Case Study #1

Like a good neighbor, State Farm is there.

The Red Mug Campaign The Art Institute of Fort Lauderdale Student AdFed Chapter I APRIL 2010

TABLE OF CONTENTS I. EXECUTIVE SUMMARY II. CREATIVE STRATEGY 1. Marketing Objective and Strategy 2. Financial Metric 3. Advertising Strategy 4. Creative Approach 5. Creative Execution

III. POSITIONING 1. Situation Analysis 2. Product Positioning Map 3. Brand Positioning Map 4. Target Market Analysis 5. SWOT Matrix 6. Primary Research 7. Synopsis

IV. IMC (INTEGRATION OF COMMUNICATION TOOLS) 1. Target Strategy 2. Geographic 3. Communication Vehicles 4. Internal Communication Plan

V. MEDIA EXPENDITURES VI. BUDGET

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THE ART INSTITUTE OF FORT LAUDERDALE STUDENT ADFED CHAPTER

AAF Student Chapter The Art Institute of Fort Lauderdale AAF Student Chapter is a collegiate organization formed to infiltrate the modern mundane mass media with new and inventive ideas adhering to the Client’s target objectives and goals as the utmost concern. We collaborate with our Clients to proficiently integrate innovative concepts by initiating, clarifying, and implementing the Client’s marketing and advertising campaigns effectively and efficiently. The Art Institute of Fort Lauderdale AAF Student Chapter is a universal assembly concentrated on building relationships and inducing knowledge to consumers.

ACCOUNT:

CREATIVE:

Katie Funk Holly Ficker Chelsie Nothaus Miriam Danell Angela Mena Joshua Cohen Joseph Menendez Diana Truong

Britina Lamas Hector Acevedo Sasha Beck Joshua Titus Jacqueline Villars Marc Charleston Brandon Coton

Greg Dubois Adriana Bonilla Ben Harris Luis Ochoa Natalia Caamal

I. EXECUTIVE SUMMARY

As the leading auto insurance company in the U.S., State Farm seeks to garner a leadership I. EXECUTIVE SUMMARY role with the underdeveloped 18-25 year old segment and increase the number of written insurance policies. Currently there are approximately 33 million young adults creating a valuable opportunity for State Farm to increase their overall share of market. While still maintaining a high percent of policy retention, State Farm will increase the number of written insurance policies within the target audience through the implementation of an integrated marketing campaign.

Young adults perceive State Farm as old fashioned, out of touch with their generation and a Brand for more established adults. Also, State Farm does not have an identity that young adults associate to the Brand. In order to re-position the Brand in the mind of young adults, State Farm must implemented an advertising strategy that creates brand affinity with the target, differentiation from competitors and top-of-mind awareness and consideration during the purchase situation. The main goals are to persuade young adults to think of State Farm as their first and best choice of insurance for them.

We are recommending a five-year integrated communications plan that will infiltrate the target market through unique advertising strategies. In the first year, the State Farm Brand will break down cultural barriers, connect with the desired target market, and overall increase their ROI through this campaign.

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II. CREATIVE STRATEGY 1. MARKETING OBJECTIVE AND STRATEGY A. Marketing Objectives

Our primary objective is to garner a leadership position in the young adult 18-25 segment of the market, comparable to State Farm’s 18.64%1 share of market in the automobile insurance industry at large.

The secondary objective is to increase the number of written renters insurance policies within this young adult target audience.

ANNUAL REVENUE PROJECTIONS: 5 YEAR INCREASE: Year I – 351,000 new policies (10% X 3.51MM) X $1,400 (average annual premium cost) $491,400,000 revenue

B. Marketing Strategy

Year II – 351,000 new policies (10% X 3.51MM) = 526,5003 policies (includes 50% retention or 175,500 policies from Year I) X $1,400 (average annual premium cost) $737,100,000 revenue

2. FINANCIAL METRIC

Year III – 438,751 new policies (12.5% X 3.51MM) = 702,0003 policies (includes 50% retention or 263,250policies from Year II) X $1,400 (average annual premium cost) $982,800,000 revenue

Investment spend and outpace the competition by implementing a relevant, innovative and motivating integrated campaign. In order to shift brand perception, expand brand awareness and build brand loyalty with this technologically savvy generation through the continuity of a five-year integrated marketing communications plan.

A. Business Goal

Currently, State Farm owns 18.64% of the overall auto insurance market, our goal is to increase the Young Adult market share from 8% to 18.64% or higher by May 2015.

[Plan conservatively assumes that as the market leader, State Farm currently owns an eight share of this under developed market; meaning 2.64MM of the 33MM young adults 18 to 25 population.] In 2010, the national average cost for an 18-25 year old, one year auto premium insurance policy, is approximately $1,566.2 The five-year plan must deliver 3.51MM new policies to achieve a 18.64% share or a total of 6.15MM polices in the 18 to 25 segment of the market.

Year IV – 526,500 new policies (15% X 3.51MM) = 877,5003 policies (includes 50% retention or 351,000 policies from Year III) X $1,400 (average annual premium cost) $1,228,500,000 revenue Year V – 614,250 new policies (17.5% X 3.51MM) = 1,053,0003 policies (includes 50% retention or 438,750 policies from Year IV) X $1,400 (average annual premium cost) $1,474,200,000 revenue 3. Based upon a conservative retention rate of 50%, which is well below State Farm’s current national retention rate of 72%.

