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  • pg 1
   Like a good neighbor, State Farm is there
“The journey of a thousand miles begins with one step.” - Lao Tzu

Exec u t i v e S u m m ar y                       2

Ind u st r y In f o r m at io n                   3

Curre nt P osit io n in g                         6

O ur Re se a rc h                                 8

Crea t i v e S t r ate g y                        12

Crea t i v e El e m e n ts                        13

M edi a                                           20

Ca mpa i g n E v alu at io n                      24

Cl os i n g S u m m ar y                          25

Sourc e s Ci t e d                                26

Appalachian Advertising is devoted to the developement of a cohesive
campaign that highlights State Farm’s strengths and works to connect the
target audience to a brand image that has been lost in the clutter over
the past years. We would like to thank State Farm for the opportunity to
develop a campaign based on the provided case study and for the chance
to present our findings to this group of distingusined individuals.
“Life’s challenges are not supposed to paralyze you, they’re supposed to help you discover who you are.”
- Bernice Johnson Reagon

                                                                                    Young Adults ages
We recognize that adulthood is a series of steps, often beginning                 18-25 are at a stage in
with receiving a driver’s license. Other steps vary from the
purchase of a vehicle, the promotion of a job, the commitment                      their lives where they
of marriage or even the purchase of a new home. Most Young                        must learn to transition
Adults are being faced with the pressures of growing up and                      themselves into the real
making big decisions for the first time in their lives.
                                                                                 world with confidence.

This campaign will point out that, while change is inevitable, State Farm is there to help prepare
Young Adults for what will come. We will communicate the idea that State Farm’s superior
coverage and customer service provides confidence to all policy holders, no matter what step of life
they are currently experiencing.

As noted in the case study, the target market that State Farm wants to reach consists of Young
Adults ages 18-25, also known as Generation Y or Millennials. The provided case study told us that
about 17 million Young Adults are considered independent and are paying for 50% or more of their
living expenses.

      Our research shows that Generation Y values a trustworthy figure who they can turn to for
      sound advice and direction.

      State Farm is a well-known insurance provider with many loyal clients. However, a strong
      advertising image for the brand is lacking. Through qualitative, primary research we have
      found that many people confuse State Farm advertising with that of other agent-based
      insurance companies. Through the creation of a cohesive campaign we plan to increase
      brand recognition of State Farm while highlighting positive brand attributes. We recognize
      State Farm’s positive brand image, but are also aware of the potential for differentiation in
      relation to the 18-25 year old target market.

We at APP Advertising believe the following objectives will accomplish the overall marketing goal by
May 2011:

        • Increase overall market share from 18.3% to 20.1%
        • Increase top-of-mind awareness among the target market from 21.4% (APP Advertising
          research) to 40%

To begin, we will assess the economic and social environment in which the insurance industry must
currently operate.

“Life is a succession of moments. To live each one is to succeed.” - Corita Kent

The Current Market
Due to recent economic downturns, buying power is weak, and the insurance market is suffering.
Many people have reduced the coverage of their insurance plans in order to better budget
expences. This increasing frugality has impacted the insurance industry, causing providers to become
more competitive, aggressive, and concentrated.

According to Plunkett Research Ltd.,

             “While there are tens of thousands of small insurance industry companies
                in the United States alone, the industry tends to be concentrated in a
                few hundred major companies, many of which enjoy brands that are
              household names.” Dave Bradford, executive vice president of Advisen
              Ltd. and editor-in-chief of RIMS Benchmark Survey, explains, “Insurance
              capacity is disappearing at a startling rate, but the market nonetheless
            remains competitive. As a result of the recession, the demand for insurance
                  capacity also has decreased, which has kept pressure on rates.”

                                                   The majority of insurance providers focus on auto
                                                   insurance when advertising. This is due to the following:
                                                          • Auto insurance is required by law in forty-eight
                                                          • It generates the most profits for insurance
                                                          • It is considered to be the “gateway” to selling
                                                            other types of insurance

Industry Trends
The insurance industry has changed drastically over the past several years, transitioning from a
“seller’s market” to an “informed buyer’s market” (Fontanez). In addition, societal and cultural
changes are impacting businesses and insurance providers. Due to the continuously increasing
accessibility of information on the Internet, people are better informed in several disciplines. However,
our research shows that many within the target market are failing to improve their knowledge of
insurance, although they are using the digital medium for other purposes. Roughly 90% of all United
States households have access to the Internet, increasing the popularity of Internet advertising

Many insurance providers are offering online policy administration and claims management. This
has increased efficiency for several providers. However, others have consciously remained offline for
such services. In order to better engage customers, social media involvement has increased in the
insurance industry.
                                                                       “It shows [that] they are not
                                                                     really with it or in tune with the
                                                                    new ways to communicate with
                                                                        customers.” Female 18-24

      A recent study by market research firms Chadwick Martin Bailey and iModerate Research
      Technologies found that:

            • 60% of Facebook users and 79% of Twitter users are more likely to recommend a
              brand of which they are a “fan” or “follower.”
            • 51% of Facebook users and 67% of Twitter are more likely to buy a brand of which
              they are a “fan” or “follower.”

