ADVERTISING men sometimes call advertising ‘business insurance,’ and wonder why men who insure the world against every imaginable catastrophe do not insure their own business against the destructive power of silence.
If advertising is business insurance, why do not insurance companies advertise? The few who do are glorious pioneers and worthy of all praise, but the sum total of their efforts is far too small to form that body of advertising which is necessary to create a new public opinion. Just how small that sum total is may be estimated by comparing figures for a few selected advertising mediums. In this comparison and in the course of this article the word ‘insurance’ is used to cover all forms of insurance, not only the grand divisions known as life, fire, accident, indemnity, and marine, but protection against other catastrophes quaintly described in the contracts as ‘acts of God.’ The various applications of insurance vary greatly one from another as the actuary or underwriter regards them, but they all have one quality in common: they lack and need that form of public good will which can come only from public knowledge.
In twelve leading magazines, as checked by the Curtis Publishing Company, the total expendit ure to advertise insurance in 1926 was $1,064,269, while for the motor car and its accessories it was $30,955,298. The twelve magazines checked, while few numerically, afford what the statistical ‘sharps’ call a good cross section. It is safe to say that, were the comparison extended to include all advertising mediums, the odds in favor of the motor car would be greater. It is sufficient for our purpose to leave them at thirty to one. The question is, what peculiar need, or urgency, or intrinsic quality makes it profitable to advertise motor cars thirty times as much as insurance is advertised? What has the motor car in the way of interest, importance, necessity, desirability, or potential market that insurance does not possess? Measured by human needs and human standards, insurance goes deeper, is more potent to stir our emotions, and has a profounder influence on our destinies. Insurance companies are selling an almost priceless commodity — protection, freedom from worry, peace of mind. As old Omar said of the wine-sellers: —
One half so precious as the stuff they sell.
Certainly they do not buy advertising. In proportion to its opportunity, insurance has never been advertised. Insurance is sold by an army of salesmen, patient, resourceful, and intelligent, whose ingenuity is taxed to offset and overcome the reticence of the companies that employ them. The present volume, admittedly large, is due to their untiring industry, unaided by receptive knowledge on the part of the public. Most of what the public suspects about insurance is wrong, including the suspicion that the agent is a nuisance. We picture insurance as a vast office building, filled with vice presidents and adding machines, and the agent as a persistent haunter of our steps, curious about the date of our birth, who finally gets us in a corner and wins our reluctant consent to be made a sharer in the most splendid coöperative institution modern civilization has devised.
One needs no figures to realize how great the unnecessary expense must be. He need only recall the time spent by one agent in trying to reach and sell him. And if a prospect sells himself he still must pay the agent. He cannot go to the company and buy insurance over the counter. And that is right, as things are. If the system must be, it should be supported. But how much easier the work of the agent if his customers wanted insurance; if he could sit in his office, like a nose-andthroat specialist, while people crowded his reception room to be shown in one by one! Why do people stand in line to buy postage stamps or railroad tickets, and let the insurance agent stand in line to sell them insurance they need far more urgently than they ever needed to mail a letter or make a journey? The answer is habit. The insurance companies have elected to do business that way; the public has acquiesced. Some services are sold. Others are bought. It is the habit for insurance agents to chase customers, and it is the habit for travelers to chase ticket agents. But habits are the result of education, and the most powerful educator to-day is publicity. Advertising could reverse this situation, and give the insurance companies the strategical position of active demand.
The difference in thinking is sharply shown by comparing one group of business men with another. No motorcar company could think of selling without including advertising. Advertising is as necessary and as inevitable as a factory. Insurance companies, with very few exceptions, have no conception of advertising. They belong in a different era. They continue to function as they started, with no awareness of the new world around them. No important industry is so archaic, so remote from modern life. Banks and trust companies are beginning to realize that they are human institutions as well as financial institutions, but insurance companies have never outgrown the actuarial conception of insurance. The present small volume of insurance advertising is powerless to affect this situation, not because it is not good advertising, but because the volume is small. The great force in advertising is group advertising, not coöperative, except as all advertising for any one industry is coöperative. It is the whole body of automobile advertising that keeps the motor-car idea alive. No one or two manufacturers could do it. Buick advertising sells Dodges as well as Buicks. The continued interest of the public in cars is more necessary to makers of cars than the demand for any one make of car. This is true of all products. The country is too large to be moved greatly by any one advertiser.