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1. The Top 25 property/casualty market share . (2010, March 15). Retrieved from http://www.naic.org/research_home.htm 2. What is the Average car insurance for males and females from ages 18-25 married and single?. (2010, February 13). Retrieved from http://www.carinsurance.com/kb/content17532.aspx

II. CREATIVE STRATEGY 3. ADVERTISING STRATEGY A. Sensory Branding & Emotional Branding

Known as a multicultural and tech savvy driven market, young adults are the first generation for whom media, technology, socialization, advertising, community and personal perceptions are seamlessly integrated. We recommend a sensory and emotional branding strategy to target young adults. This allows the individual to experience the brand on a very personal level and to develop a one-on-one relationship with the brand while breaking down cultural differences.

ADVERTISING OBJECTIVES Build brand recognition Change perceptions Create brand salience

B. Rationale

Perceived as an old fashioned brand and out of touch with their generation, young adults do not identify with the State Farm Brand. This lack of brand affinity is leading to low top of mind awareness and low brand salience; therefore, State Farm is not part of their “consideration set” during the auto insurance purchase cycle.

Unlike other major competitors, State Farm does not have a brand identity that young adults relate to. The purpose of developing a relevant image for State Farm, is to encode the brand in the mind of young adults, to be later retrieved from memory; leading to consideration during the time of purchase. Creating brand salience that State Farm currently does not have. The adoption of a relevant brand identity will generate memorable communication elements, linkages and associations to the State Farm Brand in their mind.

C. Sensory Branding In today’s struggle for consumers attention, senses play a major role in life-style choices and brand selection. Through sensory components State Farm will create an individual brand experience that will subconsciously generate recognition and differentiation in the mind of young adults. Senses are always active, creating involuntary awareness and transcending cultural barriers. Sensory branding will allow State Farm to break through the advertising clutter and create a personal bond with this multi-cultural audience.

D. Emotional Branding Emotions can overrule logic, especially in a society that is densely cluttered by advertising.

Emotional Branding creates brand associations and will set State Farm’s tone allowing young adults to form their own perceptions and emotional attachments to the Brand and its services.

SENSORY AND EMOTIONAL BRANDING GOALS Make State Farm’s products an experience Transform State Farm’s brand honesty into trust Develop State Farm’s quality into preference Change State Farm’s identity into personality Turn State Farm services into a relationship

1. The Top 25 property/casualty market share . (2010, March 15). Retrieved from http://www.naic.org/research_home.htm

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2. What is the Average car insurance for males and females from ages 18-25 married and single?. (2010, February 13). Retrieved from http://www.carinsurance.com/kb/content17532.aspx

II. CREATIVE STRATEGY 4. CREATIVE APPROACH All creative elements have been designed to execute our recommended advertising strategy. With continuos repetition and consistent brand identity, the campaign will allow young adults to encode the State Farm Brand. With a recognized look and feel in their brain; the target will associate the campaign elements and link them to the Brand itself.

The measure of success for this campaign will be the call-to-action to encourage young adults to visit the micro site: www.StateFarm.com/redmug

All creative executions in the integrated communications mix will prominently feature the call-to-action.

The campaign will consistently feature five key elements: State Farm Agent, thematic message, call-to-action, color red and red mug. These elements will work together and stand by themselves while still being associated to the State Farm Brand.

The five essential elements:

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State Farm Agent:

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Message:

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Call-to-Action: www.statefarm.com/redmug

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Red Color:

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Red Mug:

The State Farm Agent will become the iconic image associated with the Brand. Used as the Brand’s spokesman to deliver the Brand message, the State Farm Agent’s personality will communicate the company’s values and reinforce the Brand positioning. Setting a realistic and witty tone, the agent will deliver the Brand’s message through an interrogatory campaign line: “How’s that protection plan working for you?”

By implementing the interrogatory campaign line: “How’s that protection plan working for you?” State Farm’s new message will initiate brand consideration and cause young adults to question their current insurance plan. The fear of the unknown protection among young adults is visually represented through the device of using familiar every day protection objects out of context, such as: bubble wrap, locks and mouse traps.

The purpose of the call-to-action is to engage young adults in the State Farm Brand message while generating measurable traffic into the micro site.

Compared to its three major competitors who have a blue logo, State Farm is the only insurance company with a red logo, therefore creating a visual brand differentiation. Red, being the most vibrant and compelling color in the spectrum, has high visibility and attracts immediate attention. Emotionally, red stimulates people to make quick decisions; transmits energy, power and courage1; and will make State Farm’s Brand stand out.

The red mug is a recognizable device symbolizing the State Farm Brand while serving as a memorable call-to-action for the micro site.

Research has shown that physical warmth, in this case the red mug, can make people perceive others as friendlier also causing people to be warmer and more trusting.2 The red mug will accentuate the energy of the entire campaign and will further contribute to the agent’s character by giving him human qualities and reinforce the color red.

1.Sawahata, Lesa, Eldridge, Kiki, Simmons, Christopher, Sutton, Tina, & Whelan, Bride. (2004). The Complete color harmony. Rockport Publishers.

2.TIERNEY, J. (2008). Heart-warming news on hot coffee. The New York Times, Retrieved from http://tierneylab.blogs.nytimes.com/2008/10/23/heart-warming-news-on-coffee/

II. CREATIVE STRATEGY 5. CREATIVE EXECUTION A. Print: Newspapers and Magazines

The overall concept of the campaign will be reinforced by introducing the State Farm Agent as the focal point of the print ads. The idea of the execution is to represent the problem through exaggerated and dramatic photographic images, addressing each main concern of the campaign: auto and renters. The State Farm agent will trigger brand consideration and offer the final solution: the callto-action •

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The campaign line remains true to the already established brand identity The image of the State Farm Agent holding the red mug, is inviting and reinforces the theme line: “How’s that protection plan working for you?”