      This study also uncovered negative perceptions of brands that are not engaging in social
      media as a means of reaching customers (Consumers Engaged).

                                   Young Adults are accustomed to turning to the Internet for
                                   solutions. Immediate answers and accessibility have become
                                   expected. As mentioned in the case study, insurance providers
                                   that cannot satisfy the 18-25 year old market will be less successful
                                   than those that do.

                                   Given the changing economic environment, it is no surprise
                                   that affordability has become more important than ever for the
                                   average consumer. Consumers are particularly concerned with the
                                   value they can get for their dollar. This is especially true for Young
                                   Adults who typically have limited financial resources.

Company Overview
Now: a look at State Farm’s role within the insurance industry; State Farm is comprised of over 17,000
dedicated agents who offer distinguished service to customers. In 2009, State Farm was ranked 31st
among the Fortune 500 companies. Offering several non-insurance services such as mutual funds
and bank loans, State Farm is more than an insurance provider. Policy types include homeowners,
renters, life, health, disability, long-term care, business, and several more. State Farm conveniently
offers a wide variety of options in order to meet all the insurance needs of customers.

State Farm boasts —over 78.8 million policies, —42.4 million auto, —27.4 million fire, —7.8 million
life, and —1.2 million health. State Farm also manages —over 2 million bank accounts and nearly
—425,000 mutual funds accounts.

SWOT Analysis
Below is a description of State Farm’s strengths, weaknesses, opportunities and threats. APP Advertising’s
SWOT analysis clearly points out different aspects of State Farm and how the company fits into the
insurance industry. This organizational tool enables us to begin to develop our campaign strategy.

                                   STRENGTHS                                 WEAKNESSES
                     • #1 U.S auto insurer                     • Inability to successfully reach the
                     • Strong company foundation with             younger client
                       trustworthy reputation                  • Inconsistent advertising image
                     • Loyal clients                           • Perceived as old-fashioned and
                     • Reliable and dependable brand             out-of-touch with the young
                       image                                     adult life
                     • Competitive rates                       • Perceived as the parent’s
                     • Mutually owned by shareholders             company
                     • High value on diversity in workplace,   • Gen Y has different view of a
                       marketplace and community                  “good neighbor” than parents
                     • Relatable insurance agents

                               OPPORTUNITIES                                  THREATS
                     • Younger generations                     • Economy – currently fewer 18-25
                     • Online services                            year olds can afford cars and
                                                                  car insurance
                     • Adjusting advertising strategy
                                                               • More families becoming one-car
                     • Advertise that agents are
                       available 24/7
                                                               • Increasing popularity of public
                     • Contemporize image while
                       remaining true to shared values
                                                               • Concerns of global warming and
                     • Niche marketing online due to
                                                                  harm to the environment
                       constant updating of databases

This situation analysis reinforces the idea that State Farm is a strong brand, but points out that it can
benefit from a more cohesively advertised image. We believe that the State Farm brand needs a
solid position in the insurance industry as leaders of today and tomorrow. With our campaign, State
Farm will be more recognizable and relatable to our target market.

Next, we will look at what State Farm currently represents as a company and will make suggestions
for improvement.

“Growth means change and change involves risk, stepping from the known to the unknown.” - George Shinn

State Farm operates on a basis of shared values, quality service, personal relationships,
mutual trust, integrity and financial strength. Currently State Farm is positioned as an
established, leading insurance provider that offers competitive rates and quality coverage.
The existing position of State Farm typically appeals to middle-aged and older adults and
unfortunatelydoesn’t resonate with the 18-25 year old market.

