its ineffectual advertising campaign for being squeezed by its competitors. Confused reported a 10% plunge in revenue during the six months to June 30 and admitted that it had slipped to second in a market that depends heavily on advertising. The company has scaled back spending in the first half of the year in preparation for the launch of a new advertising campaign in the autumn in an attempt to gain back its market share, which by its own estimates has reduced from 32% in the first half of 2009 to 27% in the same period this year.
The most recent campaign showed customers revealing what they would have bought with money they could have saved by using the site. Admiral said: “The key factor behind the disappointing results [of Confused] was an unsuccessful TV advertising campaign which ran during the first half of the year. Success in price comparison depends heavily on marketing, predominantly television, with consumers responding to the best campaign.”
Competitors have reaped the rewards of stronger marketing performances, with rivals comparethemarket.com, money- supermarket.com and gocompare.com crediting strong advertising campaigns for increased revenues.
According to data from market analysts Mintel, £35m was spent by comparison sites in 2006 on advertising and that increased to £85m at the last count from research firm Nielsen in October 2009.
A campaign for Compare the Market fronted by aristocratic Russian meerkat Aleksandr Orlov has proved to be a cult hit, with the character amassing more than 748,000 fans on Facebook and more than 40,000 followers on Twitter. The company – based in Peterborough – has just released the final part of a trilogy of adverts about the background of the meerkat and his fledgling “meerkat comparison” business, documenting the humble roots of the aristocrat’s family stock.
Confused’s profits have since slipped from £37m in 2007 to £26m last year, with first-half results in 2008 of £16m, contrasting the near-£9m for the first half of 2010.
Consumer psychologist at the University of Glamorgan, Henry Enos, said that the highly-effective advertising campaigns of Confused’s competitors and competitive marketing from other direct insurers were most likely to be behind the site’s results.
“It is a highly competitive market and particularly so in insurance, where memory recall is so important for the brand – if you look at compare the market, you only need to mention meerkats to think of them and opera singers to think of Go Compare,” Mr Enos said.
“Coupled with a move towards consumers being encouraged to avoid comparison sites altogether – as with Direct Line – customer recall becomes more important, and advertising campaigns are more significant, so if the Confused campaign is less effective, others will take the lead.”
Home Uncategorized Insurance Advertisement Campaign : comparison sites struggle for effective advertisement