The red bar is designed to reinforce the State Farm corporate color while drawing attention to the call-to-action The State Farm logo, fonts and tag line comply with the corporate guidelines

II. CREATIVE STRATEGY B. Out-of-Home

Billboard: Features the State Farm Agent and the campaign theme line with a strong call-to-action Bench: Features The State Farm Agent with relaxed and inviting body language displaying witty persona, designed to lead the eye to the call-to-action

Bus Shelters: The overall design incorporates all campaign elements drawing special attention to the call-to-action. The photographic image creates the illusion that the State Farm Agent is interacting with the target audience. His outreaching body language embraces State Farm’s Brand personality and uniquely leverages the corporate tag line: “Like a good neighbor, State Farm is there.”

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II. CREATIVE STRATEGY C. Television

During the commercial, the State Farm Agent represents the “good neighbor” State Farm’s Brand stands for. The ad depicts witty and relaxed personality will come out strongly and will set the overall humorous and realistic brand tone. During the commercial the five essential campaign elements are distinctively implemented.

VIDEO: We open on Actor 1 as he creates his own protection plan for his car with bubble wrap.

SFX: Tearing, popping, and plastic crunching.

VIDEO: State Farm Agent hovers over the camera and questions Actor 1...

SFX: Music abruptly ends with record scratch...

V/O: “So... How’s that protection working for you?”

SFX: Music cues to the raising of SFA eyebrows.

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VIDEO: Actor 1 is trapped inside his car by bubble wrap representing his protection plan he panics and nervously plans his escape.

SFX: Tearing & Popping, Music* under begins to fade up. (*David Holmes, Day Of...)

VIDEO: State Farm agent hands over his business card to Actor 1 giving him the solution: State Farm SFX: Music under. SUPER: statefarm.com/redmug V/O: “Visit StateFarm.com/redmug to find a protection plan that works for you.”

VIDEO: State Farm Agent observes Actor 1 attempting to escape the protection plan in a drastic fashion.

SFX: Grunts, Groans and Music* coordinates to his emergence out of the sunroof (*David Holmes, Day Of...)

SUPER: State Farm logo and corporate slogan. statefarm.com/redmug V/O: Like a good neighbor, State Farm is there.

II. CREATIVE STRATEGY D. Micro site

The red mug’s micro site layout is clean, user-friendly and uses colors that compliment the color red. All five elements are found throughout the micro site constantly reinforcing the thrust of the campaign.

The micro site’s home page design is geared to give special focus towards the viral and promotional events.

Permanent buttons for social media networks will be placed at the bottom of the page. The bottom search bar functions as a quote calculator and agent locator based on the user’s zip code.

The micro site includes simple intuitive navigation. The following describes the purpose of each button: •

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Home Mission Demolition: The campaign sponsored viral game. User will be able to play online and download the game’s smart phone application for free.

Contests: Will encourage user to interact with other users and participate in current promotions.

Events: User will be able to search for events based on their location.

Agent: Dedicated to our State Farm Agent, the page will include the agent’s biography and free downloads such as: screen savers, pictures, icons, among others.

How to save: Informational page on how to save with State Farm.

State Farm: will connect the red micro site to the official State Farm’s web site.

II. CREATIVE STRATEGY E. Mocumentaries - YouTube:

The YouTube mocumentaries will allow the target audience to interact with the State Farm campaign and Brand. Utilizing the campaign elements, the audience will engulf themselves by creating humorous scenarios about their own personal protection plan. Videos will be featured on the micro site and State Farm’s YouTube channel.

YouTube page

F. Social Networking Sites:

The agent’s Facebook profile will include his personal information and interesting facts; State Farm promotions, the red mug micro site and a link to real State Farm Agents on Facebook. The agents constant online presence will allow the target to create an emotional connection and identify with him.

His Twitter feed will follow him throughout the day and will tweet current promotions. As a two way communication street, social networking will allow the State Farm Brand to build a personal relationship with the target.

Facebook page

G. Web Banner

Reinforcing the overall campaign, the State Farm Agent will be the web banner’s focal point. The idea of the execution is to capture the interest of the target market’s attention through the tag line, which will direct the viewer to the call-to-action.

Twitter page

H. Online Radio

Internet radio allows messages to be delivered through multiple senses: sight and sound; making it more effective than traditional radio. State Farm’s online radio commercial will consist of the overall campaign message and the call-to-action in an audio and web banner format featuring the State Farm Agent.

Online radio and web banner

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II. CREATIVE STRATEGY I. Smart Phone Application

The smart phone application will have multiple new features such as: bill reminder, pay bill, add new policy and State Farm Agent locator based on zip code proximity. Users will also be able to contact their agent through facebook and twitter. It’s overall design will reiterate the campaign by incorporating all five elements.

J. Viral Video Game: Mission Demolition

The video game is designed to engage young adults with the State Farm Brand. Featured in the red mug micro site and other web sites, Mission Demolition is the campaign inspired viral game. The purpose of the game is to gain as many points as possible by collecting State Farm shaped coins and dodging damaging objects before the energy bar or fuel tank runs out.