Mindset of Target Market
Typically, 18-25 year olds do not think about insurance on a
                                                                          As noted in the State Farm
daily basis. The topic is of little interest to most Young Adults.        case study, to the average
As mentioned in the case study, it is particularly difficult              18-25 year old, the thought
to increase concern for a service that prepares for the                    of worrying about things
unexpected. This is partially due to the fact that Young Adults
generally have a mindset of invulnerability.
                                                                            that could happen but
                                                                          might not is tantamount to
Independence is a value that has been instilled in most                   carrying an umbrella on a
Young Adults from childhood. However, this does not pair                          sunny day.
well with inexperience and a lack of knowledge of the
insurance category. Insecurity about future decisions is
the outcome. Often times, the target market turns to parental
figures for guidance according to Marketing to the New
Gen Y by Dave Sohigian.                                                  83% will trust a company
                                                                            more if it is socially/
Many Millennials consider it a personal or generational
                                                                        environmentally responsible
responsibility to positively influence the world. This leads to
similar expectations of companies they buy from and work                according to the 2006 Cone
for according to Elaine Fogel in Engaging Millennials.                    Millennial Cause Study
                                                                        conducted by Cone Inc. in
                                                                             collaboration with
                                                                               AMP Insights.

Category Behavior for the Target Audience
Our research, the case study, and our general understanding of the target market include the
following significant typical behaviors of 18-25 years olds:

                      They are frugal spenders          They are active in the
                       looking for the most          digital space, frequenting
                    return on their purchases.         social media websites.

                     They are socially involved        They are active and
                     and place high value on         concerned with issues of
                      relationships with peers.       environmental impact.

                       They are engaged in             They are engaging in
                   recreating the way we interact    competitive efforts toward
                      with the marketplace.                  success.

“The distance does not matter; it is only the first step that counts.” - Marquise du Deffand

We will begin with the following observation about insurance providers who appeal to Generation Y:

                                     There are two types of insurance providers.

                  DIRECT-TO-CONSUMER:                                             AGENT-BASED:
            Phone/Internet service is typically                        In-person, telephone, or internet
             employed to handle claims and                            service is utilized in order to handle
              issues. Deep understanding of                            claims and issues. Little customer
            insurance or specific policy is not                      understanding of insurance or policy
            necessarily required but is helpful                       details is necessary due to the help
             when filing a claim. Customers                          and service that the agent provides.
             typically deal with one of many                         A specific agent is typically assigned
           employees or an automated system.                                 to each policy holder.

                             There are inherently two general types of people who
                       are attracted to each of these categories of insurance providers.

                   “INDEPENDENT/DIY’ERS”:                                 “RELATIONSHIP CRAVERS”:
                These consumers tend to prefer                       These consumers prefer assistance
               to handle things on their own. A                       in handling issues. This makes the
             positive relationship with an agent                       relationship between insurance
              is not necessary, because they’d                         agent and client very important.
            often rather handle their insurance                      These consumers are interested in
            needs alone. These consumers are                        guidance and availability of support.
           attracted to the autonomy of dealing
                  with problems without aid.

                   While many 18-25 year olds prefer to think of themselves as fitting within the
                   “independent” category of consumers, the majority do not. The upbringing
                   that so many within the target have experienced is likely to blame. Most 18-25
                   year olds have been raised by “helicopter parents” who have guided and
                   assisted them, even when not requested.

                   These 18-25 year olds have, for the most part, been brought up to appreciate
                   a supporter. While the extent of a parental role is not always appreciated,
                   Millennials tend to be attracted to direction and support. This target market
                   fits State Farm Insurance well, and our campaign focuses on the confidence
                   they can find in State Farm’s team of outstanding agents.


A Look Into The Digital Space

We found the digital conversation about auto insurance to be somewhat lacking within the 18-25
year old market. While State Farm and other insurance providers have active social media pages,
including Facebook, Twitter, YouTube, MySpace, & agent blogs, we have found target market input
and response to be infrequent.

This further confirms our observation that 18-25 year olds are not actively thinking about auto
insurance or other insurance categories. They are not sharing related information and opinion
regularly. Knowledge of this lack of interest has been important to the development of our campaign
strategy. What little is being shared by target social media users is a combination of negative and
positive feedback about currently held policies.

                               This finding confirms that 18-25 year olds are
                               strongly opinionated and headstrong, even
                               about issues they don’t regularly discuss.
                               Early opinions are very important. We must
                               create a strong, positive brand image in the
                               mind of these opinion influencers.


Primary Research: Key Findings
To assess the opinions of 18-25 year olds about the auto insurance industry, we created a 38-question
survey. The survey was taken by nearly 400 members of the target market, representing diverse
ethnicities, locations, and other demographic factors.

