Showing posts with label comparative advertising. Show all posts
Showing posts with label comparative advertising. Show all posts

Tuesday, February 24, 2015

Branding A Necessary Evil: Insurance

Benjamin Franklin once wrote that the only certainties in life are death and taxes.  If he had lived in 2015, he might have added a third inevitable evil:  insurance.

Virtually no responsible, self-sufficient adult in America can function without buying some form of insurance policy at some point in their life.  Whether it is private medical insurance, "umbrella" fire and theft insurance for one's home or apartment, life insurance, vehicle or boat insurance (mandatory if you want to register an automobile or motorcycle), business interruption insurance, professional malpractice insurance, the list of available policies goes on and on...

The ostensible purpose of all insurance is to spread risk.  That is, rather than take the risk that your new house might burn down and lose everything, you fork over a few thousand dollars a year, so that if such a horrendous calamity ensues, at least you can buy a new wardrobe.

It is virtually impossible to imagine an adult successfully prospering in our modern society, fully exposed to all attendant economic risks without insurance.

Driving a car into a tree or hitting a pedestrian can easily bankrupt anyone.  Giving birth to a healthy baby in a public hospital without health insurance could now cost well over $10,000.  That is not to even mention catastrophic illnesses.

Fortunately, ever present are private insurance companies, ready to sell you a blanket policy for a reasonable annual premium.

But how do these "necessary evils" brand themselves to differentiate themselves from one another in the marketplace? By credibly advertising that they will pay all reasonable claims without becoming adversarial?  No, not exactly.

The GEICO gecko has become ubiquitous.  The redheaded, apron-wearing Flo, as portrayed by actress Stephanie Courtney, has become a mainstay of television.  Cavemen, babies, puppy dogs and talking pigs have all become iconic representatives of an industry that isn't otherwise very popular.

Data provider SNL Financial found Geico had spent about $994 million on advertising in 2011. That was fully 22 percent more than next-largest spender State Farm, even though State Farm’s ad spending grew at nearly three times the rate Geico’s did.

The goal is to grab the attention of consumers who would rather not think about insurance. Experts say most people only ponder policies when they have an accident, buy a new car, move, or renew their existing agreement, which usually happens twice a year, at most. 

Today there are about 187 million insured privately owned vehicles on the road. Turnover is relatively low from year to year — 11% of consumers switch their policies while an additional 20% shop but don’t switch, according to J.D. Power. But that still means more than 20 million people are in the market each year.

But the insurance companies' advertising isn't winning many fans among existing customers.

They will wish you good luck trying to collect from the carrier.  

As soon as a claim is filed, some of these same insurance companies that were so cutely advertising their products with ice cream and puppy dogs will hire a team of savvy adjusters and professional litigators to nickel and dime a claimant to death.

But, for now at least, such negative reviews don't seem to be reaching consumers amid the din of talking lizards.

Thursday, July 19, 2012

The "Trashing" of Coke: Product Disparagement or Free Speech?

By Panhard [GFDL  CC-BY-SA-3.0] / Wikimedia Commons
Are you legally permitted to depict your competitor's products in a heap of trash to make an environmental comparison? Coca-Cola doesn't think so.

The megabrand's trademark lawyers recently sent a cease and desist letter to a soft drink competitor called Sodastream, about its new, aggressive international advertising campaign.

Sodastream sells a variety of flavoring and carbonating devices that allow consumers to essentially create and bottle their own soft drinks.  Part of Sodastream's pitch is that it claims to be more environmentally-friendly than its pre-packaged soft drink competitors.

In 2010, after a successful IPO, Sodastream launched an international campaign purportedly aimed at raising awareness of bottle and can consumption. The campaign involves the display of 9-cubic meter cages in various countries, each containing 10,657 bottles and cans gathered by Sodastream from landfills. 

Begun in Belgium, the "Cage campaign" has since visited 30 countries with the message that the waste produced by one family over the course of five years from beverage containers – 10,657 bottles and cans – can be replaced by a single Sodastream bottle.

On its website, Sodastream makes the following environmental and competitive claims about its products:

Eirik Newth / Creative Commons
"One SodaStream carbonator makes 60 or 110 liters, equivalent to 170 or 310 aluminum cans! When empty, the carbonator is refilled and reused, ready to make more fizzy and tasty soda whenever you want it."

While Coca-Cola's demand letter is focused on allegations under South Africa's unfair competition law, the broader legal question is relevant within the U.S., as well.

Indeed, this question is particularly germane given Sodastream is apparently bringing its marketing campaign right to Coca-Cola's doorstep in Atlanta, Georgia.

Despite arguments that such advertising is protected free speech under the First Amendment, the use of a competitor's branded product in such a commercial manner may nonetheless be actionable under U.S. intellectual property law.

First, federal trademark law contains an anti-dilution provision, which prohibits the use of commercial advertisements which dilute a brand by "tarnishment." Dilution can be actionable even if the consumer is not confused as to the source of the goods being advertised.

Second, by creating a heaping pile of trash made up (at least in part) of Coca-Cola branded products, Coca-Cola could argue that there is an implied and unfair product and brand disparagement that harms its goodwill among consumers without justification or substantiation.

Sodastream would presumably counter by claiming that the Coca-Cola product is not being disparaged.  Rather, Sodastream could contend that it is merely engaging in a form of truthful, protected free speech that accurately demonstrates the environmental impact that canned soda has.

In the end, if ever litigated, the final outcome in the U.S. would turn on whether a Court would consider the Sodastream campaign a form of constitutionally protected free speech about the environmental impact of a competitor, or nothing more than trademark dilution and product disparagement by an overly aggressive upstart.