This conception of advertising applies especially to insurance. Insurance is an intangible, an idea, a service. Laws hedge it in and standardize it so that there is comparatively little room for choice. What advertising it does must, from the nature of the case, be institutional; that is, for the good of the whole body. Metropolitan Life devotes its space to teaching the value of health. Hartford Fire promotes fire prevention. Each of these campaigns helps all life and all fire insurance. But these two and a few others are too small to create the mighty chorus necessary to inflame the public mind and give to the word ‘insurance’ the power to penetrate the consciousness and arouse, quicken, and stir the interest that the words ‘motor car’ have. If insurance maintained such a body of advertising, to which each company contributed its just quota, insurance would be one of the best-known, most interesting, and most talked-about topics of our daily lives. A hundred campaigns as good as Metropolitan Life or Hartford Fire would do that very thing. With such a body of publicity, insurance would crop up in the news like baseball, radio, or aviation. Nearly every frontpage news story has its insurance slant — the Sherry-Netherland fire, the Snyder murder, the transatlantic flight. The insurance slant is not stressed in the news because the topic is of small interest to the public. The insurance companies confirm this state of mind by their destructive silence.
Things are not talked about because they are intrinsically interesting — they are interesting because they are talked about; because they are brought to our minds daily and hourly, and we are compelled to take account of them. Insurance could be one of those things if its message were delivered, not in small installments, by word of mouth, but by a volume of advertising comparable to the total volume of automobile advertising, but infinitely more interesting.
The advisability of advertising has been brought before the insurance companies frequently. The answer is that advertising men do not understand insurance — which merely means that insurance men do not understand advertising. The obligation rests entirely on the insurance companies. They are custodians of what has become a great public utility. Even if there were not the obvious selfish reasons for availing themselves of so great an aid to selling as constructive advertising has proved to be, they owe a duty to the public. Even if advertising did not increase the volume of insurance, or, which comes to the same thing, decrease the cost of selling, the insurance companies have no right to withhold from us the real story of insurance.
Many of the great life companies have mutualized themselves, making their policyholders members, whatever that may mean. It does not apparently mean that their policyholders learn any more about their companies, or any company, or life insurance in general, than they did before. But it should mean, should it not, that insurance is no longer the private concern of a small group of officers, but has become a public benefit of such vast possibilities that the public is entitled to such consideration at least as it gets from the selfish sellers of other products that it buys? There is something anomalous about an institution so necessary, so intimately associated with our daily life, which depends so much upon a public state of mind for its growth and prosperity, not availing itself regularly and systematically of such an efficient and inexpensive means of creating public opinion. It is just as possible to advertise ideas as it is to advertise goods. No institution or service has such a wonderful array of material as an insurance company. Its regular course of business is full of incidents of the greatest human interest, things that concern all of us closely and intimately. And all that good stuff goes to waste.
It is seriously asserted that there is no money for advertising; that only so much can be legally spent to secure business, and this is all given to the agents, who would be unwilling to surrender it or any part of it. Even if the objection were true, it would be negligible. Insurance companies are not maintained for the benefit of their selling staffs. If there is a better way of selling, the field men must adapt themselves to the new conditions. But the primary benefit of advertising is to make the work of agents easier, to enable the same men to write more insurance, or fewer men to write the same volume, because a changed attitude toward insurance will send the public to buy just as it goes to buy other things it has been taught to want — things, be it said, not so useful or necessary or desirable.
It is further argued that the money belongs to the policyholders, who will not look kindly on such a use of it. This argument was true once, in the days when insurance originated, before the public had accepted advertising as a part of its daily life. The public has changed its attitude, but the insurance magnates have learned nothing and forgotten nothing. It is the policyholders’ money that is paid to the agent — most emphatically the policyholders’ money. A goodly percentage of our first payment goes to him, and some fraction of subsequent payments, which, as has been said, is only right and fair as long as the present cumbersome method of selling is maintained. The purchaser pays the cost of selling on everything he buys, and rejoices that modern methods reduce that cost; and he has accepted advertising on this basis, that it makes so many things so accessible geographically and financially that earlier generations never knew. But insurance is not one of those things. It is an anachronism in this day, which is a great pity, for it has all the elements of a spectacular success.
