According to reports on how much insurance company, GEICO, spends annually on advertising, it was estimated to allocate over $2 billion to such expenditure.
GEICO is the leading insurance company in the United States. The insurance company is recognised as a pioneer for changing the face of insurance commercials, which was done through the introduction of its Gecko mascot, who, surprisingly, has an Australian accent. Therefore, as the leaders in the field, it is logical that the company has a considerable budget for marketing and advertising activities.
In 2019, writings on how much the company spent on advertising suggested that it had the biggest budget amongst the US-based insurance companies. GEICO is estimated to have spent over $2 billion in advertising that year. This marked a slight increase, as it reportedly spent just under $1.7 billion in advertising in the previous year.
While the amount might sound considerable, it is important to discuss why GEICO would spend so much on advertising. Firstly, as previously stated in the opening paragraph, the company is recognised as the leader in the insurance company advertising space. When GEICO’s Gecko was introduced, it not only changed people’s perceptions of insurance companies, but it also increased its share price and relatability to its clientele.
Therefore, the company recognises advertising as an investment that leads to better profit margins. This means that as much as the money spent sounds exorbitant, the returns are worth it. Moreover, when looking at the amount spent on advertising, it is important to acknowledge that it is an online business. Therefore, establishing a notable online presence through advertising is crucial, as the company does not have brick-and-mortar premises.