General Business Issues

Health Plans Use Creative Advertising Strategies to Target Specific Age, Ethnic Groups

Reprinted from the July 9, 2007, issue of HEALTH PLAN WEEK (formerly Managed Care Week), the industry's leading source of business, financial and regulatory news of health plans, PPOs, and POS plans.

Health insurers increasingly are employing creative advertising and marketing strategies to target specific populations. The strategies include using a major league baseball team to reach young adults, as well as social networking Web sites to reach those who recently graduated from college.

Health plans, insurance brokers and state-run programs such as the new Massachusetts Commonwealth Health Insurance Connector — which is using the Boston Red Sox to target men and women aged 19 to 44 — say they hope using such targeted strategies will encourage more people to join the plans. Some plans are focusing on specific racial and ethnic characteristics: California-based L.A. Care, LLC, for instance, is targeting low-income Latino residents, which comprise 60% of the plan's membership base, with a $1.8 million advertising campaign.

How insurers target specific groups generally depends on the age of the population they want to reach, says Linda Armstrong, senior vice president of advertising agency DMW Worldwide LLC. For instance, insurers may use television and incorporate the Internet to reach those under age 65.

Health insurers must also take into account the mentality of the group they're trying to reach, Armstrong says. For instance, those ages 20 to 30 are referred to as "the invincibles" in the health insurance industry, according to Armstrong, because they "say to themselves, 'I'm invincible. I don't need health insurance.'" So insurers develop specific advertising strategies to appeal to this group, to "show that they can get injured doing everyday things" and incorporating the Internet, television and other media to best reach that group, she says.

But when targeting those aged 65 and older, insurers are "dealing more with mail than anything," as well as some television, Armstrong says. "That still remains pretty much a market that mail and some newspaper are the primary methods."

The Massachusetts Connector's $3 million-plus campaign includes advertising space on the New England Sports Network, as well as an enrollment education booth at Fenway Park, where the Red Sox play home games. The campaign is intended to encourage people to meet the requirements of the state's mandatory health insurance law that took effect July 1. Most residents without health insurance by Dec. 31 will face a state tax penalty next year.

The purpose of the education booth at Fenway Park is "so that people attending games will have access to information about new plans that are available [and] health care reform," says Tara Murphy, a spokesperson for the Massachusetts Connector. The hope is that the booth will reach the "uninsured, as well as the insured, who may have friends and family without" insurance, Murphy says.

"The ultimate measure of success for the Connector will be Web hits, phone calls, and then over time, the number of people who enroll," she says. The Connector is tracking phone calls and hits on its Web site to determine success of the advertising strategy. Before the campaign began on May 28, the Connector was getting about 25,000 inquiries per week. Since the campaign started, that figure has increased to 50,000 inquiries per week, Murphy tells MCW. The Connector will conduct a survey in November, just after the campaign ends, to measure public awareness of the Connector and of the law and plans available.

Armstrong says that targeted advertising ultimately provides insurers with the best value for their money, and paying attention to consumers' needs keeps them satisfied.

"People themselves don't like to get advertising that isn't appropriate for them," Armstrong says. "If you send them things that don't make sense to them, you've lost them."

Strategies Include Web, TV — Even Pizza Boxes

Andrea Van Hook, director of communications and marketing at L.A. Care — a public agency and health plan providing insurance to vulnerable groups — says deciding to target the Latino population was an easy decision for the insurer. The Latino population tends to have "higher rates of being uninsured because they don't realize that there are programs that they can qualify for," Van Hook says in an interview.

L.A. Care selected a Hispanic advertising agency to develop the campaign so that materials would be created in Spanish, and then translated into English. The campaign includes television, radio, newspaper, billboards, bus and convenience-store advertisements. Ads use the image of an orange as a healthy snack, which the insurer feels is "very culturally relevant not only to this population, but we believe when we expand the campaign to other populations, [that] it's going to work there as well," Van Hook says.

Excellus BlueCross BlueShield, in upstate New York, targets Medicare members with a fitness and weight-loss program, through an advertising campaign developed by DMW. Through the program, members are reimbursed up to $40 per month "toward any fitness or weight-management program or membership," according to DMW materials, allowing "seniors to exercise at any fitness facility on any day, at any time" and to receive reimbursement for weight-management programs and facilities, such as Weight Watchers or Jenny Craig.

Excellus sent mass mailings of T-shirts, brochures and other materials to inform its members about the program, says Armstrong, representing the health plan. Early results showed that a mailing targeting members who had previously used the fitness program — and encouraging them to do so again — generated the best response, according to company materials.

Internet Becoming an Advertising Resource

Online social networking Web sites are also becoming a launch pad for advertising strategies by insurers and brokers. Coventry Health Care, Inc. unit Coventry Health Care of Kansas, according to news reports, began advertising its CoventryOne individual health insurance plans for college students and recent graduates on Facebook, a popular social networking site on which members gather, interact and trade goods and services. The insurer did not respond to requests for comment on this.

Coventry isn't alone in its use of Facebook to reach uninsured young people. Scott Solomon, a Pennsylvania broker with the Montgomery Benefits Group, uses Facebook to advertise to people who recently graduated from college.

Solomon incorporated Facebook into his sales strategy when searching for a "new way to reach a younger population," he says. "Being young myself, I realized that there's MySpace, there's Facebook, there's other ways to communicate that older people might not know about," Solomon says.

The strategy wasn't tremendously profitable. Solomon spent $30 to buy a banner advertisement on Facebook. He also started a free group on the site. His efforts netted two clients who signed up for insurance plans. "It wasn't as good as I expected, but it still paid for my costs," he says. He has since turned his attention to posting insurance advertisements on pizza boxes delivered by a local restaurant.

Solomon's efforts demonstrate that different age groups present different advertising challenges.

"Across the board in advertising, everyone is trying to be more targeted," Armstrong says. "The day of just dropping millions of pieces of mail has really diminished. Every insurer that I know is really trying to target, to match people up with the ads that they send with the right products for that person, and not just kind of waste money mailing to everyone."

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