Geico Ad Chief Builds Insurer Into Master Marketer

Ted Ward Takes It From Direct Mailer to $300 Million Ad Budget

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COLUMBUS, Ohio ( -- Ted Ward joined Geico 23 years ago, charged with launching a two-person advertising division devoted entirely to direct mail. Today, as VP-marketing for the subsidiary
Ted Ward and the Martin Agency turned the acronym for Government Employees Insurance Company (GEICO) into a household name by creating a pop-culture icon.
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of Warren Buffett's Berkshire Hathaway, 54-year-old Mr. Ward directs a nearly $300 million budget in a category where a price war among the top four -- State Farm, Allstate, Progressive and Geico -- has driven spending to nearly $1 billion. Mr. Ward and the Martin Agency turned the acronym for Government Employees Insurance Company into a household name by creating a pop-culture icon. Mr. Ward recently talked with Advertising Age reporter Mya Frazier.

When did the gecko become part of the Geico brand?
I was sitting around with a former art director at Martin, shooting the breeze after some focus groups and literally it was on a napkin and the rest just played out.

Why do you think he works?
It's kind of an odd and captivating character that is able to portray our benefits -- saving people money on car insurance without sacrificing service or anything else. He can talk to it without being a total huckster. He's perceived as a nice guy and can tell our story in a convincing fashion.

You're a pretty big TV advertiser. Is the return on investment there?
Rather than singling out any one medium, I would say that the collection of how we communicate with the consumer is the key. It's a much more difficult job than it used to be because of fragmentation, because of the way [consumers] are spending their free time. ... We are a huge online company and it is one of the critical ingredients to our marketing success because of the efficiencies of the operational components because it's a very different way to communicate with consumers and we don't see it decreasing anytime soon.

How do you compare your business model to your competitors?
We have essentially a direct-to-consumer business model. We try to strip out costs to deliver the lowest price -- it includes having very few agents in a process by having a superior technology model, which back in the '70s was direct mail; in the '80s and '90s, a telephone; and in the last 10 years, the online delivery of rates.

What about the human touch?
There are few reasons today to walk into someone's office and give them a check. ... We view ourselves as a huge agency by which you have superior access to us 24 hours a day, seven days a week. You can choose not to touch us and do it all online, especially in the more simple transactions -- getting a rate quote, adding a new car. You know how to spell your name better than we do.

How is Geico different in the Berkshire Hathaway era? Back in '96, we sort of became a different entity -- it just became a more interesting place to work. His charge to us was to become a much more aggressive player.

Have you ever met Warren Buffett?
Oh yeah, he comes every few years. He's a wonderful owner and gives us all the rope we need to hang ourselves.

What do you mean by that?
He's a gentleman who approaches the companies he owns by letting the management do what it does best. He never [says things] like, "I think the gecko should have a Southwestern accent instead."

Why give the gecko a British accent?
Why not?

Your relationship with Martin is going on 12 years. That's a good run.
I came out of the agency business and my objective was to keep them lots of years so I wouldn't have to go through agency search, which is the most fruitless thing you can do.

Spending in the insurance category has just exploded. Does that worry you?
It's more competitive in recent years than I've ever seen it, and that's because of some of the success a company like ours has had. We've dramatically increased market share and it is causing -- especially with the public companies -- friction because growth is king for a publicly-traded company. We aren't dancing to the tune of Wall Street, so we can approach things with more thoughtful and long-term thinking.

So who is the gecko?
He is a bunch of digital images. He's just an everyday guy.

No, who is he actually?
I can't tell you that. I'd have to shoot you.
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