The top three personal lines insurers are missing an important advertising opportunity on the Internet, said an investment bank.

In a recent research report, Morgan Stanley analyst William Wilt noted that Allstate, State Farm and Geico (Berkshire Hathaway) currently allocate a slim portion of their advertising budgets to the Internet.

Geico is a wholly owned subsidiary of Omaha-based Berkshire Hathaway Corp.

"In developing the Internet advertising frontier, Allstate is clearly the leader, while Berkshire's percentage of total spend seems miniscule," Mr. Wilt wrote.

Both Allstate and Berkshire allocate about two-thirds of their budgets to television, while a little less than one-third of their customers trust that medium for consumer information.

"We don't doubt for a second that marketing types are making that recommendation for a reason," he wrote. "Brand awareness comes to mind."

State Farm customers apparently have the least amount of trust in the Internet compared to their peers, so its de-emphasis on Internet advertising makes some sense.

"But what does it mean for State Farm's long-term growth prospects in a society that is becoming increasingly technology savvy?" Mr. Wilt wrote. "Will State Farm lose customers if it continues to depend upon traditional media?"

State Farm increased its 2005 ad budget by 23 percent from 2004, and its bias toward an older audience can be seen in its emphasis on network television advertising. But even that seems to be changing.

"The company seems to have acknowledged changes in consumer TV viewing habits, more than doubling its cable TV spend in 2005," Mr. Wilt wrote.

Berkshire remains tops in cable TV with that sector attracting twice the amount of advertising dollars than network TV. "Geico's formula for success has been to concentrate its ad budget on cable TV, syndicate, and spot TV and radio," Mr. Wilt wrote.

Spot television represents incremental advertising purchases that allow for better demographic targeting, he added.

Geico's total advertising expenditures increased 41 percent last year across all media. "Competitors will find it difficult to match Berkshire dollar for dollar, but we must question whether the company's across-the-board increases are an optimal use of money," he wrote.

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