Health insurance ads undergoing a makeover

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It might not be long until the squawking ducks and funny cavemen are trying to sell you a health insurance policy.

'Fifteen years ago, would you have imagined a talking gecko selling you [auto] insurance?' asked Brian Wieser, senior analyst at Pivotal Research Group, an Oregon marketing agency. 'So there you go.'

The health insurance market will soon come to resemble the home and auto insurance markets -- more ads, with a variety of different tones, all trying to speak directly to the buyer. As a result, Aetna Inc. CEO Mark Bertolini told the Wall Street Journal last week that 'we want to [spend] significantly more on consumer advertising.'

Other health insurers will follow suit, or are already doing so, hoping to reach the 75 million retail purchasers of health insurance expected to be shopping for policies by 2020, as the industry shifts slowly away from group markets, he said. WellPoint Inc., for example, spent $100 million in the closing weeks of 2013 on TV, social media and print ads.

That's why TV executives in particular are forecasting an ad-buying bonanza over the next several years. Up to $1 billion might be spent through 2015 on TV ads related to the 2010 Affordable Care Act, a law that requires the uninsured to buy a policy from a private insurer, if they are ineligible for government insurance.

Most of that $1 billion will be spent in local markets, rather than during national airtime. Meaning that local affiliates of the major networks stand to gain the most from the coming ad blitz. Outside the largest players such as Aetna and UnitedHealth, Most insurance companies are regional, or even state-based, and have no reason to advertise nationally, said Scott Roskowski, senior vice president of marketing at TVB, a New York media company.

'We see this as a long term revenue stream and growth' for local TV affiliates through 2020, he said. If health insurers see -- as now predicted -- $350 billion in new revenue via the Affordable Care Act over the next seven years, and spend just a fraction of that on advertising, it's still worth billions to network affiliates and local cable.

'We knew that this was going to be big' right after the U.S Supreme Court upheld the Affordable Care Act, Mr. Roskowski said.

As health insurance becomes more of a retail experience, the carriers will have to market more heavily to the patient, rather than to the employers, which -- for now -- still provide health benefits for the bulk of under-65 Americans. That means the tenor of the ads will change, too, away from the generic 'branding' ads that you see now.

We're going to see a 'morphing of traditional brand advertisement,' toward ads that push consumers to action, said Lindsay Resnick, chief marketing officer for KBM Group's health services line, based in Texas. Some of those will target specific age or ethnic groups; some will be serious, others might be funny.

'If you take a sampling from some of the state-run exchanges, [many] of them have been trying to target a younger demographic,' he said.

In Colorado, for example, the 'Got insurance?' social media ad campaign featured a number of funny, even risque images: In one, a young woman holds a packet of birth control pills, standing next to a young man. 'My health insurance covers the pill, which means all I have to worry about is getting him between the covers,' the ad said.

Another ad targeted frat boys ('Keg stands are crazy. Not having health insurance is crazier').

Those ads were commissioned by advocacy groups, not a particular insurance company, and not by the state-run 'exchange' (the website where those who lack coverage scan shop for policies). But insurers targeting that demographic might have to try some unconventional ads, as well.

'Every year there will be people aging off of their parents' plans,' Mr. Resnick said. One of 'Obamacare's' many provisions was one that allowed young adults to stay on their parents' insurance until they turn 26. 'It's going to be a big market.'

The insurers themselves will be the biggest spenders, particular after the exchanges gain a toehold and people understand what they are, and how they work. But until then, both the state exchanges and the federal Department of Health and Human Services will be running lots of TV spots, too.

And, in an election year, you can expect big spends from Obamacare friends and foes, Mr. Roskowski said, hoping to sway voters either on the virtues of the law, or conversely, the shortcomings of the federal healthcare.gov website and the failure of its rollout.

Bill Toland: btoland@post-gazette.com or 412-263-2625.