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Social Media – What the Data Tells Us About the Strategy

Terry Golesworthy
Insurance Experts' Forum, June 30, 2014

No one knows how long it will be before the social media bubble bursts or, more likely, new platforms come along and steal the pot of gold. It is logical therefore that the current leading social platforms monetize as fast as possible. Insurers, like all other brands, now find themselves asked to pay to reach and engage with their own fans and followers. This is reality and it is creating two divergent strategies among insurers.

The first strategy is the funnel or pay-to-play route which mirrors traditional marketing: Aim content at targeted consumers with reach boosted by ad dollars. This strategy can connect an insurer with more of its own fans or reach beyond making use of the attractive social targeting options such as friends of fans. All told, the fan base become the equivalent of an email list.

The second strategy is an upside-down funnel: Connect with a smaller number of brand advocates with the goal to encourage them to pass on your message through their own social networks. You trust the implied endorsement helps the message gain credibility en-route as well as provide an easier route through complex social networks.

With the funnel approach, engagement is now becoming more “spiky,” with posts that benefit from promotional spend drawing thousands of interactions, while others that rely on organic reach barely attracting any notice. Promotional activity can buy engagement, but it does tend to be more superficial. In Facebook terms, it is more often a “like.” Promoted posts invariably call for quick reactions, often on an emotional level, and it is a natural reaction to click the like button.

With the upside-down funnel, engagement is more consistent, but at a much reduced level with fewer spikes. Content needs to inspire advocates to push the share button. Engagement with a high percentage of shares is one indicator of the upside-down funnel in operation.

One way to identify strategies in use at insurers is to use “outlier analysis” to separate engagement spikes from normal or organic activity. A spike might be the result of an amazing post but in most cases is a strong indicator of dollars changing hands. According to the National Institute of Standards and Technology, “An outlier is an observation that lies an abnormal distance from other values in a population.” Outliers can be identified by calculating the interquartile range (the difference between the lower and upper quartiles), and any data point that is more than three times that range is an outlier. The population we used for the analysis were Facebook interactions for 100 insurers during the first quarter of 2014.

Some takeaways:

  • Four of the five insurers with the highest organic engagement rates use independent agencies for distribution.
  • Insurers with the ten lowest organic engagement rates distribute directly to consumers or through captive agents.
  • The 10 insurers with the highest organic engagement rates receive 82 percent of interactions from organic posts. The 10 insurers with the lowest organic engagement get only 36 percent of interactions from organic posts.
  • For the 10 insurers with the lowest percentage of engagement coming from outliers, 37 percent of the interactions are shares. For the ten insurers with the highest percentage of engagement from outliers, the share rate is 13 percent.
  • For Facebook pages with between 100,000 and 1 million fans, 58 percent of the engagement now comes from outlier posts. An outlier post for these pages attracts 44 times the interactions of an organic post.
  • For Facebook pages with between 10,000 and 100,000 fans, just 14 percent of interactions come from outlier posts.
  • The average percentage of interactions coming from outlier posts across the 100 insurers is 35 percent, but that percentage ranges from 3 percent to 96 percent. The percentage of interactions coming from outliers is increasing, up from 29 percent in Q4 2013.
  • The total number of interactions by the 100 insurers dropped 7 percent from Q4 2013 to Q1 2014. However, the number of posts that gained more than 1,000 interactions increased by 20 percent.

Perhaps the divergence is best illustrated with an example. Travelers has a fan base of 16,000, with content that might be described as helpful advice and education often supported by blog articles or videos. In the first quarter, Travelers posted 51 times gaining in response 8,500 interactions of which just 4 percent came from outlier posts. An impressive 65 percent of those interactions were shares with the majority by independent agents, possibly the most obvious insurance advocate. Organic posts contributed 165 interactions per post against 191 for outlier posts, an almost indiscernible difference.

In comparison, Progressive, with a corporate fan base of 250,000 posted 42 times in the quarter attracting just over 16,000 interactions in response to content that was generally light, often amusing and with plenty of images (including kittens). The five outlier posts each contributed, on average, almost 3,000 interactions making up between them, a staggering 91 percent of the total interactions. Of these interactions nearly 90 percent were likes. The 37 organic posts contributed an average of just 38 interactions each.

There are many conclusions that can be drawn from the data, but the objective of the analysis is not to recommend one method over another. Suffice to say that insurers now need to identify their own optimal route to the consumer and that will effect ad budgets, content creation, agent training and especially success measurement.

As part of this, there are many questions to that need to be asked.

As organic reach continues to drift away, will the advocacy approach see less traffic, or will these more committed fans seek out the content, thereby withstanding any changes in social platforms? Will an advocate be better able to reach consumers in social media than an insurance company? Will insurers need to spend ever-increasing amounts on social platforms as most brands take the same route?

There is an inevitable rethink – again – about social media metrics. It all started with insurers coveting fans, and running sweepstakes, contests and offering charity donations to recruit them. Then engagement became the key metric and content, often nothing to do with the core business, was designed to grab as many interactions as possible. Insurers, as did all brands, did everything possible to stay one step ahead of the social platforms that constantly changed the rules to block brands gaming the system. But this, too, might be an equally false metric. Too much effort has been focused on understanding the hidden rules of social platforms than growing the business and connecting with customers. A well through strategy should prevail despite social platform changes. The platforms are temporary, the strategy should be permanent.

This blog was posted with the permission of the Customer Respect Group.

Terry Golesworthy, president of The Customer Respect Group, has covered technology issues and innovations in the insurance industry for many years.

Readers are encouraged to respond to Terry using the “Add Your Comments” box below. He also can be reached at terry@customerrespect.com.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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