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Aflac's duck commercials 'doubled its business in three years': CEO

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Despite their mundane product, insurance commercials have become one of the wackiest parts of almost any TV ad break. Phoenix Suns star Chris Paul turns into a basketball for State Farm, cave men hawk Geico, and Progressive's (PGR) long-running character Flo does absolutely nothing.

The sector's unlikely penchant for jokes owes in large part to the Aflac (AFL) duck, which made its debut more than 21 years ago and almost immediately transformed the fortunes of the company. But the ad campaign almost never happened.

Aflac CEO Dan Amos tells Yahoo Finance in a recent interview that he was "very reluctant" to go forward with the ad because it risked making light of the company's name. But the ad made Aflac a household name, exploded sales, and was soon released by the company's Japan operation to similar effect, he said.

"The advertising agency that we had was sitting on a park bench in New York City, and heard the ducks quacking, and one of them said, 'That is what we need to go for,'" Amos said. "I said that I would never do it — at that time you didn't have the Geico ads, you didn't have all of the other ads.". 

"We took a big chance making fun of our name, because you're not just doing it, you're actually making fun of your name,"he says. "And yet, it forever changed our life and doubled our business in three years in the U.S."

The duck even got the job over actor Ray Romano, then a major TV star on "Everybody Loves Raymond," who taped a test commercial with Aflac.

"It tested an 18 — 50% better than anything we had ever tested," Amos says. "The Aflac Duck tested a 27. Three, almost two and a half times better. So which one do you go with?"

While Geico's gecko may not have been on screens when Aflac designed its duck, the gecko was the first to be released into the wilderness. It made its television debut in 1999, and the Aflac duck followed soon after on Jan. 1, 2000.  

"It was Y2K and we thought we were gonna have all these problems," he adds. "So we had all these ads that we had booked on CNN, and other places to be ready for it."

"Well, then when there were no problems, [and] they didn't have anything to talk about with the news. So our commercials ran over and over and over again. And overnight, we realized that we had a hit. We actually had more hits on the internet the first week than we had the entire year before," he says.

Over the next 14 years, Aflac's brand recognition leapt from 11% to 94%, making it one of the most well-known companies in the world, Aflac says. From January 2001 to January 2014, Aflac's stock rose 85%, far-outpacing the S&P 500 (^GSPC), which rose 35% over that same period.  

Initially, the voice behind the duck was longtime comedian Gilbert Gottfried. But the company fired Gottfried in 2011, after he tweeted a series of insensitive jokes about a tsunami that struck Japan, where Aflac operates a significant portion of its business. He was replaced with Daniel McKeague, a sales manager from Minnesota.

NEW YORK, NY - JANUARY 25:  Aflac Duck attends 2018 Billboard Power 100 List at Nobu 57 on January 25, 2018 in New York City.  (Photo by John Lamparski/WireImage)
NEW YORK, NY - JANUARY 25: Aflac Duck attends 2018 Billboard Power 100 List at Nobu 57 on January 25, 2018 in New York City. (Photo by John Lamparski/WireImage)

Amos, whose father Paul Amos co-founded Aflac, began at the company in 1973 as a regional sales director. In the ensuing years, he climbed the ranks as president and then CEO. In 2001, he was also named the company's chair.

Speaking to Yahoo Finance, Amos explained how the company adapted the duck for a Japanese audience, changing the premise of the sketch and even the volume of the quack. The company also has become well known in Japan since the duck ad launched there in 2003, Amos said.

"They used a softer duck because they don't like loud noises in Japan," he says. "So we turned around and made it the Japanese style and it took off."

"Today, our name recognition is even higher in Japan than it is in the U.S.," he adds.

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