85% brand awareness
You might think any chief marketing officer would be grateful to inherit the annoying avian, who has landed the insurer phenomenal 85% brand awareness in the past five years. In that time, it's waddled its way into pop culture, with a cameo role in a feature film, "Lemony Snicket's A Series of Unfortunate Events," and figuratively shared "The Tonight Show" couch with Ben Affleck in 2003, when the actor decried being chased by girls screeching the fowl's famous line. ("That duck is goin' down," Mr. Affleck proclaimed.)
But Mr. Herbert, the company's first CMO and a classically trained package-goods marketer, plans to make the duck, created by Kaplan Thaler Group, New York, less visible (and, thankfully, less audible). His plan is to focus more marketing on what Aflac does -- supplemental insurance -- while expanding its offerings and growing the category.
"Our industry is a difficult one for the average consumer to understand," Mr. Herbert said. "We want to move our brand from being known to owned." And that means new creative, new products and a rethinking of the media plan.
$14.6 billion in sales
Aflac had sales of $14.6 billion in 2006 but generates 75% of its $1.5 billion earnings in Japan. In the U.S., it is the market leader, with 6% share; however, supplemental insurance itself accounts for only 9% of the total insurance category. "Beginning in the early 2000s, the company benefited from an underpenetrated market and the love of the duck," said David Lewis, senior insurance analyst at SunTrust Robinson Humphrey. So while Aflac's share today is at least twice the size of its No. 2 competitor, Unum Provident's Colonial Life & Accident, there's a lot of room for growth.
But there's also a looming competitive threat as entrants seize on opportunities arising from employers shifting a greater portion of health-care costs to employees, in turn generating a greater need for supplemental insurance.
So Aflac is goosing its budget -- Mr. Herbert won't say by how much -- and directing that fatter funding to messages directed at specific target groups. "I see a huge opportunity for us in business-to-business," he said. He's also earmarked additional funds to reach the Hispanic and possibly African-American markets.
Changing media buying patterns
With less reliance on the duck, Aflac will also rely less on his primary medium. "Because of the nature of our awareness vehicle, a duck, in order to hear him, the most prominent vehicle was TV," Mr. Herbert said. "Now we think that we have awareness and we can buy media differently."
So while most of the insurer's $75 million in measured media last year was spent on TV, according to TNS Media Intelligence, this year the insurer will load up on outdoor, print and other media. Fitzgerald & Co., Atlanta, handles media buying for Aflac.
To carry out his strategy, Mr. Herbert also has reorganized Aflac's 200-person marketing group into seven key areas, including product marketing, marketing services, channel marketing and strategic planning, creating what the Kraft, Campbell Soup, Coca-Cola Co. and Zyman Group veteran calls a "consumer-products/financial-services" hybrid. He's also recruiting additional talent -- "people with backgrounds similar to my own," he said.
Not without possible pitfalls
Though it sounds as if it will fly, the plan isn't without pitfalls, said Andrew Pierce, senior partner at marketing consultancy Prophet. Marketing best practices generally come from package-goods companies, but transferring them to a financial-services firm can be difficult. Financial-services firms often have difficulty attracting top marketing talent, he said, since selling annuities or other products lacks the sizzle of a Pepsi or Heineken.
Then there's another issue: "Financial products aren't impulse buys like buying soap or cookies," Mr. Pierce said. Sales happen at many points, whether with a sales agent or a human-resources executive; consumer loyalty depends on customer service. "There are a lot of different touch points," Mr. Pierce said. "Some of the consumer-package-goods rules apply, but not all."