Aflac, Inc. averted what could have been a major public relations nightmare when they fired comedian Gilbert Gottfried, the longtime voice of the Aflac Duck, for the incredibly insensitive remarks he tweeted immediately after Japan’s earthquake and tsunami.
Aflac CMO Michael Zuna was decisive in the decision to release Gottfried for good business reasons. After all, the company generates the bulk of its revenues in Japan and any hesitation or equivocation would have appeared to support and fuel Gottfried’s dismissive attitude toward the terrible suffering of the Japanese people.
The real genius of the Aflac marketing machine was to immediately announce and launch a national search for the new voice of the Aflac Duck. In little over a month, they announced that Dan McKeague had beaten out more than 12,500 contenders for what has to be one of the best voice-over gigs in the ad business.
This kind of bold and decisive action is just one of the reasons why the Aflac brand, headquartered in Columbus, GA, has more than doubled in brand equity, from 6.4% in 2002 to 12.8% in 2010, as a percentage of its market cap. The value translates from just under $1 billion in 2002 to $3.4 billion in 2010, according to CoreBrand’s Brand Equity data.
This growth of brand equity comes at a time when their competitive peers have lost brand equity – from an average of 4.8% in 2002 to 3.8% in 2010. Brand equity value currently stands at $800 million for the average insurance company. That is what we call creating separation from your competitors.
To put these percentages into perspective the average brand equity across the 800 companies and 49 industries CoreBrand tracks is 5-7%. The insurance industry average is 3.8%, which is proof that insurance is a low interest category. The fact is that some companies in the insurance category get far above the average while other companies get little or nothing in corporate brand equity. Let’s examine a few insurance companies:
|BRAND EQUITY 2010||BRAND EQUITY 2002|
|Allstate||15.2% = $2.6 billion||13.6% = $3.6 billion|
|Aflac||12.8% = $3.4 billion||6.4% = $940 million|
|Prudential||8.1% = $2.5 billion||14.6% = $2.5 billion|
|MetLife||8.0% = $3.6 billion||12.7% = $2.5 billion|
|Progressive||6.1% = $850 million||2.5% = $290 billion|
Allstate has grown brand equity to be number one in the category, but the value has declined. While their brand plays a bigger role but it doesn’t create as much value. They need to focus more on the fundamentals.
Prudential has squandered the brand equity of the company but their financial fundamentals are strong so, therefore, the corporate brand has the same value as in 2002. Unfortunately, it doesn’t have the strength to carry the load as it did a few years ago. It will be interesting to see if Prudential’s brand rebounds with its new ad campaign.
MetLife has also lost a significant amount of brand equity over the eight years being examined, while the financial value of the corporate brand has grown. This seems obvious, but at a time when cartoon icons for insurance companies are all the rage, why didn’t MetLife leverage their mascot, the king of iconic cartoon characters “Snoopy,” to grow their brand equity.
Progressive has also grown both in brand equity and value with their consistent and quirky advertising campaign. The question is, is “Flo” still extendable as a character? They’ve already gotten tremendous mileage out of this highly effective campaign.
Geico is one that is obviously missing from the top five list. The reason is we are focused on the corporate brand and the impact it has on market cap. Since Geico is owned by holding company Berkshire Hathaway, the assessment is not an apples-to-apples comparison.
In conclusion it is pretty clear that as much fun as the Aflac Duck is to watch, it is doing some pretty significant business.