                            • 76% of respondents would ask their parents
                              about insurance before anyone else.
                            • 88% contacted their parent first upon the
                               most recent auto accident.
                            • 61% were most influenced by their parents
                               when choosing their provider.
                            • 60% reported being “very close” with their
                            • 71% would prefer a close or fairly personal
                              relationship with an insurance agent
                              assigned to their policy.
                            • Coverage & price were consistently noted
                              as most important in choosing an insurance

In order to better uncover qualitative consumer opinion, we monitored several focus groups and
conducted personal interviews. The following findings were most important to the
development of our campaign:

                                            FOCUS GROUPS/INTERVIEWS
                          • Respondents desired to be seen as “smart”,
                            “professional”, & “serious”.
                          • Most had very poor recall of State Farm
                             advertisements, although the “Like a good
                             neighbor…” slogan was well-recognized.
                          • Several expressed concerns with the lack of
                             reliability of “cheap insurance”.
                          • The majority of respondents found insurance
                             providers with humorous advertisements (Geico,
                             Progressive, etc) to be “stupid”, “inexperienced”,
                             and“untrustworthy”. Many described customers
                             of these providers similarly.
                          • Respondents expressed a desire for an agent who
                            can “take care of the situation” for them.

From our primary research, we have pulled the following insight about the 18-25
year old target market in relation to insurance:

           • The target market generally relies on frequent parental advice and
           • The target market wants an insurance agent that they can relate to
             and rely on, similar to the relationship they depend on with their
           • 18-25 year olds are extremely price-conscious but aware of the
             need for dependable coverage from an insurance provider. They
             want to know that the money they spend on insurance will not be
             wasted in the long run.
           • The target market is one of the most self-conscious generations to
             date. Conscious decisions that they make every day are seen by
             others as a reflection of who they are.
           • While State Farm is very well known among the target, their
             advertising efforts are not well recognized.
           • A humorous approach to insurance advertising, while appreciated for
             its entertaining appeal, is not one that delivers a positive brand image
             to the target market. The high involvement nature of the insurance
             purchasing process is key here.

                                                     This amounts to a description of
                                                     Generation Y that includes parental
                                                     reliance, self-consciousness, price
                                                     sensitivity, and a previously noted lack
                                                     of interest in the insurance category.
                                                     We understand the current lack of
                                                     campaign recognition and have learned
                                                     that a humorous approach to insurance
                                                     advertising is not effective in developing
                                                     a dependable brand image. This insight
                                                     has been conceptualized into a new
                                                     positioning statement and creative
                                                     strategy for State Farm.

“Life to me is a journey - you never know what may be your next destination.” - David Russell

                                                                  Positioning Statement
                                                State Farm Insurance is a company of talented,
                                                experienced and dedicated individuals with the
                                                common goal of establishing trusting, neighborly
                                               relationships in order to help people at every stage
                                                     of their life manage risks with confidence.

                                   The door represents whatever stage in life our target audience
                                   is experencing. The door will serve as a metaphor in all aspects
                                   of our campaign.
                                                                 “Whatever doorway you’re in,
                                                                 step through with confidence.”
Communication Style and Approach
We will address the target market as adults in a professional manner, involving music, symbolism,
types of media, and other interactive approaches. Young Adults are currently making life-changing
decisions, from graduating high school or college to entering the workforce. We want to establish a
relationship to help them feel secure as they step through life with confidence.

Objectives/Goals for the Target Market
                                            The main goal of the “Step Through With Confidence” campaign
                                            is to change brand perceptions of State Farm to be more
                                            relatable to the target market. As noted, at APP Advertising will
                                            accomplish this by communicating the idea that no matter what
                                            stage of life Young Adults are approaching, each can move
                                            forward with the confidence of quality coverage and trusted
                                            care of a State Farm agent.

                                            Another goal of our campaign is to improve the brand cohesion
                                            of State Farm. We plan to achieve this through a strongly
                                            consistent advertising theme, inclusive of recurring images.

Through this campaign we plan to differentiate State Farm as the best insurance choice for Young
Adults. This will require directly relating our advertisements to the topic of insurance rather than
avoiding it as other providers have done.

Rather than using humor, our campaign will be built on a foundation of discovery and involvement.
The “Step Through With Confidence” campaign will focus on the reliability of State Farm, implying
and communicating that customers will not be wasting money.

