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The passage of the Affordable Care Act has a wealth of impacts, but for insurance companies, one of the greatest might be the influence on the way they market their offerings. Traditional methods mainly entailed getting companies to select a particular insurer to cover their employees. Thus, it was a traditional business-to-business (B2B) market.

Today, that B2B market remains important; a majority of U.S consumers still get their health insurance through their employers. That means they have no choice about which service provider they will use. However, for the millions more Americans who will now be covered under the Affordable Care Act, their purchase of insurance is an individual consumption choice. To attract these buyers, insurance firms need a different approach, namely, business-to-consumer (B2C) marketing methods.

This shift requires the insurance companies to take at least three consumer traits into consideration in developing new marketing approaches. First, for nearly 70 percent of individual insurance purchasers, the prepurchase and research stages take around a month. Second, during their consideration stage, nearly half of these consumers rely on search engines to find additional information. Third, because of their high involvement in the purchase decision, insurance consumers refer to an average of 11.7 sources of information before making their choice.

These trends imply a major shift in the tactics used by insurance companies. For example, in their search engine marketing, the companies need to make sure they are targeting appropriately. A recent investigation determined that different Blue Cross Blue Shield offices, which compete for geographically distinct customers, were all competing to achieve the top ranking for the same search terms. Thus their search engine optimization costs were skyrocketing, simply because the firm’s various offices were competing with each other to appear at the top of the search engine page. But the high costs were doing nothing to increase each office’s sales to individual consumers.

The new health care market also features a new member that insurance companies never encountered in their B2B transactions: aggregators. These firms gather information from multiple insurers in one place, to help consumers make their choices, and they also generate leads for insurance companies. When insurers sell directly to large companies, no such services are necessary, because the corporate clients likely have human resource staff who can do the research themselves.

Thus this recent legislation is making the insurance marketplace far more complicated and crowded, with implications for not just lawmakers and consumers but also insurance companies and the new aggregators.

Source: Colt Whittall and Navneet Virk, “Obamacare Means Insurers Need to Get a Lot Better at Search Marketing,” Advertising Age, October 4, 2013

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