The State Farm Agent will be incorporated into the game helping the user by providing hints and tips to successfully beat the game. Mission Demolition will also be available as a smart phone application.

Smart phone applications

K. Video Game

In-game advertisements will be strategically placed throughout selected games. Creative executions will include: bubble wrapped cars, billboards and State Farm posters, among others. Graphic elements will be implemented based on the theme of the video game.

Viral video game

In-Game Advertising / Playstation’s GT6

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II. CREATIVE STRATEGY L. Guerilla

The guerrilla tactic consists of three different areas: college campuses, concert sponsorship (Warped Tour), and public areas.

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College campus games: Visual focus will be all campaign elements but mostly the call-to-action. Each of these games involve students to interact and encourage them to engage in the brand.

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Public areas: All installations will be designed to be shocking and attract the attention of passer by such as a bubble wrapped car. Each will have a red colored sign with a printed call-to-action and State Farm logo.

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Wrap Tour: Through sponsorship State Farm will have its own branded Warped Tour stage. In addition to the stage sponsorship, State Farm will also have a vendor space where giveaways will be passed out.

M. Promotions

The campaign will consist of several different promotions and contests, many of which coincide with guerilla events.

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Giveaways: These will be passed out at college campuses and Warped Tour. All of the giveaways will feature either the State Farm Agent or the red mug and will include the call-to-action.

Promotions: Get five friends to switch and get a free month coverage Contests: Viral video contest with YouTube and mall car giveaway

HOW’S THAT PROTECTION

HOW’S THAT PROTECTI ON

PLAN WORKING

PLAN WORKING

FOR YO U?

statefarm.com/redmug

HOW’S THAT PROTECTION

PLAN WORKING

FOR YO U?

FOR YO U ?

statefarm.com/redmug

statefarm.com/redmug

Mouse Trap

Coffee Mug

Pad Lock Give-aways

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Guerilla

III. POSITIONING 1. SITUATION

ANALYSIS

A. The Market

The Insurance Industry is highly competitive characterized by intense advertising pressure promoting brand switching through low price points and service features. Key competitors fight for market share to differentiate their brands employing campaign themes and devices to reinforce their brand positioning.

As the leader in the category, State Farm seeks to retain current policies and create incremental growth by capturing a share of the under developed 33MM young adult segment of the market. Even though State Farm is considered a well known and aspirational company among young adults, they perceive it as an older brand for their parents and do not understand the value of the Brand nor the agent based model.

Young Adults represent a growing market and an opportunity for State Farm to increase its core business. State Farm’s competitive edge lies in bringing the brand to life by utilizing sensory and emotional strategies. This will reposition the Brand and will help young adults understand the value of the Brand and the agent based model.

B. Competitive Analysis

While State Farm is the category leader within an 18.64% share of market, it does not have a clear, discernible brand perception with young adults. This point is dramatized by the fact that Geico is perceived as the #1 insurance company among young adults through its strong advertising presence using multiple campaigns running simultaneously such as: the “Gecko”, “Caveman”, “Kash” and celebrity spokesperson ‘Does switching to Geico really save you 15% or more on car insurance?’ Similarly Progressive is perceived as #2 insurance company by young adults due to four major factors: the convenience of the direct sale business model making insurance “tangible” through use of packaging in a sales environment; the likability and approachability of Flo also coupled with strong advertising presence. Although Allstate is ranked #2 overall in the insurance category their consistent use of the spokesperson is perceived as an authoritative figure which does not resonate with the young adult segment of the market.

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III. POSITIONING 2. PRODUCT POSITIONING MAP Business Models - Agent versus Direct

Young adults prefer to conduct business online and perceive State Farm’s agent based model as more time consuming and less convenient. The target values convenience over personal customer service. By conducting business through new technologies such as social networking sites; State Farm will re-position the agent based model among young adults as not only fast and convenient but personable.

PRESENT

FUTURE

Personal customer service

Personal customer service

Conduct business through popular media platforms

Conduct business primarly in person or over the phone

Conduct business primarly in person or over the phone

Conduct business through popular media platforms

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R

Impersonal customer service

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Impersonal customer service

III. POSITIONING 3. BRAND POSITIONING MAP Brand Perception and Identity

The lack of a consistent and clear brand identity for State Farm has led to no brand salience among young adults. With no tangible image, the young adults mind set perceives State Farm as out of touch with their generation leading to no top of mind awareness for the State Farm Brand. A consistent and clear brand identity will help State Farm build differentiation among competitors and engrave a brand image in the young adults mind; creating top of mind awareness and brand salience for State Farm.

PRESENT

FUTURE

In touch with the young adult generation

In touch with the young adult generation

R R

Confusing or non-existent brand identity

Consistent and clear brand identity

Out of touch with the young adult generation

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Confusing or non-existent brand identity

Consistent and clear brand identity

Out of touch with the young adult generation

III. POSITIONING 4. TARGET MARKET ANALYSIS

Demographics

Psycho graphics

Geographic

Age: 18-25 Gender: Male – 49% Female – 51% Occupation: Over 60% are college students Work force: Full time jobs – 44% Part-time jobs – 26% Education: 60% are either Undergraduate or Graduate Students

18-19 Years old 48.6% College undergraduate or graduate program

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Most Populated Country Region for Young Adults

20-21 Years old 48.5% College undergraduate or graduate program People in school and working Part time – 19% Full time – 12% Ethnicity: All ethnicity’s - multicultural.