Insurance is the greatest single unadvertised possibility in our modern scheme of living. It is bound to realize that possibility in the end. It is still largely in the hands of the pioneers, the men who made it possible and made it great, but these men are insurance men first, last, and always. They cling to the system they have developed, unaware of the great change that has come about in the world around them. They have not learned, for instance, the value of publicity for its own sake, apart from its material benefits.
The whole world has at the moment been thrilled in contemplating the feat of a gallant young American who flew alone in one continuous flight from New York to Paris. It was one of those happenings which make us proud of the human race. Each of us went about our task with a little more enthusiasm. The world where such things could happen was a pretty good place after all. Suppose it had been possible for Lindbergh to take off without publicity. Suppose for some unimaginable reason the newspapers did not consider the event news. Remember, the Wright brothers’ first flight was not considered news. And so there would have been gathered together down there on Curtiss Field a little group of well-wishers, backers, and airmen. All that night, instead of hanging breathlessly on scraps of news while Lindbergh winged his way through night and silence, the civilized world would have gone about its appointed business, not knowing that a great event was in the making. When Lindbergh reached Le Bourget what happened would have been something like what Lindbergh, with his innate modesty, imagined would happen. He would have landed in an empty field, watched by airmen and others who happened to be on the spot; he would have told them what he had done, and they would have been slow to believe him. He would have parked his plane, hunted up a mechanic, got a cab, and set off to Paris to present his letters of introduction and convince another thrilled group that he had really flown across the Atlantic.
What a loss that would have been to the known world! The feat would be just as fine, just as brave and skillful and wholly admirable, but no one would know it. We should lose all the thrill, the inspiration, the enhanced faith in humanity that the knowledge of it gave us — the take-off, the long night of anxious waiting, the safe arrival, the spontaneous reception; two whole hemispheres warmed and stirred and drawn together, not by what young Lindbergh did, but by the high privilege of knowing what he did, and sharing it. Most of the benefit of that flight would have been lost without publicity. It is not unknown good, but known good, that benefits the world. And so with insurance. The life companies have written $11,000,000,000 new insurance in the last twelve months, and not one of us a whit wiser or better or more uplifted because of that fact. It all happened off stage. Yet the stories behind that vast gain would move and stir us, did we but know them, as did Lindbergh’s flight or the Mississippi flood.
What holds the insurance companies from advertising is partly indifference and partly ignorance. They feel no need of effort. They are prosperous and content. Also they have no conception of what advertising could and should do for them. They think of it only as a means of immediate selling, which they say they do not need. They refuse to consider its larger and more remote influence, the creation of a public concern about insurance. The public mind is full of a number of things in which it takes great interest. Those things are put into its mind by suggestion, either by premeditated advertising, as the motor car or radio, or by spontaneous publicity, as baseball or the Atlantic nonstop flights. In any case the public talks about what it hears or reads about. The inherent intrinsic interest of the subject is unimportant. A body of advertising called into existence by all the insurance companies, — life, fire, marine, throughout the list, — the component parts varying in size according to the resources and needs of the individual companies, composed of the moving and stimulating stories that insurance agents now tell their prospects across glass-topped desks, would, when added together, prove a powerful awakener of public attention and equal in human interest many of the stories the newspapers feature with seventy-point type on their front pages. Whatever argument in favor of an individual company its advertising put forward would be immaterial. The Metropolitan Life, by its admirable presentation of the value of health and the importance of preserving it, is not primarily promoting Metropolitan Life — it is promoting insurance. What it gets is good will, but it benefits all other life companies. If all other life companies joined hands, each selecting its individual note, the message would get over. And so with fire, accident, indemnity, marine, and so forth. What is demanded by the logic of modern business is enough advertising to make insurance the vital topic it deserves to be.
It may be that the insurance magnates have no more inspiring conception of insurance than the public has. Perhaps they too consider it the prosaic, statistical, unhuman business that it appears to us to be. Long association with balance sheets, mortality tables, and actuarial figures is apt to give this point of view. If so, it would be worth their while to sit at the feet of some of their better agents and learn what a moving tale of fire and flood insurance has to tell. Not even the stories Scheherazade related to her spouse have more sustained interest than the rôles insurance plays in human destiny.