“Each of our lives is a path. To know this requires intuition and trust. If we are true to the steps we take, the travel makes
sense and the journey confirms itself.” -Lin Jensen

APP Advertising will employ the following different media to reach Young Adults:


        In this advertisement, significant life events are          This interactive print advertisements will put the
        placed within the door frames (from left to right):         theme of “stepping through the doorways of life”
        a new car, marriage, and a vacation with a child.           into action. At first glance, the red doors will appear
        The last door contains a State Farm office which            two-dimensional and simple. However, readers will
        illustrates that State Farm is there for Young Adults       be able to actually open the doors, each revealing
        when the doorways of life open. The red door frame          different scenes of life. The interactive quality of this
        is a consistent element within advertisements in this       advertisement will provide a greater recall of State
        campaign.                                                   Farm for Young Adults.


      The most powerful form of guerilla advertising will be      As a way of effectively reaching Young Adults,
      placing open State Farm branded red doorways at             door mats will be strategically placed in
      strategic locations. These doorways will be real and        locations that Young Adults frequently inhabit,
      fully-functioning (minus the walls), allowing pedestrians   both indoor and outdoor, including restaurants,
      to step through and actually experience the campaign        local businesses, and apartment complexes.
      theme. Doors will be placed at locations where Young        Door mats will be more commonly used than the
      Adults hang out, such as parks, college campuses, and       guerrilla open red doors, and will be integrated
      downtown areas. A door monitor will hand out rewards to     into Young Adults’ daily lifestyle. This will remind
      those who actually pass through instead of walking around   and encourage them on a regular basis to step
      the door. The purpose of these doors is to remind those     through life with confidence with State Farm.
      who go through them that they will step through with
      confidence with State Farm as their insurance provider.

                                                                  The college door hanger will be hung in
                                                                  dorms, apartment complexes, and Greek
                                                                  houses. The general door hanger will be
                                                                  hung on any door accessible, from hotel
                                                                  rooms to houses in neighborhoods. The
                                                                  door hanger is a creative out-of-home
                                                                  way to incorporate the campaign theme.
                                                                  In order to ensure that those receiving the
                                                                  door hangers are able to connect meaning
                                                                  to the guerrilla piece, media coverage of
                                                                  the campaign will need to be extensive.
                                                                  Similar to the door mat, the door hangers
                                                                  will remind Young Adults of the campaign
                                                                  theme on a daily basis.

Television Script
 Length: :30

                 VIDEO                                             AUDIO






 6. COUPLE COMES THROUGH DOOR              REALTOR (OC): Congratulations Mr. and Mrs. Johnson


 8. MIDDLE SHOT OF REALTOR                 VOICE OVER: Each stage of life is a doorway. With the
    WALKING THROUGH THE DOOR               superior support and advice of a State Farm agent,
    INTO A STATE FARM AGENT’S              whatever doorway you are in you can step through
    OFFICE. AGENT SHAKES HER HAND          with confidence.

 9. FADE OUT TO WHITE SCREEN AND           Like a good neighbor State Farm is there.

This television script depicts the lives of a few individuals as
they journey through doorways in life. Individual scenes are
representative of State Farm’s coverage. The tone of this
commercial is that 18-25 years old are at various stages in
life, and they can be confidence knowing that State Farm
will be there to help no matter what doorway they are
stepping through.

Radio Script

Title: Step Through With Confidence
Length: 00:30



MAN: Congratulations! Here are the keys to your first car.


WOMAN: Congratulations. I think this apartment will work out great for your first home.

         Step on in.


ANNCR: Each stage of life is a doorway. With the superior support and advice of a State
       Farm agent, whatever doorway you are in you can step through with

ANNCR: Like a good neighbor...

MUSIC: STATE FARM JINGLE (sung):..State Farm is there

The radio script will give two examples of life-changing
moments that Young Adults are typically experiencing. In
the conclusion of the radio spot, the message reinforces
the theme that with State Farm, Young Adults are able to
step through life with confidence.

Social Media

APP Advertising will introduce a competition, that invites 18-25 year old musicians to write and
perform an original song (of any style - lyrical or instrumental) describing the current “life’s doorway”
that each is in. Submission will be in the form of a video entry, including introduction and description
of the musician’s “doorway” as well as the actual song performance. After a 2-month submission
period, State Farm will internally select 10 songs for the final voting round. These 10 videos will then
be posted on the State Farm website for voting. The winning musician will recieve an expense-paid
trip to professionally record their song, which will be featured in a State Farm television commercial
later that year.

       • This will drive traffic to State Farm.com and will create buzz about the brand.
       • Promotion of the competition will be primarily achieved through social media outreach, on
         sites such as Twitter, Facebook, Myspace, ReverbNation, and on music blogs.

