Last month we posted an interview on our Web page with Progressive’s  Karen Barone, national distribution leader for agency business, which proved to be 0ne of our most popular features.

Not surprisingly, part of the article’s interest — or more accurately, controversy — involves Progressive’s promotion of direct purchase along with sales through its agency force. 

Many of our readers pointed to Progressive’s heavy TV advertising — currently featuring the wacky saleswoman character, “Flo” — as testimony to its commitmemt to direct sales and cutting out the middleman. Surprisingly, in spite of the prevalence of Progressive advertising promoting direct sales,  Barone noted that about 65 percent of Progressive’s sales actually come through its more than 30,000 independent agencies.

Now, in recognition of that fact, Progressive is unveiling on Oct. 19 a new Flo commercial, featuring — you got it — an independent agent. (Well, actually, he’s an actor playing an independent agent, kind of like actress Angelina Jolie will play me in “The Laura Toops Story,” but you get the idea.) And, taking a tip from other industry branding programs (remember the Big I and Raymond Burr?), Progressive agents can even access a version of the commercial they can customize with their agency’s branding to run locally.

The thinking behind this move seems pretty sound — an attempt to promote the insurer’s already prevalent independent agency sales. But the end of the commercial — a voiceover that states, “Prices vary based on how you buy” — sums up the controversy. Because, of course, consumers who buy directly through Progressive will pay less than those who go through an agent.

Do you think Progressive’s new campaign will increase agency sales?

One of my favorite TV shows is AMC’s Mad Men, that paeon to the advertising industry of the early 1960s, when (mostly) men smoked and drank and came up with concepts to brand businesses and sell products. Last season, several episodes revolved around Sterling Cooper’s launch of a television department. At first, they’re not sure what to do with it. The department head is overworked, underpaid and disrespected. When he can’t keep up the pace, agency brass tries to fob off script reviews to the curvaceous office manager. And top dog Don Draper sometimes has a tough sell persuading clients of the importance of adding television to their media mix. Sterling Cooper even makes a point of hiring a couple of young guys to keep up with the new cool medium.

This sounds familiar, if you replace “television department” with “social media.”

Throw away everything you know about customer outreach, time management and building a brand. Over the past year, social media (SM) has changed the landscape of all these areas of property-casualty insurance agency operation, from how you manage your employees to staying in touch with your customers.

And the dust hasn’t settled yet. Even the experts are unsure about how social media will shake out in the business world. One thing is certain, however: Ignoring it is not an option.

That much was evident at the first Aartrijk Brand Camp, held this week at the snazzy Hotel Sax in downtown Chicago. The day-and-a-half meeting, attended by a cross-section of agents, carriers and media types, is the premier event hosted by insurance branding guru Peter van Aartrijk (who I knew long before his guru days). Speakers and subjects ranged from the macro view (Brad Keown of Facebook) to the practical (Marcia Hansen of Allstate), and everything in between.

Some of the findings were startling.

• 29% of consumer consumption is digital, and that number is growing
• Facebook has 90 million U.S. users, and plenty of your customers are there
• When it comes to sheer number of users, “Social media is the new porn,” according to Daniel Honigman, digital communicatio9ns supervisor at Weber Shandwick
• 91% of B-to-B decisionmakers participate in social media, 69% for business purposes
• 70 million retiring baby boomers around the globe are being replaced with only 15 million Gen Xers, with 55 million Gen Yers waiting in the wings, according to Deloitte.

This adds up to nothing less than a quantum shift in how we do business. Statistically, the future face of business will be increasingly female, Hispanic, and very comfortable with all forms of Web 2.o technology. This is the demographic we need to attract and understand, both as employees and customers. Much of our communication with them boils down to authenticity, transparency and trust — words not typically associated with insurance.

Take employees, for example. Because much of social media blur the lines between the personal and professional, your employees can be your company’s goodwill ambassadors everywhere in the virtual world. The Brand Camp speakers agreed that instead of building firewalls between your employees and this online world, you should be training them on its use. The thinking is that they’re going to be popping onto Facebook and YouTube on company time, anyway; you might as well make sure they’re doing it right when it comes to representing your business.  Bottom line: If you hired them, you should be able to trust them to do right by you — radical thinking from what most of us are used to!

Social medial also mean instant and constant accessibility.  Not too long ago, I would have “covered” this event by writing up the proceedings for publication in a magazine, which readers would get more than a month later. Reporters covering the Brand Camp tweeted their comments for instant delivery throughout the event, updated their Facebook or LinkedIn pages, or blogged about it, with plenty of room for others to comment (feeedback is a key element of social media).

This doesn’t mean the “old” communication methods are dead. Press releases are alive and well as a way to stay on a publication’s radar, and in spite of the growth of “unofficial” sites, there is still plenty of cachet in being written about in a recognized publication (whew! Good news for us formerly ink-stained wretches!). But social media needs to be part of your branding arsenal, and like any other branding effort, must be thoughtfully integrated into the mix.

What is your agency doing with social media to promote your business?

Sam Friedman recently generated a lot of controversy in NUP and on his blog (http://nusamsoapbox.com/2009/05/27/time-for-some-tough-love-on-industrys-image/) about the insurance industry’s traditionally lousy image and what can be done about it (even Bob Hunter weighed in — I’m jealous!).

On the same topic, I’d like to comment on the recent State Farm ads (http://www.youtube.com/watch?v=9PMwTwY7SUs) now airing on TV. I almost never watch commercials since the advent of TiVo, but the latest one grabbed me and didn’t let go.

To the strains of the Jackson Five classic “I’ll Be There,” the 90-second spot shows real (albeit staged) images of what insurance is all about: hurricane victims crying in front of home wreckage, women on a breast cancer walk, a female soldier returning home to her young son, a Habitat for Humanity group raising a house, old folks caring for one another. It ends with the simple words on the screen, “Nothing’s more important than being there.”

Apparently I’m not alone: read some of the comments under the YouTube clip to see that along with the usual cynicism, many people were actually moved by this piece of advertising.

I know the insurance industry’s image revolves around a lot more than paid advertising — and that direct writers are the the Great Satan — but this ad campaign speaks to what insurance is really about, underplaying the price issue and playing up the importance of a real, live agent who’s on the scene when you need them.

I’ve always maintained that catastrophes are the true proving ground for agents to not only justify their existence, but to establish some bragging rights about the important work they do for their customers.

Hurricane season is coming up. Image enhancement, anyone?