Helping Hippo Scale TV Advertising with Performance Guarantees

Comcast Ventures invests in Hippo

In 2017, Comcast Ventures led Hippo’s Series B financing round. Hippo is an insurance technology company that provides better, more affordable, modern home insurance enabled by smart home technology. In addition to leveraging public data to reduce the application process and to monitor homes, Hippo sends out connected internet of things (IOT) devices to proactively monitor homes for threats like fire, water leakage, and theft, thereby providing peace of mind, and advanced detection and protection.

As with many other Comcast Ventures investments, we provided resources to help the company accelerate its growth from day one. Check out the strategic partnership with
Xfinity given both companies’ mutual interests in leveraging smart home technologies. In conjunction with that partnership, Forecast Labs helped Hippo lower their customer acquisition cost by 66% through TV advertising with our new performance guaranteed program with Comcast’s Effectv, a long-standing partner.

Hippo’s challenge

Like most start-ups, Hippo launched and scaled it's business with digital marketing - with Google and Facebook at the core of their marketing mix. But over time customer acquisition costs (CAC) increased and the lack of efficiency in incremental spend called for diversification of channels that could scale. With that Hippo turned to TV, a very natural graduation path for companies that are trying to achieve scale. However, initial tests on TV did not show the results they needed. Hippo needed a strategy that would de-risk the investment in TV as a channel and open up scale for them. Forecast Labs had a unique solution.

The Solution

Hippo was extended an invitation to Forecast Labs, an invite-only program from Comcast Ventures designed to scale portfolio companies efficiently. Forecast Labs’ participants enjoy exclusive access to a suite of services across strategy, marketing, product management, analytics, and FP&A. You can learn about the rest of our services here.

Forecast Labs Differentiated TV Offering

Through our unique partnership with Comcast NBCUniversal, we have been working with Effectv, Comcast’s TV advertising arm, to help digitally-native, consumer startups reach new audiences through national TV advertising for the last 3.5 years, building up a database of best practices when it comes to TV creative, calls to action, tracking, bidding, and optimization.
Hippo was one of the first participants in our new performance guaranteed based TV advertising program. Performance guarantees help startups scale on TV through a pre-negotiated rate that allows the startup to acquire customers profitably. This also allows the startup to drive incremental paid customers to the business, not just awareness.
In addition to access to this unique program, participants also leverage these benefits because of Forecast Labs’ structure:

• Aligned Motivations - We are not a profit center--we are a cost center and as investors, our motivations are aligned with the startup’s goal of profitable conversion and scale.
  We work hand in hand to fully maximize the potential and functionality of every TV spot.

• Data Advantage – As an investor, we have the data from the startup and can help them negotiate and price their programs in a way that ensures they can successfully scale on TV.

• Cost Advantage – While we serve as the startup’s agency, we do not charge an agency fee and we don’t mark up the price of media. In this regard, our startups are able to purchase media at cost.

Executing Hippo’s Performance Guaranteed TV campaign
In July 2019, Hippo launched on our new program, covering the entire Comcast footprint. Although Hippo’s footprint doesn’t completely overlap with Comcast’s, customers outside of their footprint are referred to Hippo’s insurance partners. Another long-standing Forecast Labs partner, TVSquared, provided conversion tracking. {Anything else to add about the campaign?}

Results: Locking a target CAC that is financially beneficial to both Hippo and Effectv allows for profitable growth and scaled synergies across Effectv’s national footprint.

Since Forecast Labs was able to cap Hippo’s CAC to an amount that was less than half that of Hippo’s overall average, Hippo was able to generate profitable customers from the get go. Because they knew beforehand how much each customer would cost, Hippo was better able to allocate campaign costs and customers based on TV conversion rates. Furthermore, Effectv was able to bank incremental revenue it previously had not through this type of ad inventory.

Over time, we were able to help Hippo reduce their blended CAC by 66% while scaling up TV’s spend because of its positive impact across multiple components of the business. For example, their partner business, which referred leads outside of Hippo’s footprint to other insurance partners, grew and became a significant business for Hippo. Furthermore, at one point, the TV program was so successful that Hippo exceeded the maximum policies that they could underwrite in a certain time frame and had to pause the campaign until their quota was increased.

Going Forward: Scale Up

Given the positive results from the performance guaranteed program, Hippo will be continuing with the program and ramping it up further to achieve scale. Now that we are exiting the pilot phase for Hippo, the company can expect up to 10x the impressions as we scale up the new program.