We will also introduce a Twitter-based initiative in which we will request that Twitter users describe
their current “doorways” in 140 characters or less. Each tweet must include the hashtag #State Farm.
Each tweeted “doorway” description will be entered in a random drawing from which 3 entries will
be selected per day. Each winner will recieve a $20 gift card (gas, iTunes, etc.) Each tweet entry will be
responded to with a direct message saying “Thank you for sharing your doorway with us. Remember
that whatever doorway you’re in, you can step through with confidence with State Farm.”

Our final proposed social media initiative is similar to what’s already being done by State Farm. We
commend the current social media efforts of the brand, including outreach and shared content
through sites like Facebook, YouTube, & Twitter. APP Advertising plans to increase brand favor of the
18-25 year old market by tweaking current initiatives to more specifically meet the target’s interests
and concerns. This includes sharing content that is of significance to a younger market, such as
popular music and art. Issues specific to the target, but not closely related to insurance, should also
be addressed.

                                         The MiDoor iPhone application will be free to download and will
                                         allow Young Adults to take photos through a door “frame” and
                                         then post those photos to State Farm’s Myspace or Facebook
                                         pages. The user will also have the option to save their photo to
                                         their own photo album. Each photo will display the user’s name
                                         embedded at the bottom of the photo, saying, for example,
                                         “Sara’s Doorway.” As a cautionary method, the photos must be
                                         screened to ensure that inappropriate photos are not posted.

                                                                    Our research shows that Young Adults use the
                                                                    Internet daily. Mydoorway.com will be an efficient
                                                                    way to measure the volume of site traffic initiated
                                                                    from this campaign. Photos on the homepage will
                                                                    be supplied from the uploaded photos from social
                                                                    media networks. These photos will rotate between
                                                                    10-15 photos daily. Each set of 10-15 photos will
                                                                    be changed on a regular basis, and will therefore
                                                                    showcase a large amount of Young Adults’ actual
                                                                    doorways, creating a highly interactive feature. The
                                                                    site will also educate users about specific insurance
                                                                    terms. Lastly, the game “Doors of Life” (which will
                                                                    be explained later) will be accessible.

Out of Home
      Transit advertising will be displayed through
      public transportation. On their door entrances,
      buses will feature a red transparency, which
      will resemble the red doors of our campaign.
      The doors will communicate the message that
      wherever Young Adults are going, they can go
      with confidence with State Farm. When bus
      riders walks through the doors onto the bus,
      they will see “Step Through With Confidence”
      and the State Farm logo on the ramp and/or
      steps in the entranceway.

                                   Billboards will be oriented vertically rather than the traditional
                                   horizontal format. The billboard will appear as a door frame with
                                   a real protruding door, made to actually open. The “inside” will
                                   feature State Farm’s logo and the campaign slogan. The purpose
                                   of the billboard is to create differentiation among other billboards
                                   along roads. Drivers or onlookers will be interested to take a second
                                   look, which will aid in creating increased brand awareness.

Part of the promotional campaign is to send mailings to those receiving their driver’s license for the
first time. The piece will congratulate them on their recent accomplishment, instilling confidence
in the new driver. The goal of these mailings is not to sell insurance, but instead to begin building
relationships with this group at an early age. These mailings encourage a relationship between
agents and clients. Those receiving the congratulatory letters will then have a more positive image of
State Farm.

To build a relationship with those taking their first steps
onto college campuses, we will provide gift boxes
placed on students’ beds on student orientation days.
The box will feature a door on the front and will include
a businesscard for a local State Farm agent, State
Farm Post-It notes, lanyards, and key chains. The gift
boxes will serve as a welcome to the next step in life,
which will build on the relationship that had been
established since they turned sixteen.

State Farm will sponser half-time events at college sports events. Obstacle courses will begin with the
selection of two random fans from the crowd. They will participate in fun games where the winner
receives a $25 State Farm gas card. These half-time events will take place on college campuses
throughout the United States.

                                                            This promotional board game will be incorporated into
                                                            interactive web games and iPhone applications. The physical
                                                            board game will be given away at promotional events or in
                                                            State Farm local offices. The game is a rendition of the game
                                                            of LIFE in which the player travels through specific stages of
                                                            life with the help of a State Farm agent. The game pieces
                                                            will include a standard set of dice, black, white, grey, and
                                                            red cars, plastic people pegs, and a deck of “chance”
                                                            cards. Each doorway on the board game will represent
                                                            one of life’s milestones. For instance, the fist door will say, “
                                                            Congratulations! You just bought your first car! Step through
                                                            Life’s Doors with confidence.”

