Social media outlets are a new marketing channel that insurers need to take advantage of, even though marketers are struggling to find out how best to leverage the new services in their favor, according to Mintel Corporation.

Daniel Hayes, vice president of insurance services at Mintel—a provider of market intelligence—said during a webinar yesterday that there are so many social media sites that are popping up so quickly, even the people who start them have trouble understanding how they will ultimately be used.

Companies hold back on establishing a presence on these sites, Mr. Hayes said, because “the benefit of using social media is not clear.” The social media environment, he said, is constantly changing. He also advised that the sheer amount of social networking sites could make it difficult to determine where to establish a presence.

But Mr. Hayes noted that there are some recognized social media leaders, such as Facebook, MySpace, YouTube, LinkedIn and Twitter.

He said if he had to pick one social media channel to start with, it would be Facebook, since that one is the largest and provides the most opportunity to get to a larger audience.

Mr. Hayes counseled that companies should not be afraid of making the largest channel their first choice. Companies that get on board now, he said, will be part of the development—learning along with everyone else, rather than falling behind now and catching up later.

Mr. Hayes said companies need to get started on social media, because it is already moving on without them.

He showed an example where one “well-respected company” received negative comments on a social media site about ignoring requests for assistance. “They’re talking about you,” Mr. Hayes said. “They’re talking without you.”

He explained that responding to criticisms on social media can be tricky, but can be handled successfully.

Mr. Hayes described one company that was heavily criticized on Twitter. An agent for that company responded and asked what the issue was and worked it out quickly with the person who initiated the post. That person then became a proponent of the company, he related.

“That’s the goal,” Mr. Hayes said, stating that a company will always have to deal with complaints, but if they can make good quickly, the people lodging the complaints can become a company’s best advocate.

Speaking to insurers’ growing presence in social media, Mr. Hayes used Apple’s iPhone as an example, noting that at the beginning of 2009, two auto insurers had developed iPhone applications (commonly called apps). By the end of the year, seven of the 10 largest auto insurers had developed apps.

GEICO’s app, Mr. Hayes said, got a lot of attention because of a television commercial tying the app in with its popular caveman advertising campaign.

Ultimately, Mr. Hayes said insurers should work to integrate all marketing channels to provide consumers with easily accessible information. Direct mail, he noted, is still the best way to put insurance offers in front of unfamiliar clients. But he said direct mail can also be used to drive interest in social media channels.

Mr. Hayes encouraged companies to get connected and develop more apps—and to “develop fun” along the way. He said games can be developed and offered through social networks. The games do not even have to deal with insurance, he said, comparing it to companies that associate themselves with sporting events to promote their brand.

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