Income: Average salary $30,000 a year

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Ethnically diverse and technologically savvy Shares social and cultural openness Tend to be optimistic, self-confident, team-spirited and hard-wired to electronic multitasking Lifestyle choices are important from shoelace color to career path.

Cash-crunched by education expenses, entry-level jobs, consumer debt, and the occasional child Prefer visual and digital over print media.

Enjoy engaging entertainment, socializing and sharing experiences, as well as values.

Tolerates advertising as long as it is relevant, entertaining & cool More open than other age groups to watch advertising, especially when ads are paired with or embedded in the video clip Expects advertising to be entertaining First generation fully connected to the Internet, cell phones, video cameras and instant communication.

89% use the Internet, 70% have their own home computer and 73% have used the Internet in the last 30 days.

Video consumption and creation, both personal and commercial, are increasingly popular.

40% more likely than the adult average to own or play video game systems.

Over 29% visited YouTube in the last month.

Southern region of the United States Top 10 residential young adult population estimates in order by city size

Houston-Baytown-Sugar Land 16.3% Los Angeles-Long Beach-Santa Ana 16.3% Chicago-Naperville-Joliet 16.0% Dallas-Ft. Worth-Arlington 15.6% Atlanta-Sandy Springs-Marietta15.5% Boston-Cambridge-Quincy 15.4% Washington-Arlington-Alexandria 14.7% New York-Northern New Jersey-Long Island 13.7% Miami-Ft. Lauderdale-MiamiBeach12.3% Philadelphia-Camden-Wilmington 11.3%

(By Metropolitan Statistical Area)

1. Yan, Sophia. “The Oberlin Review.” Understanding Genreation Y. 12/08/2006. Web. 11/20/2009. <http://www.oberlin.edu/stupub/ocreview/2006/12/08/features/Understanding_Generation_Y.html>.

2.“A Portrait of “Generation Next”.” How Young People View Their Lives, Futures and Politics. 01/09/2007. Web. 11/20/2009. <http://people-press.org/report/300/>.

3. “THE U.S. COLLEGE MARKET April 2001 .” Marketresearch.com. New York, NY: KALORAMA INFORMATION, LLC. , 2001. Web. <http://academic.marketresearch.com/product/display.asp?product id=261605&curl=&surl=%2Fsearch%2Fresults.asp%3Fqtype%3D2%26prid%3D913491912%26title%3DCollege%2BLife%26publisher%3D%26query%3D%26datepub%3D0%26categoryID%3D 0%26submit1%3DSearch&prid=913491912>.

4. Bergman, Susan. “The Adults of Generation Y in the U.S..” Hitting the Demographic, Lifestyle and Marketing Mark (2008): 1-306. Web. 11 Dec 2009.

III. POSITIONING 5. SWOT MATRIX STRENGTHS – S • Owns largest share of market in the auto Insurance industry • High retention rate • Perceived as a well known and aspirational company • Conducts business through the agent based model • Offers more personalized services than direct model companies

WEAKNESSES – W • Brand is perceived as old fashioned and out of touch with the young adult generation • Brand identity is either non-existent or “not for me” in the target’s mind • Has no consistency and brand influence in advertising, based upon previous campaigns targeted to young adults • Has low brand salience among young adults • Young adults don’t value the benefit of State Farm’s agent based model • Compared to competitors State Farm has no online presence within the target

OPPORTUNITIES – O • Auto Insurance is required in most of the states • Approximately 33 million young adults are looking to buy auto insurance • Young adults are a technology driven generation and “live” on the Internet • The Internet has become a popular way to do business

SO – STRATEGIES • Take advantage of the young adult market to increase market share (S1,O1,O2) • Retain current policy holders (S2,O1) • Offer the agent based model online (S4,S5,O3,O4) • Encourage State Farm agents to learn how to communicate with young adults through popular mediums (S3, S4,S5,O3)

WO – STRATEGIES • Reposition State Farm among young adults as an upto-date company that is easy to do business with and offers services that will benefit them (W1,W2,O1,O2) • Create a consistent brand identity that appeals to young adults (W1,W2,W3,W4,O1,O2) • Gain presence and awareness among young adults via the internet and new communication vehicles (W1,W4,W6,O3,O4)

THREATS - T • The insurance industry is extremely competitive • The advertising world is very cluttered • Young adults have very little interest in insurance • Young adults are extremely budget conscious and don’t want to spend money to prepare for the unexpected • Other insurance companies such as Geico and Progressive have better brand salience among young adults • Young adults prefer conducting business online than through personal contact • Companies with direct models have become a significant force in the industry

ST- STRATEGIES • Change the perception that the agent based model can only be conducted through personal contact (S4,S5,T6) • State Farm’s agent based model can be fast and can be applied through the internet and other technology platforms (S4,S5,T6) • Maintain State Farm’s current share of market and increase its share of voice within the young adult market (S1, T1, T7,)

WT- STRATEGIES • Create a clear brand identity that builds differentiation from competitors (W3,T1,T2,T5) • Communicate the importance of insurance to young adults (W1,W4,T3,T4) • Advertise promotions and all available discounts effectively to young adults (W1,T2, T4) • Persuade young adults to value the guidance of a State Farm agent when compared to other competitors (W4, W5, T1, T5, T7)

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III. POSITIONING 6. PRIMARY RESEARCH

586 SURVEYS

Two quantitative surveys were conducted to find out how the target audience pays for auto insurance, what type of advertisements they like and what the State Farm Agent should look and act like.