    Air fresheners will serve as promotional items that will be
    handed out to potential customers, who will be reminded
    of State Farm’s positive message every time they are
    traveling in their car.

“One step is the beginning of a journey.” - Mike Smith

For the purpose of reaching State Farm’s maximum opportunity with the target audience of 18-25
year olds, APP Advertising will be focusing attention on both traditional and nontraditional media.
Traditional media capable of reaching the largest audiences include television, online television,
magazines, billboards, and radio. Nontraditional media include Internet, transit, guerrilla, and social
media. We will also incorporate various promotional events that will encourage active participation
from Millennials with the State Farm brand. Involvement from the target market will spark a greater
interest in State Farm.

For reach and branding impacts, 30-second spots will be placed on the following network, cable,
and online outlets:

        • NBC: Dancing with the Stars – Saturday Night Sports – Lost – Flash Forward

        • FOX: American Idol – 24 – House

        • CBS: NCIS – CSI

        • ESPN: College Football – NFL – NCAA Tournament/”March Madness” – Sportscenter

        • DISCOVERY CHANNEL: Shark Week – Planet Earth

        • TBS: The Office – SAG Awards

        • HULU: Streaming Films – Colbert Clips – Time-shifted TV

We will also place commercials on ethnic television outlets such as Hola, Telemundo, BET, and Colours

Full-color, full-page advertisements will be placed throughout the year in printed and online editions
of magazines. These magazines include English and Hispanic editions of Cosmopolitan (the #1
women’s magazine) and Time Magazine (the favorite magazine of college students). Additionally,
periodic advertisements will be placed in Sports Illustrated during the high-traffic months of fall
football and “March Madness” basketball. We will also place ads in Ebony.

Our research indicates that the Internet is a popular resource for Young Adults. In particular, sites such
as Facebook, YouTube, and Pandora have seen vast growth since their inception. For this reason,
these sites will be the primary advertising sources.

Social Media
Brand ambassadors will be used to promote positive word-of-mouth through Facebook, Twitter, and
other blogging sites.

While Generation Y has become more involved with online streaming media in comparison to radio,
they do still tune in to their community and campus radio stations on a regular basis. APP Advertising
will be running 30- and 60- second radio spots on the top two college sports and community news
markets in each state.

Billboards will be placed in high-traffic areas in conjunction with local State Farm offices. These
billboards will be vertical in shape to better display and reinforce the doorway symbolism.

We will place advertisements on buses and in transit station in mass transit markets such as Chicago,
New York City, Boston, and San Francisco. Additionally, we will advertise on municipal transit vehicles
in mid-sized markets such as St. Louis, Charlotte, Cincinnati.

Guerrilla advertisements will capture the attention of Young Adults through unconventional and
unique resources that will engage their minds and provide State Farm with a more innovative image.
We will strategically place door mats, door hangers, and physical real-size doors in both outdoor and
indoor areas with high volumes of target market traffic. These locations will include shopping malls,
college campuses, local businesses, and parks.

Promotional advertising will create a positive “buzz” and will allow Young Adults to become more
involved with our campaign. Promotional items will include:
       • Sponsorship events
       • The “Doors of Life” Game
       • Auto air fresheners

Media Calendar

                                     MAY   JUN   JUL   AUG   SEPT   OCT   NOV   DEC   JAN

                    Cable TV
           The Discovery Channel


                Sports Illustrated


Social Media


Out of Home


Our State Farm Media plan, as illustrated here in
the plan calendar, shows that the plan provides
coverage throughout the year with added
coverage in the important spring and fall months
at a total expenditure for media and promotions
of $32,000,000.

The budget for this plan also comprehends
production costs, agency fees estimated at a
maximum of $4,000,000, and holds another 10%
($4,000,000) in reserve to cover contingencies
and any special marketing or media opportunities
that may arise during the campaign period.

