IPG Mediabrands Wins GEICO’s $1.4B Media Review
It marks an end to the insurance brand’s nearly three-decade relationship with Horizon Media
IPG’s Mediabrands won Geico’s business following a competitive review that began last fall and concluded this week.
The account is worth more than a billion dollars. By COMvergence’s estimates, it spent $1.38 billion last year on measured media. Of that, Geico funneled $827 million into offline spend, including TV. It spent $553 million on digital investments.
The decision follows a shakeup within the brand’s marketing department. Last April, the former Estee Lauder marketing leader Damon Burrell became Geico’s new CMO. By October, it reduced its marketing department’s headcount. Insurers are struggling, according to Insider Intelligence’s eMarketer data, which notes layoffs in the insurance industry ballooned between July and August last year from 12,000 to 23,000.
Appointing IPG Mediabrands will modernize Geico’s media approach, according to a brand statement.
“We are excited to work alongside IPG Mediabrands to transform how Geico designs integrated marketing strategies connected to customer needs and measured by business outcomes. The partnership marks a milestone in Geico’s marketing evolution, and we look forward to reaching many more milestones with our new agency,” Burrell said in a statement.
The end of a three-decade relationship
Ending its relationship with Horizon Media is another significant change for the brand. It has maintained a 29-year relationship with the independent media agency, which defended the business.
“I have been personally blessed and professionally honored to have built a 29-year relationship with Geico—quite rare for this industry—and for Horizon to have made the tremendous business impact that we’ve made in that time, driving astronomical growth that took them from No. 8 to No. 2 in the auto insurance industry,” Bill Koenigsberg, CEO and founder, Horizon Media said in a statement provided to Adweek.
What this illustrates is media is increasingly a holding company proposition.
Jay Pattisall, Forrester principal analyst
Dentsu Media also participated in the review, sources familiar with the matter told Adweek, although the holding company declined to comment for this story. Geico declined to reveal which other agencies it considered. However, other holding companies and independent agencies were part of the lineup, a source confirmed.
“By incorporating the full breadth of the contemporary, data-infused expertise at IPG Mediabrands, we can support the GEICO team as they go to market with an audience-led approach that will increase the value of each customer interaction and also drive growth,” said IPG’s CEO Philippe Krakowsky.
The “audience-led” approach Krakowsky referenced will hinge on IPG’s Acxiom subsidiary. Of the three agencies Adweek learned were vying for the business, Horizon is the only one that does not own a data company. Dentsu, for its part, leverages its Merkle acquisition.
Group-level wins at IPG are not usual
Pitching at the group level is highly unusual for IPG Mediabrands, although it has been done before. Last year, the group crafted a bespoke team to service the Dyson account. Mediabrands will also craft a bespoke team for Geico, a source told Adweek.
Mediabrands competitors, including Publicis Media and Dentsu Media, often pitch at the group level. But Mediabrands commonly handles business at the individual brand level. It veers away from the single P&L model other holding companies tend to present as a benefit to clients. Integrated models allow holding companies to pull from across their agency subsidiaries to staff a single client account.
At their best, group-level pitches allow holding companies to be more efficient and leverage more of their talent to address a broader range of challenges. In some circumstances, however, models like this can create account staffing issues. To avoid staffing issues, many large clients ask for custom-designed teams composed of fully-dedicated staff.
According to Forrester principal analyst Jay Pattisall, Mediabrands’ integrated offering might include Reprise Digital’s precision media skills, the tech and data capabilities inside Acxiom and Kinesso. It may also include Mediahub’s creative media approach.
Mediahub announced just last week it’s officially joined IPG Mediabrands, having previously operated separately from the group. It is unclear how much the Geico review influenced that business change, although the brand stands to benefit from it.
“What this illustrates is media is increasingly a holding company proposition because of the level of integration required to coordinate all the required components to execute audience-first media management today,” Pattisall said.
With Mediabrands’ appointment, the insurance brand is consolidating more of its marketing budget with IPG. Its creative agency of record is the IPG subsidiary, The Martin Agency.
“We’re honored to extend our long-standing relationship as their creative partner and excited that we’ll now have the opportunity to bring to bear a range of media and precision capabilities on their behalf,” Krakowsky added.
Read more in Adweek.