I’m sure by now that we have all seen the “turning into your parents” commercials from Progressive. These ads typically involve a young homeowner that is turning into their parents via cracking corny jokes, pointing out trivial facts and being inept with modern technology and social norms. These commercials are intended to be funny due to their relatability; after all, many of us tend to subconsciously imitate our parents as we get older. However, these commercials truly just show one thing; how woefully out of touch Progressive is.
These commercials start off with a therapist-type figure commenting on how hard it is for young homeowners who turn into their parents. Progressive must not have realized (or worse, given a shit about) the fact that this premise has become more and more far-fetched with each passing year. This is because young homeowners are becoming rarer and rarer these days.
Behind the Millennials rocking mom jeans and not knowing what slide into DM’s means, the reality is that Millennials aren’t buying homes due to the fact that interest rates are on fucking Saturn right now. The December 2023 rates are around 7.5%. Yes, you read that correctly: north of seven percent interest. That means that the interest that you’d be paying on a new mortgage would be slightly more than the historical average return of the S&P 500 after accounting for inflation. That means that taking out a mortgage at these rates essentially means that you’d be signing up to be somebody else’s really savvy investment. I’ll pass for now, and so haven’t most Millennials.
Another reason that the young homeowner trope that Progressive keeps spouting is unrelatable for large swaths of their customer base is that home prices are also sky-high right now. The median sale price of an existing home in the U.S. is nearly $400,000. For reference, the median price was $258,000 just before the pandemic. Doing some quick napkin math, assuming a 20% downpayment, that means that the aspiring homeowner needs to come up with $80,000, plus roughly $8000 for closing costs and other fees. The median savings for 25-34 year olds in the U.S. is only $5400. That wouldn’t even be enough for a 3.5% minimum downpayment on the same $400,000 house.
The fantasy that the out-of-touch marketing executive at Progressive has about large swaths of Millennials and Gen Z’s buying homes is just that; a fantasy. The brainstorm sessions for these commercials are likely all of the same people; middle-aged, high net-worth individuals who could not accurately guess how much a gallon of gas costs. As much as I hate to sound like a DE&I recruiter (eww…recruiters), this shows the importance of having a diverse pool of idea generators, as it prevents tone-deaf trash like these advertisements from coming into existence. This is why AI -generated content tends to miss the mark with a lot of audiences, biased data produces biased results.
“Well Dan, you’ve dunked on Progressive’s marketing department pretty thoroughly. Do you have any ideas for improvement, you hotshot?” Progressive’s Chief Marketing Officer disguised as one of my readers will surely ask. Fear not, underperforming executive, for I am here to solve all of your problems for you. You can start by making a product that Millennials can actually start buying, such as renter’s insurance. “But Dan, our Head of Innovation, uhh I mean they, already do that!” our dear reader will say as he adjusts his glasses. Fantastic! Then your job is simple: start fucking marketing it. How hard can it be if your competitors already do it?
Next, my misguided marketer, you can simply innovate. Given the high interest rate environment, there lies opportunity. Progressive can start by becoming a lender. Truthfully, this isn’t the first time that I’ve suggested this, though there’s no reason that Progressive shouldn’t be able to do this. However, unlike most lenders which simply borrow money from a central bank first and hence need to charge above that rate in order to profit, Progressive could just lend from their war chest, hence cutting out the need to play the arbitrage game. The advantage to this for Progressive is that they could essentially undercut nearly every other lender and still profit from this venture. Progressive would either gobble up the lending market or this would force downward pressure on interest rates; both are positives. Progressive could then automatically include their own insurance policies bundled with their mortgage products (mandated by the mortgage contract, of course!), thus selling vastly more policies than a bunch of fanny-pack-clad fictional Millennials ever could.
“Dan, that idea is far too capital intensive, and I could never get it approved by The Powers That Be” Progressive’s CMO will quip. Firstly, aspinelessexecutivesayswhat. Secondly, in lieu of that actionable idea I gave you, here’s another one; start advertising travel insurance more. Millennials love to travel, and thankfully it’s a service that you already offer. So, dear executive, time to put that supposedly-elite marketing brain to use and come up with a Millennial-themed travel insurance commercial. Seriously, it can’t be that hard; Monopoly already did it. A commercial about a Millennial (or group of Millennials) trying a trendy exotic dish at a hip café, and then booking a ticket to visit the country it came from to try the real version of it is one idea to sling travel insurance policies. Another one could be a group of young men embracing the YOLO mindset by doing some risky aspirational activity, like skydiving or Running with the Bulls, and positioning the policy as a peace of mind for all of your YOLO moments.
“Dan, the CMO of Progressive is a total knuckle-dragging half-brained fuckwit that should quit advertising, and needs you to do his job for him. Can you suggest another idea?” is something that I’ll hear from someone who’s not-at-all affiliated with Progressive’s marketing department. This is your last freebie before you’ll have to start paying me; pet insurance. Yes, yet another product that you already make yet do not advertise nearly enough. Millennials love pets, some industry experts say more so than any other generation. A childless couple coddling their furbaby should do just fine, try adding in the fact that most Millennials can’t afford to start actual families for extra impact.
I’ll take my MBA now…
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