How Big Data Spawned the Geico Gecko
Insurance CMO Ted Ward Recently Visited a Merkle Storage Facility, Observing How Falling Data-Processing Costs Impact His BusinessBy: Kate Kaye, Published: Mar 18, 2013
Geico's Gecko spokes-lizard has become so iconic that he shows up as a human-size mascot at sporting events. He's even milking his fame with a new book. But the insurance firm did not originally intend for the popular character to become its longstanding brand representative. Data analysis determined that, according to Geico CMO Ted Ward.
For 10 years, Geico has worked with Merkle, a database-marketing consultancy, to run the insurer's marketing database, handle its direct mail and print-campaign analytics, and manage its targeted digital display ads. Geico also works with Martin Agency and Horizon Media on advertising.
A peek inside the data-storage facility in Merkle's Columbia, Md., headquarters -- about 20 miles southwest of Baltimore -- reveals what may look like just a bunch of servers. But for Merkle's brand clients such as Geico, Dell and Loews Hotels, it's much more. Within those meticulously cooled steel chambers pulses marketing lifeblood.
Mr. Ward, who, by the way, made Ad Age's Power Players roster in 2009 for "shattering the notion that insurance and, more importantly, selling insurance has to be boring," paid Geico's data a visit last month.
Ad Age: What were you thinking when you visited Merkle's data facility recently?
Ted Ward: The thought that came to mind is farming has come a long way -- in this case, data "farming" and the tools and implements that allow for increased productivity and yield. The cost to store and process data has come down so substantially that it is now possible to "crunch" a myriad of internal and external data elements through complex algorithms to market to customers and prospective customers in more personalized, timely and meaningful ways. Most of the core direct-marketing techniques of targeting remain unchanged, but the ability to more intelligently execute them is vastly different.
Ad Age: Geico is famous for its spokes-characters, most notably its green, scaly one. Does the company use data to help determine which creative concepts will resonate with audiences?
Mr. Ward: The green scaly spokes-character you reference was actually born in a petri dish of data. The Gecko was "hatched" with absolutely no research or even the intention of producing a long-running, iconic campaign. The fact is we analyzed results from running the first set of Gecko TV spots and liked the bump in business volume. We were able to attribute the increased business to the campaign and decided to move forward with additional Gecko executions. From that point on we have incorporated more traditional market research to track and monitor consumer sentiment related to the little green guy. I'm happy to report he is still one of the best-liked icons in advertising today.
Ad Age: Now that Geico can see a flood of information about how people discuss the brand in social media, does it affect your job as CMO?
Mr. Ward: I don't believe social media has had as much impact on the job of the CMO as many might believe. It is just another channel of communication. That is not to minimize the importance of understanding, managing, initiating and reacting to this information. However, managing other online-marketing activities like SEO, display and online video are equally challenging. The difference is these programs are more quantifiable. There is a reason it is called social media and not business media. There is much less control over the inputs and outputs, and the metrics of success are not as closely tied to direct business results.
Ad Age: Are there traditional data sets that are less important to Geico in this new data world? What will always be essential data for brand CMOs?
Mr. Ward: I'd say most of the traditional data sets are still relevant, but the level of detail and analysis is what has changed. Also the ability to discretely reach consumers via new channels has perhaps had an even greater impact. It wasn't that long ago that none of us had personal email addresses or an IP address.
Today, these are important data elements for most marketers, but no less important than street addresses, ZIP codes and carrier routes were a mere 20 years ago. So, I'd say address is a critical data element regardless of the form it takes. The other element is name. There's nothing like addressing communication to someone by their name -- as long as it is correct. Attaching levels of data and insights to that name is what big data is changing.
Ad Age: Should CMOs care about the cloud?
Mr. Ward: In my case the cloud is not a topic of discussion other than how it relates to our ability to manage marketing programs in a more timely and efficient fashion.
What CMOs need to worry about is how to manage the increased capabilities that cloud computing and big data provide. I worry more about managing enterprise segmentation so that it can be used to target, measure and create insight across media both online and offline. We are concerned with digital-media optimization and the use of data to drive targeting and measurement of programmatic buying in digital display and video media. As for the cloud, our IT folks have to juggle that Jell-O.