Survey #1

A questionnaire survey was handed out to 18-25 year old. The survey was conducted at The Art Institute of Fort Lauderdale and had a total of 121 participants. From the participants 60% were female and 40% male. More than 70% of the ages were in-between the ages of 20-23.

MEDIA On a daily basis, 33% of the participants watch two to four hours of television and 66% of the participants used cable instead of other mediums. MTV, FOX, and E! were among the popular channels among the surveyors. 77% of the participants do not purchase national newspapers and 40% of the participants described Internet as the primary medium for news. Gossip and fashion magazines were the most popular among females.

INSURANCE Recalling advertisements was a key factor of this survey. Car insurance advertisements were recollected by 17% of the respondents.

Humor was the main factor behind the ads recalled.

AGENT The majority of the participants favored a male Caucasian with a stylish appearance. The majority preferred an agent between the ages 24-29. Based on the results young adults prefer an agent similar to themselves, and with a witty personality they can relate with.

COLOR The majority of the participants associated the color red with State Farm and the color blue to auto insurance as a whole.

Survey #2

In order to obtain more information on how the target audience pays for their car insurance, surveys were conducted through two vehicles including a questionnaire style survey and an online survey conducted through survey monkey and Facebook.

The combined results of the second s show that 47.5% of young adults are between 23-25 and pay for their own auto insurance; while 52.5% of young adults that are between 18-22 have their auto insurance paid by an outside source.

The target audience that has their auto insurance paid by an outsider are the influencers, and the target that pays their own auto insurance are the decision makers. Influencers must be incorporated into State Farm at this early stage of life to gain top of mind awareness when later purchasing their own auto insurance plan. Decision makers are more price conscious therefore must be advertised promotions and current discountâ&#x20AC;&#x2122;s.

State Farm will acquire and retain both age groups through sensory and emotional branding by placing advertising through mediums that appeal to each: influencers and decisions makers.

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III. POSITIONING 7. SYNOPSIS Although State Farm is already a strong brand, the 18 to 25 year old target market is a highly competitive target market among insurers. This target market is very hands on and technologically advanced. State Farm can use this knowledge to gain the upper hand in the market by becoming more in tuned with the interactive web and social media sites. Our research shows that the target market responds to witty humor.

Young adults are more likely to adopt a habit or product if it has been tailored to them. In addition our research showed that there is a buyers gap in the target market, although 23 to 25 year olds generally buy their own insurance, 18 to 22 year olds are more likely to rely on a secondary party to pay for their insurance. The red mug campaign is designed to effectively increase brand positioning as well as product positioning. Leading to a gain in State Farmâ&#x20AC;&#x2122;s share of the target market.

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IV. IMC (INTEGRATION OF COMMUNICATION TOOLS) 1. TARGET STRATEGY The target market has been divided in two different segments: influencers college students 18-21; and decision makers 21-25. To appeal to both segments of the target, an integrated marketing communications campaign will be implemented to pre-dispose and encourage the target audience to action. As the main metric of the campaign, the call-to-action will generate traffic into the micro site: StateFarm.com/redmug. This traffic will be converted to written policies.

As outlined in our financial performance section detailed above, our forecast for Year 1 is to generate 351,000 new policies written. In order to achieve this financial objective we will need to generate 700,000 unique visits to the micro site in Year 1.

2. GEOGRAPHICS The following map illustrates all geographic areas that have been selected to advertise and conduct the campaign. Based on reach, the top 10 student body colleges in the United States and the primary geographical areas where the demographic resides were selected. A list of 15 colleges covering the top 10 school sizes and geographical areas has been compiled. In addition, a partnership has been established with a nationally traveling concert festival known as Warped Tour.

• White – Warped Tour Locations • Red – College Newspapers • Green - Top Target Market Cities

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1. Cosmopolitan media kit. ((2009)). Retrieved from http://www.cosmomediakit.com/r5/home.asp

IV. IMC (INTEGRATION OF COMMUNICATION TOOLS) 2. COMMUNICATION VEHICLES A. Print:

Magazines: Tactics: • Ads will be placed for both segments of influencers and decision-makers in mainstream lifestylepublications such as: Cosmopolitan for women and Maxim for men because of editorial content,circulation and pass along readership • A nine-month schedule is recommended using full page/four-color units in Maxim and Cosmopolitan in order to generate reach and frequency of message delivery to the target audience • Cosmopolitan and Maxim will focus on both auto and renters insurance since the majority of readers are influencers and decisionmakers in the purchase cycle • Ads will be targeted at influencers in affinity publications or “Buff Books” such as: Transworld Skateboarding, Snowboarding, and Surf. These titles were selected based on their relevancy to influencers who are starting to define themselves as independent adults • The ads in the three Transworld magazines will be printed full page/four-color units for twelve months to hit the influencers • The ads in the three Transworld magazines will focus on auto insurance Rationale • 33% of Cosmopolitan readers are between the ages of 18-24 with a mean reading time of 71 minutes • Cosmopolitan is the highest read top female magazine • According to College Store Executive, the national news magazine of the college store industry, Cosmopolitan is the best-selling magazine in college bookstores for 25 years1 • 25% of all Maxim readers are between the ages of 18-24. This magazine has a great potential to reach the decision makers, which can build brand salience • The three Transworld magazines capture 20% of the 18-24 year old readers

College Newspapers:

Tactics: • Newspapers were selected based on the top 10 student body colleges and the top 10 geographic areas • College Newspapers (both offline and online versions) effectively reach young adults 18-23 and have high viewership and high pass along readership • Auto insurance ads will be placed in high commuter schools and renter’s insurance ads in large cities that have a low driving rate. Auto and Renter’s insurance ads will be placed in school’s where students drive and rent • State Farm will advertise weekly in 14 college newspapers. A half page/four-color ad will be scheduled in each weekly newspaper. In addition, the first week of each semester a full-page/four-color ad will be scheduled in special editions. A total of 480 print ads will be placed in both regular and special issues • The offline schedule will be augmented by companion ads placed on the online version of the newspapers

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IV. IMC (INTEGRATION OF COMMUNICATION TOOLS) Rationale • This schedule will reach over 656,000 students weekly. Based on the overall cost of the schedule the average cost per student is of $1.27 (this does not include incremental impressions with faculty, staff, and perspective students)

B. Out-of-Home

Tactics: • Consisting of billboards, public benches and bus shelters the out-of-home advertising will be strategically placed near commuter colleges and areas with a large target market population. Each of these ads will be consistent with the overall campaign and further reinforce State Farm’s branding, and importantly, direct traffic to the micro site.

Rationale • Each ad will be strategically geo-targeted in the top 10 target market locations as well as large schools with

commuter populations such as: Miami Dade College1

C. Television:

Tactics • State Farm will advertise on TV and Web TV. The campaign: :60 TV Spot will be aired on popular channels among young adults such as: Adult Swim, SPIKE TV and MTV. The: 60 TV Spot will also placed thru Web TV on ABC, CBS, NBC, CWTV, MTV during popular, prime-time shows. The spot will be also placed thru online television sites such as: Hulu targeting the highest rated television shows being watched by the target audience.

Rationale • Adult Swim 83.5% of the overall target audience are young male adults between the ages of 18-25. Spike TV 83.5% is targeting towards “young adult males”. 45% of the people watching Spike TV are women that are watching it together with a male partner or family member.

Spike TV is available in 96.1 million homes in USA. MTV 83.4% of the overall target audience are young adults that are watching MTV. Of the different television channels that the target market watches Adult Swim during, the, SPIKE TV, and MTV has the highest viewership percentage among young adults. As the television market is changing, online television viewership is increasing. The cost to place advertisements on prime time shows online will be more cost effective, yet cost still remains lower than traditional TV. The main focus will be on online television because it reaches more of the target market for less.

D. Micro site: StateFarm.com/redmug Tactics: • •

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The State Farm micro site is the centerpiece of the “How’s that protection plan working for you?” Campaign.

The micro site is the key success metric for the campaign. All ads in every communication channel will prominently feature the call-toaction encouraging the target to visit the micro site.

1. Garrett, L. (2006, October 2). TOP 10 Colleges in America: Ranked According to Total Student Population (The BIG 10). Retrieved March 30, 2010, from http://ezinearticles.com/?TOP- 10Colleges- in- America:- Ranked-­According- to- Total- Student- Population- (The- BIG- 10)&id=316056

IV. IMC (INTEGRATION OF COMMUNICATION TOOLS) •

In addition to the design of the web site’s agent page has been search engine optimized for seven different keywords. The seven keywords chosen were the top ranking keywords found while doing keyword research. This search engine optimization insures that with each of those 7 keywords both the State Farm home site and the micro site will show up in the search engines natural listings, doubling the chances of the searcher landing on State Farm’s site.

Rationale: • The micro site is trackable and allows State Farm to measure unique hits. Moreover, State Farm will be

able to measure conversion of written policies generated from the micro site.

E. Digital:

The 18-25 year old is very receptive to digital advertising since the target has a propensity to spend a great deal of time online and as previously stated are technologically savy. Specifically, 89% of young adults use the Internet, 70% have their own home computer and 73% have used the Internet in the last 30 days.

YouTube – Mocumentaries: Millions of videos are viewed everyday on YouTube, every minute 20 hours of video is uploaded to the site State Farm will sponsor a nationwide competition that will be themed as a mocumentary on You Tube. Users can create a video, then post the video on You Tube, and compete for prizes for the best video. The most voted video will be featured in the red mug micro site.

Social Networking Web sites: The State Farm Agent will have an active Facebook and Twitter profile interacting with current and future customers. The State Farm Agent’s page will include special offers and upcoming events accessible for consumers.

Mobile: Smart phone users will have the ability to access the State Farm’s application from their mobile phone. Smart phone users will have the option to locate a State Farm office, review their policy information, or add additional policies to their plan through their phone.

F. Online Display Ads:

Tactics: • The young adult target market spends the majority of their time surfing the web. Web banners provide another point of contact for the young adult market to be reminded of the campaign and encourage them to visit the micro site.

Rationale: • The young adult market visits a variety of web sites incluiding celebrity blog sites such as: E! Entertainment, Perez Hilton, Cosmopolitan, and Buzz Entertainment are widely popular among females of this demographic.

• Heavy traffic on each of these sites will further State Farm’s brand awareness, as well as create traffic for the micro site

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IV. IMC (INTEGRATION OF COMMUNICATION TOOLS) G. Online Radio

Tactics: • The schedule will include a strong presence of :15 units on Pandora, the largest online radio web site for young adults with over 40 million user accounts and 44% of the Internet radio listeners. Pandora also has a very successful smart phone application, with 10 million active users. Allowing a sizable number of the target market will be exposed to the ad placements.