If insurance were being presented constantly to all who can read, in terms of living, in terms of man’s daily interests and dreams and ambitions and affections, — as one of the basic things of life, like getting on in the world, or marriage, or health, or recreation, — and especially if all the picturesque and entertaining stories which grow up around the practice of insurance were used, the sight of the word ‘insurance’ in print would be the signal for such interesting and agreeable mental pictures as accompany the words ‘raise in salary,’ ‘home run,’ or ‘tax reduction.’
Of things that are basic in us, resting on natural and primitive instincts, self-preservation and self-perpetuation have always been considered two great ones. Self-preservation includes everything from a pay envelope to dodging an automobile. Self-perpetuation includes not only the great function of bearing and raising children, but also every yearning for posthumous fame. The man who gives one hundred thousand dollars to found a public library is moved by practically the same motive as the man who brings up a fine family, though probably it is easier for many men to earn a hundred thousand dollars than to raise a fine family.
I have been reading an interesting book called This Believing World. It is a history of religion. It shows that fear is the origin of all religion. Primitive man found himself at the mercy of forces which he did not understand.
Rain, hail, lightning, flood, and fire snatched away his humble store of food, his flimsy hut, or his family. There seemed to be no reason for these happenings. He believed that they were caused by malignant spirits which were hostile to him. He tried to find some way to propitiate them. By charms, fetishes, totems, sacrifices, and rituals he endeavored to appease the enemies he believed lived in the forces of nature, and out of this fear of the unknown grew the first primitive religion. As man became more civilized and intelligent, and learned more about the world around him, his religion kept pace. He did not lose fear, but he became wiser about it; and when he was intelligent enough to know that religion had nothing to do with the forces of nature at work in the world, he invented insurance, the modern and scientific method of mitigating the slings and arrows of outrageous fortune.
Indeed, much of the world’s folklore, Greek and older myths and legends, and many a fairy tale are based on an instinctive but blundering groping for insurance. Achilles’ mother bathed him in the Styx to make him immune. How many legends rest on the idea of propitiation of some impending evil, or providing some armor or charm or rite to ward off the dangers surrounding the adventure of life! And what is insurance, all insurance, but preparation to mitigate the accidents of fate, to soften the blow, to render one’s self, family, income, possessions, as safe as possible from what may happen?
Another human instinct out of which insurance grows is coöperation. Cooperation is the finest flower of civilization. When hundreds of thousands of people are washed out of their homes by the overflowing Mississippi the nation passes the hat and responds with millions to care for the refugees. This is spontaneous coöperation. But if every one of the dwellers in the lowlands bordering the Mississippi had been for years paying a small sum annually to insurance companies to provide against losses by flood, that would have been organized coöperation. Insurance is organized coöperation. It is a form of public utility.
Millions of doughboys came home from France with life insurance in force obtained under unusually favorable terms. They could not hope to start again under such lenient conditions — insurance furnished at cost by the Government with the privilege of extending it at the same low rate. One would think these young men would cling to this very tangible asset. Instead, they dropped it with what seems like amazing indifference. It was not their fault that they placed so low a value on the privilege. The blame rests wholly on the insurance companies, who do not value their own service highly enough to tell the people about it and make it mean something to every human being. If these same young men had found themselves with motor cars or radio sets which they would own on making a few additional payments, the result would have been quite different. They want motor cars and radio sets. They do not want insurance. And this state of mind measures the gap between advertised and nonadvertised commodities — the known and the unknown good.
The need of insurance is a basic need — primal, intuitive, fundamental. Self-preservation, yearning for immortality, love of family, ambition, thrift, fear, the sad aftermath of war, the sustaining solidarity of coöperation, all demand and are to a great extent met and satisfied by some form of insurance.
