Meerkat brands murder mystery; and fame via fish porn

Dominic Mills examines the case of the price comparison websites that killed off advertising budgets. Plus: Why Iceland’s image was stuck in the past until a seductive tuna steak appeared.

I don’t normally spend too much time thinking about the activities of the Competition and Markets Authority (CMA), aka the people who see whether/how we’re ripped off by those rapacious capitalists that the Labour Party has in its sights.

But the news BGL, owner of Compare the Market, may postpone a flotation pending a CMA investigation into what it likes to call ‘most-favoured nation’ clauses in the home insurance market.

Let me be clear: there’s no indication this investigation specifically targets the meerkats. It’s framed as a general dig around the business models of what some call the PCWs, aka price comparison websites, or what the CMA calls DCTs, which in plain English means digital comparison tools – i.e. Moneysupermarket, Go Compare and so on.

It’s not the first investigation into the PCWs and it probably won’t be the last.

At issue this time is whether the DCTs insist insurers offer their cheapest deals exclusively through their website. If they do, then clearly those insurers are blocked from offering the same prices elsewhere. Ergo, lack of competition. Ergo, anti-competitive behaviour.

But how does this link back to advertising? As always, follow the money trail.

You might hate them, but there’s no doubt that the airwaves are dominated by the meerkats, the opera singer and the twerking dancers, supported recently by Skeletor and He-Man.

And while the PCWs are ubiquitous on TV, many of their suppliers (i.e. home insurers, car insurers, utilities, broadband suppliers) have, if not disappeared, faded away somewhat in terms of TV exposure. Which is wrong. Because as well as timely price communications, you need fame.

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As a consumer of advertising, I don’t have a problem with the lack of dull insurance and utility ads. The PCW ads are a damn site more fun.

The exception, both by TV visibility and entertainment value, is Direct Line. And guess what? Direct Line has conspicuously chosen not to do business with the PCWs. It even used to run ads making this clear.

So why do we see so few ads from Direct Line’s peers (who are so back of mind I can hardly think of any)? Because they’re spending all their money on commission to the PCWs. As the CMA notes, they believe it’s cheaper and more effective to redirect their marketing budgets away from TV and pony up the commission.

If that is the way they choose to do business, that’s fine. But as anyone who has ever used a PCW knows the key for any insurer is to a) pay the commission and then b) figure as high as possible in the rankings, attained by having the lowest price.

Thus they are on a slope that goes permanently downhill, and they can’t get off because when the consumer renews they’ll be looking for the next ‘deal’.

For the most part, consumers don’t care. The PCWs save them a lot of effort. Rare is the person who tries more than one PCW when they’re in the market for insurance (I did, and even though I saved myself £20 I regretted the wasted time).

They invariably think they’ve got a deal, even if there are huge commissions exchanging hands or some dirty ‘most-favoured nation’ stuff going on behind the scenes that distort the market or render it anti-competitive.

It may be fanciful – or too late – to suggest insurers and utility suppliers could escape what is essentially a trap of their own making by advertising themselves out of the problem. They would surely have to pimp up the brand or the benefits (like Direct Line) rather than focus on price, and that might be difficult.

On the other hand, if the CMA finds dirty goings-on in home insurance – which might equally apply to other areas too – then the opportunity might present itself.

Until then, allowing for a bit of journalistic licence, we’ll conclude that the meerkats and their peers have killed the brands.

Fame and fish porn

I know Iceland has been trying hard to shift its image away from Kerry Katona frozen party food (sold at prices so low you worry about the provenance) for a few years now.

Its party trick is a simple one: frozen food is much fresher than so-called ‘fresh’. The mechanic: making frozen fish as pornographic as, well, M&S food.

This has certainly been getting a few PR hits, such as this story in the Mail last month.

It’s tough going. Market share seems stuck at about 2.1 per cent – although that perhaps is an achievement, given its tightly defined position, the relentless march of Aldi and Lidl, and relatively limited media firepower.

Making every media pound count therefore makes a difference, but so too does the power of fame. My image of Iceland was stuck in the past till I saw this piece of fish porn last month.

In terms of cost outdoor doesn’t really stack up against digital (happy to listen if OOH people can prove otherwise) but in terms of fame it certainly outguns it, and this eye-catching poster did the trick for me.

All the targeted Facebook and YouTube inventory in the world – like here and here – helps reinforce the message but won’t do the trick of encouraging a reassessment of Iceland half as effectively as a broadcast campaign. (And by the way, the poster site I’ve shown here is a lot better in terms of footfall and visibility than might appear).

Stage two – live as of now – is about persuading the punters that frozen doesn’t mean cheap. Again it involves the fame strategy, this time led by TV. When budgets are tight though, it must be easier to plough all your money into digital. Plaudits to media agency the7stars for persuading Iceland to go against the grain.