Turn on the TV and you’ll see multiple car insurance commercials between the segments of your favorite sitcom. Open your phone and you’ll see Instagram and Facebook ads bearing the logos of the major car insurance providers in the U.S. When it comes to advertising, car insurance is ubiquitous.
Since 48 states require car insurance, it’s natural that car insurance companies are eager for your attention and ultimately your business. One way to increase brand awareness and generate leads is through advertising, be it TV, print, or digital advertising. And car insurance companies aren’t afraid to spend. In studying the biggest spenders in the industry, we found:
- Car insurance companies make an average of $296 for every $1 they spend on advertising.
- Out of the major car insurance companies, GEICO spends the most on advertising, with a total of $1.55 billion in 2020.
- In 2021, the insurance industry spent a total of $12.51 billion on digital advertising, a 12 percent increase from 2020.
How Much Do Car Insurance Companies Spend on Ads?
While there’s no publicly available information on how much insurance companies spend on car insurance ads specifically, we did find data on their total ad spend.
| Car insurance companies that spent the most on advertising in 2020 (high to low) | Advertising spending in the U.S. | Percentage of total ad spend from 9 companies | Difference from average ad spend of 9 companies |
|---|---|---|---|
| GEICO | $1,552,000,000 | 32% | 65% |
| Progressive | $1,048,000,000 | 22% | 49% |
| State Farm | $652,000,000 | 13% | 17% |
| Allstate | $499,000,000 | 10% | -8% |
| Liberty Mutual | $465,000,000 | 10% | -16% |
| USAA | $350,000,000 | 7% | -54% |
| The General | $114,000,000 | 2% | -372% |
| Farmers | $98,000,000 | 2% | -449% |
| Nationwide | $65,000,000 | 1% | -728% |
In total, car insurance companies spent over $4.8 billion on advertising in 2020, an average of $538 million per company. GEICO spent the most at over $1.5 billion — 32 percent of the total for nine major companies. Overall, that’s 65 percent more than the average of the nine companies that spent the most on advertising in 2020. Nationwide spent the least at $65 million, a very low number by comparison. 1
Is advertising effective? The short answer is yes. With revenue data from three major insurance companies — State Farm, Nationwide, and Farmers — we calculated that for every dollar they spent on advertising, they got back $296 in revenue.
| Company | Property/casualty revenue for every $1 spent on advertising in the U.S. in 2020 |
|---|---|
| State Farm | $121 |
| Nationwide | $645 |
| Farmers | $1212 |
Keep in mind that this revenue was for all property/casualty insurance, which includes car insurance along with homeowners, personal liability, watercraft, and inland marine insurance.
Ad Spending by Industry
It’s pretty mind-boggling how expensive commercials, print ads, billboards, and digital ads are. However, the insurance industry only made up 6 percent of all digital ad spending in 2021, according to eMarketer. Again, this includes all types of insurance, not just car insurance companies.
| Industry | Digital ad spending share in the U.S. in 2021 | Total ad spend (in billions of USD) | Year-over-year change from 2020 |
|---|---|---|---|
| Automotive | 8% | $17.01 | 14% |
| Banking | 4% | $9.31 | 13% |
| Card networks | 1% | $1.60 | 15% |
| Computing products and consumer electronics | 9% | $19.03 | 15% |
| Consumer packaged goods and consumer products | 16% | $36.03 | 18% |
| Entertainment | 6% | $13 | 17% |
| Financial services | 13% | $27.63 | 13% |
| Healthcare and pharma | 6% | $13.63 | 12% |
| Insurance | 6% | $12.51 | 12% |
| Media | 5% | $10.80 | 11% |
| Retail | 26% | $57.20 | 20% |
| Telecom | 7% | $15.32 | 11% |
| Travel | 2% | $4.05 | 14% |
| Other | 3% | $7.24 | 11% |
| Other financial services | 2% | $4.20 | 14% |
In 2021, the insurance industry spent $12.51 billion on digital advertising alone, a 12 percent increase from 2020.3
A History of Car Insurance Advertising
If you don’t live under a rock, you probably recognize the car insurance mascots as much as you do an aunt or uncle.
Jake from State Farm, Flo from Progressive, the ubiquitous GEICO gecko — these characters introduce us to brands that would otherwise seem very similar to each other, offering standard personal auto insurance policies for liability coverage and beyond.
But before there was Flo, car insurance commercials weren’t so funny. They were serious cautionary tales, testimonials from satisfied customers, and the like. Insurance was considered a solemn business, as it deals with the effects of at-fault accidents, which can be costly and dangerous.
Now, insurance companies lean into the humor that started with the GEICO gecko in 1999. An advertising agency called The Martin Agency invented the renowned reptile to reinforce GEICO’s name, which many people do not know is an acronym for Government Employees Insurance Company. Since the success of the gecko, the company has debuted the cavemen (which turned into a short-lived sitcom) and the infamous rhetorical questions.
But can comedy sell something as important and practical as car insurance? The answer is yes. Pre-gecko GEICO had only 2 percent of the market share4, making it the eighth most popular car insurance provider in the U.S. But as of 2020, GEICO comes in at No. 2 behind State Farm, with a total 14 percent of the market share. Naturally, other companies have followed suit with characters such as Progressive’s Flo and Allstate’s Mayhem.
Another case study is Progressive. In 2007, Progressive had little brand recognition, to the point where people often confused it with Progresso Soup. But after working with the Arnold Worldwide ad agency, it debuted the superstore idea with iconic cashier Flo in 2008. The actress who played Flo, Stephanie Courtney, was a graduate of The Groundlings, a sketch and improvisational comedy troupe and school based in Los Angeles. The commercial soon became a recurring ad sitcom, making Flo a household name. Who says improv can’t be lucrative?
Like the GEICO gecko, Progressive’s funny ads had a huge effect on its business. From 2008 to 2018, its revenue more than doubled from $13.6 billion to nearly $30 billion.5
Recap
There’s a reason why companies spend billions on car insurance advertising each year: It works. But that doesn’t mean you should get car insurance based on which ads make you laugh the most. It’s important to do your research on car insurance and talk to an insurance agent or broker before deciding on car insurance coverage. Consider not only a company’s advertising campaigns, but also its customer service ratings and whether it offers cheap car insurance. To save money on car insurance, you need to look past the social media, digital, and traditional ads.
Methodology
For this report on car insurance advertising, we compiled third-party data from these sources:
- Ad Age
- eMarketer
- Fast Company
- Fortune
- S&P Global