Insurance runs up and down the whole gamut of human emotions, interwoven with all our hopes and fears, a human service if there ever was one; and the industry as a whole continues to present to its public a face as cold and inscrutable as that of the Sphinx. To proceed from the general to the particular, allow me to exhibit a page from my own experience, an intimate and personal page, which will show why I am a believer in insurance and at the same time a critic of its remote and unfriendly attitude toward a public it needs and which needs it. I am, I believe, what almost any life company would consider a good customer. Last year I paid to the largest, company in the world premiums aggregating something over $23,000. I am chagrined that my patronage does not create a ripple on the smooth surface of that company’s complacence. The telephone girl is taught to answer your call with a smile in her voice. The United Cigar Stores salesman is expected to say ‘Thank you’ for the smallest purchase. My tailor and my haberdasher write me letters to tell me how much they appreciate my patronage. It is the spirit of the age that business shall acquire the social amenities. But during all the years that I have been paying what are to me large sums to my insurance company I have never had from it a single ‘thank you.’ To it I am just a number, like a convict in Sing Sing. When even the most remote industries, the public utilities, the banks and trust companies, even some departments of the Federal Government, realize that we are after all just one big family, and extend the hand of good fellowship through advertising, insurance companies maintain their splendid isolation and refuse to establish a basis of mutual understanding, The telephone company, a monopoly that would seem to have little economic need of advertising, has reaped a rich harvest of good will from its sincere and informing talks with the public. It has far less need and much smaller opportunity than insurance.
The form of insurance of which I buy most is what is known as annuity. It is less popular in this country than in England, and there was little demand for it. But it fitted my peculiar needs, and the story of how I came to that conclusion is pertinent to this discussion. I am engaged in a race with deafness. I have been deaf all my life and am growing deafer as I grow older, facing the menace of diminished earning power. I desired to establish an income which would provide for me as long as I lived, and which would be outside of my control. If deafness interfered with contacts by which I earned my living, it would equally interfere with the intelligent investment of my own funds. Men learn about good investments from each other, often in casual conversation. A deaf man is dependent solely on himself. It seemed a great privilege that I could hire a competent organization to invest a certain portion of my savings and pay me a greater return on it than I could receive from other investments, however fortunate, at the risk of leaving in the company’s hands all that I had not used before I died.
I have bought freedom from worry about ways and means for the rest of my natural life. An organization, safeguarded by restraining laws, is bound by contract to pay me a certain stipulated amount as long as I shall need it. The other day I drew a check for $16,012 and sent it to that company. It was quite an event in my economic life. It was the final payment on the largest of my annuities. I had been hard put to it at times to get together the money to meet the payments, but I had at last achieved this one ambition and had as far as was humanly possible propitiated one of the enemies of mankind. But while it was a red-letter day for me, it was just Tuesday at the insurance company’s office. Promptly I received the standard receipt — a green slip, filled out by an adding machine. No human hand had touched it. No red and gold ink marked it as the special and final payment, the goal, the capstone, the magna charta of my new liberty, the privilege of living free from at least one form of worry as long as life should last. I wrote for information. This was the final payment, was it not? And was my understanding of the policy the correct one ? In two weeks came the reply. My understanding was correct. The payments would begin on such a date. Next! Just like that. It was as hospitable as lunching at an automat.
I have given this incident with so much detail, not because I have a grievance, which I have not, but because it is typical — typical of all my relations with this company, typical of everybody’s relations with all companies. It is intended to show the dire need the insurance companies have of some means of expression, some way of reaching the public mind with a message that will offset their standardized steel-trap method of conducting their business. They need the humanizing influence of trying to explain themselves to the public.
The story of my unusual annuities came to the attention of one of those exceptional insurance agents who are building up their business along lines of human relations. He asked me if I would write him a letter telling him the story I have told here, and allow him to use it as a means of interesting others in old-age insurance. I would and did. He tells me that my letter has been a great help to him; that through it he has sold a great deal of such insurance. That letter is an advertisement, a human document, possessing more intrinsic human interest than all the financial statements ever published. And the insurance companies have millions of such stories at their disposal, the stuff that life is made of, which need nothing but publicity to change the popular conception of insurance and make all agents as welcome as this particular insurance agent is wherever he goes.
The value of advertising is not in question. Advertising exists as a force in modern life as certain forces exist in nature. Architects design and build structures, relying confidently on the law of gravitation. If a building falls down, it does not disprove the law. It merely shows that the architect did not understand the law. It is the duty of insurance companies to study advertising. That duty is imposed upon them by public opinion, by their obligation to that public to consider everything which affects the efficiency of their administration. The findings and the recommendations of the Hughes Commission made life insurance safe for democracy. It defined, among other things, the character of securities in which it was permissible to invest the policyholders’ funds. It could logically and reasonably have gone further — and it is conceivable that such a recommendation might some day be made — and advised insurance companies to study all methods of reducing the cost of selling insurance, including advertising.