JAN   FEB   MAR     APR        COST

                           $     2,848,450.00
                           $     4,113,743.00
                           $     3,667,800.00
                           $    10,629,993.00

                           $     2,364,265.00
                           $     1,953,874.00
                           $     1,452,147.00
                           $     5,770,286.00
                                                Media Budget
                           $      956,252.00

                                                !"#"$%&%'()          )
                           $     1,112,000.00
                           $     3,449,280.00   )      *"+,'-.)      /0123452556)
                           $     2,116,800.00   )      789#")          /:2;;124<3)
                           $     6,678,080.00
                                                )      =(#%(")          /5:324:4)
                           $       147,878.00   )      )             )
                           $     2,079,205.00
                           $     1,424,363.00   >8?8@%("&)             /323;<21<1)
                           $       160,694.00   )      )             )
                           $     3,812,140.00
                                                A(+"-("+)              /62<0420B1)
                           $       32,000.00    )      )             )
                           $      750,050.00    C'D%8#)>"E%8)             /642111)
                                                )      )             )
                           $       940,900.00   F8E%')                  /;:121:1)
                           $     1,407,600.00   )      )             )
                           $       375,200.00
                           $     2,723,700.00   =G+H'IHJ'K")         )
                           $       647,499.00   )      !-8(&%+)         /5B12511)
             TOTAL MEDIA   $   32,000,000.00
                                                )      L%##9'8-E&)     /02B1;2311)
                                                )      MG"--%##8)       /6;:2411)
                                                N-'K'+%'(&)          )
                                                OP$"(+&)                /3B;2B55)
                                                )      )             )
                                                !"#$ %&%'($          )*+,---,---$$
                                                )      )             )
                                                N-'EGD+%'()7'&+&)    )
                                                Q)R?"(DS)T""&)          B21112111)
                                                )      )             )
                                                U01VW)                 B21112111)
                                                )      )             )
                                                )      %./01$        )2-,---,---$$

“You’ve got to get to the stage in life where going for it is more important than winning or losing.” - Arthur Ashe

Proposed Appalachian Advertising State Farm Campaign Evaluation
To assess the effectiveness of the State Farm “Step Through With Confidence” campaign, APP
Advertising proposes the following steps to evaluate the success of the year-long campaign:

        • A Web Tracking study will monitor click-though rates to State Farm agent sites and/or
          online quote request pages. The click-through rates will be related to inquiries and,
          ultimately, sales.
        • Social media buzz will be monitored to determine WOM regarding both the reaction and
          responses to the State Farm “Step Through With Confidence” campaign and to any change
          in perceptions and favorable consideration of State Farm Auto or Renter’s Insurance.
          Further, data will be correlated to Brand Ambassador Activity to determine if the
          ambassadors were favorably influencing the word-of-mouth.
        • At the six-month, mid-campaign point, and then again at the conclusion of the campaign
          year, APP Advertising will re-sample the target audiences. Focus groups and a survey similar
          to those administered prior to the start of the campaign will measure improvement in top-of
          mind awareness, brand personality, consideration, and advertising recall.
        • Lastly, purchase tracking and market share evaluation will determine if the communication
          plan resulted in sales and market share gains, especially among the target 1-25 consumer cohort.

We at Appalachian Advertising believe that addressing the needs of the 18-25 age group with
messaging and methods that speak to them as responsible, loyal, collaborative decision makers and
in a sophisticated way that doesn’t talk down to them is an important consideration. Further, State
Farm’s messaging should present them with the thought that whatever doors life puts before them in
their progress to full adulthood and all the aspects that come with it: State Farm will be there to help
them make smart choices and step though with confidence. Of course the doors of life don’t stop
appearring after age 25… and State Farm will continue to be there.

Appalachian Advertising’s mix of traditional, non-traditional, Guerrilla, promotions, events and
sponsorships will provide State Farm a broad spectrum of Generation Y touch points. As a result, this
generation that is not actively thinking about insurance will encounter it periodically and over time, in
their mind-of-minds, when they do approach the task of selecting insurance, State Farm will emerge
as a first brand to consider.

That said, we can’t say enough about how excited we at Appalachian Advertising look forward to
working with State Farm and State Farm agents each step of the way to help State Farm become
the good, no make that great, neighbor to this new generation that it has been to scores of past

Thank you.
                                                                Leah Ledford, Art Director
                                                                Dylan Carver, Copy/Art
                                                                Jonathan Roten, Assoc. Creative Director
                                                                Sara Collins, Copy/Art

                                                                Katie Shedivy, Research & Strategy Director
                                                                Melissa Burton, Project Manager
                                                                Kyndel Kimrey, Account Executive
                                                                Greg Bear, Copy/Art

                                                                Meghan Appelt, Creative Director
                                                                Mallory Hole, Copy/Art
                                                                Christine Baratta, Media Director
                                                                Roger Bodo, Advisor

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        Insurance. Web. 21 Mar. 2010. <http://www.statefarm.com/about/media/fastfact.asp>.


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