GEICO, one of the industry’s top spenders in radio advertising, has laid off a large portion of its marketing department, reports have revealed.
The insurer is also putting its account with Horizon Media – which has represented GEICO for 25 years – under review. MediaLink will be handling the review, sources have told marketing magazine Ad Age.
Based on spot volume, GEICO was radio’s 13th largest advertiser for the six months of 2022. According to Media Monitors, the insurer aired 546,753 spots on AM/FM radio during the period.
As reported by Ad Age, GEICO’s staff cuts come after a series of challenges – the insurer recently announced that it will raise rates in Illinois by 6% and shut 38 of its offices in California, halting sales of insurance in the state. The decision to lay off marketing staff also comes days after other employees announced their intent to unionize.
It was also highlighted that GEICO had just named Damon Burrell as its chief marketing officer in April earlier this year. Burrell joined GEICO from Estee Lauder, where he also served as CMO of the cosmetics company’s North America business.
Ad Age reached out to GEICO for comment, and the insurer gave clarification that it would offer associates positions in other departments when possible, and that it would be offering severance benefits and outplacement services.
"Like most large companies, we continue to review and adjust our staffing to respond to changing customer and business priorities,” the insurer said in a statement, adding that it has "not ended relationships with any of our media or marketing partner agencies."
eMarketer’s Insider Intelligence reports that insurers have long relied upon traditional advertising channels such as cable TV spots and radio ads, but that could soon change. The market research group has forecasted that about 33.1% of the US population will cut their paid TV cord this year, which could signal a significant shift from linear to digital video. But Insider Intelligence also noted that the insurance industry’s digital ad spending is slowing down in 2022, compared to last year, though spending this year still hit an impressive $12.15 billion.