The telephone company maintains a research laboratory which is said to cost some two million dollars a year. This laboratory is to protect the vast investment of this corporation from unpleasant surprises. In a rapidly moving world, where investigation and discovery are daily altering the physical aspects of old established fields of endeavor, no great business dare relax its eternal vigilance. If insurance men were modern in their thinking and adjusted to their environment, they would long ago have developed and applied to their own business some method of keeping it abreast of the age. If insurance men as a body would devote their time whole-heartedly and sincerely to a study of advertising in relation to insurance, there would be from fifty to seventy-five million dollars spent annually in making insurance better known, and a great corresponding reduction in the cost to the insured.
Just what is the scope of the Life Insurance Sales and Research Bureau I do not know, but if it is studying this question of selling, comparing its present costs of selling with costs of selling in other industries, measuring actual results of an agent’s efforts against the time involved, exactly as manufacturers of paints, electric refrigerators, or safety razors must do, it should not be long before the antiquated methods were replaced by modern ones. Insurance companies must realize, as other great purveyors of commodities have learned, that they are not merely competing with each other but with all products for a place in the family budget, against anything for which money can be spent. The competitors of insurance are motor cars, radios, movies, trips to Europe, furniture, clothes, and food, all of which have the advantage of unremitting advertising.
Insurance has greater need of advertising than the long list of commodities that have used it. To return to our familiar example, the motor car — it is in a way its own visible advertisement. You can see it, and especially see it driven by some friend or neighbor. But insurance is invisible. It is an idea, a service. It lacks the powerful aid of the spirit of emulation. The early fire underwriters appreciated this trait in human nature, and tacked up over the doors of houses they insured metal medallions bearing the name of the insuring company. You can see these plaques on old houses still, like armorial bearings over the gates of a castle. These signs marked the house owners as progressive and modern, prompt to adopt the new protection afforded by fire insurance. There is a thought in this for insurance men to consider. Insurance might become a badge of distinction, like the red ribbon of the Legion of Honor, or the letters of an honorary degree, or the medal pinned on the breast. But to confer any distinction it must first have publicity.
Advertising has just been compared to gravitation. The comparison is apt in this, that it works whether you use it or not. It pulls down as well as holds up. The power of non-advertising, the destructive power of silence, begins to work on those commodities and services which withhold themselves from public interest. This thought was the theme of an advertisement put out by an advertising agency which attracted considerable attention from the thoughtful, and was reprinted, of their own initiative, by some six hundred newspapers and periodicals. It is commended to the attention of insurance men: —
‘We have advertised a long while,’said a manufacturer who wished to stop. ‘And have good will. That good will will last us for a long while. We don’t need to add to it right now.’
To some extent that is so. The flywheel goes on turning for a while after the power is shut off. But not for long. And when it stops it takes more power to start it, by six times, than it takes to keep it running.
One might almost as well say: —
‘We won’t buy coal now that it is so expensive; we will gradually chop up the plant and burn that in the furnace until coal is cheaper. And then we can rebuild the plant.’
But not a fine thing to use up.
Nothing is ever finished — done. Time is destructive. Stop building up and time starts tearing down. Some things last longer than others. But nothing lasts so very long. You think of your plant, for instance, as built. But it only stays built because you are painting and repairing and gradually but continually replacing it bit by bit.
Think how much more rapid the inevitable loss in a thing so intangible as familiarity — as reputation — as good will. Out of sight, out of mind — not all in a minute, but before so very long.
Advertisers who stop advertising expose the advertising structure, on which they have invested much money for many years, to elements quite as destructive and more rapid in their action than those which attack and disintegrate an unfinished, abandoned building.
In almost every community you will find the ruins of an ambitious but unfinished mansion — generally called Somebody’s Folly.
Much money went into the work and then financial reverses stopped it all. And the winds blew and the rains descended and the sun warped the wood and the dampness rotted it, and rust and decay completed its ruin.
Now, an advertising structure, dependent on familiarity and reputation, can never be finished even to the extent that a building can be finished. We venture to say that never, in your most optimistic moments, have you felt that your advertising structure was finished and that it would shelter and protect your established business forever after.
No; you realize, when you stop to think, that the work of building must go on until the end of time.
Good will is a fine thing to use.
But not a fine thing to use up.