• Online radio will generate frequency of message delivery in a popular medium with this target audience; thus

enabling State Farm to create affinity with young adults by gently penetrating the fabric of their lives.

Rationale • Pandora requires users to register basic information before use; providing the opportunity to target ads tospecific demographic groups.

H. Viral Video Game - Mission Demolition:

Tactics: • In order to extend reach, Mission Demolition will be available on the micro site, the State Farm Agent’s Facebook and free gaming sites such as: Addictinggames.com, Candystand.com, Pogo.com, and Adultswim.com.

• Mission demolition will also be available as a free smart phone application.

• The viral video game will feature the State Farm Agent who will aid gamers through each level of the game. Players compete against one another acquiring State Farm incentive points and can enter themselves in drawings for prizes such as: Warped Tour tickets, current promotions and game expansion packages.

Rationale • State Farm will be able to drive traffic to the micro site through a plurality of interactive and relevant communication channels

I. Video Games:

Tactics: • Video games with State Farm in-game advertising will include: NBA 2k11, Madden 2011, Forza Motorsport 3, Gran Turismo 5, Need for Speed Shift and Nitro.

• State Farm will sponsor expansion packages for some of these games. Expansion packages will exclusively be available on the State Farm micro site and will be promoted through social networking sites and in-store point-of-sale materials • Games were chosen based on popularity among the target as well as theme.

Rationale • According to DFC Intelligence, over 40% of U.S. households own a video game console system, and more than 120 million people regularly play video games on their PC or on a console1 • Young adults are avid online video gamers and according to articlebase.com, the majority of people who play video games regularly are 18-35 years of age.

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1. http://www.mediacontacts.com/images/common/mc-insight/mc_insight_advergaming.pdf

IV. IMC (INTEGRATION OF COMMUNICATION TOOLS) J. Guerilla:

Guerilla tactics will be used as an intrusive medium to intersect with prime prospects. Specifically, dimensional spectaculars, Zorbing Balls and Warped Tour co-sponsorships on selected college campuses.

College Campus Events: College campus activities and events will interact with current and future customers, during peak traffic hours of students.

Dimensional Spectaculars: Bubble wrapped cars will be strategically placed on selected college campuses with attending Street Teams engaging students while distributing handouts and giveaways suggesting students visit the State Farm micro site.

Other Events: • Bubble wrap darts contest • Zorbing balls (human sized hamster balls • Sumo wrestling suits • Red rock climbing wall (only the red rocks contain grip) • Giveaways Branded Giveaways: All promotional items will include the call to action: www.StateFarm.com/redmug, to prompt attendees to visit the State Farm micro site. The young adult target market enjoys receiving complimentary giveaways; this will promote State Farm brand awareness and brand likability. In addition, all of the giveaways have been strategically chosen because they are useful to the target market and fit with the campaign theme.

The promotional items include: • Red mugs • Red mug flash drive • Stickers • Mouse pad • T-shirts • Beach balls • Bike locks Concert Co-Sponsorships - Warped Tour As a popular concert festival, Warped Tour travels nationally across the country during summer and is popular within the target market.

Each concert location will feature a State Farm sponsored stage; as well as, a 10x20 vendor booth along with State Farm representatives, distributing product literature, giveaways suggesting attendees visit the State Farm micro site.

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IV. IMC (INTEGRATION OF COMMUNICATION TOOLS) K. Promotions

Tactics: • Expansion packages – Located on the State Farm micro site, expansion packages will be offered to gamers to enhance game play.

• Exceptional student rewards – Complimentary Warped Tour tickets will be given to students who perform at high levels in the classroom, by submitting final grades through the micro site to be evaluated.

Rationale: • Promotions will be offered to the target market to create a stronger awareness and likability in the State Farm brand. The promotions available will act as a lure for the micro site, by visibly including the call-to-action to all promotional materials.

3. INTERNAL COMMUNICATION PLAN In order to contact current and prospective young adults policy holders; State Farm will implement new communication tools through social networking sites. An e-blast will be sent out down the chain of command to inform the agents how to utilize the platforms: Facebook and Twitter. The agents will first attend a mandatory webinar to explain how these sites work and what are the guidelines and supporting policies. Some of the policies are the following: The agents must be on the social networking sites through out the day for a minimum of four hours.

• • • • • •

If currently working with another client on the phone or in-person, agent then must take the chat status to invisible The agents must post daily on both platforms When an event is happening in a geographic area where the State Farm agent works, they must post the events information Agent must post upcoming promotions and discount information All agents must fan and follow the “State Farm Agent” spokesperson Agent must post their contact information on the “State Farm Agent” fan page

An e-blast will be sent out to current State Farm policy holders in this demographic inviting them to communicate with their agents on Facebook and Twitter.

It is important to tap into the social networking web sites because of the popularity it has for 18-25 year olds. Using Facebook and Twitter to communicate to the target market will give State Farm a chance to look up-to-date and not old fashioned to the target market. This target market spends numerous amounts of time communicating through Facebook and Twitter; State Farm will have the opportunity to connect with more potential customers than they can through walk-ins. This communications route will ensure that State Farm reaches 18-25 year olds at the masses; and moreover, build a strong relationship using means, which are popular for this age group.

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V. MEDIA EXPENDITURES

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V. BUDGET

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V. BUDGET

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“So, how’s that Plans Book working out for you?”

The Art Institute of Fort Lauderdale Student AdFed Chapter