Commentary: Promotional Products Retain Value — in Good Times and Bad

Promotional products have proven their value in the marketplace. Have you proven their value to your customers and prospects?
June 11, 2008

By Richard Lebovitz

Last month, I wrote in this commentary that promotional consultants should not forget that all economics is local and that the state of the national economy might not represent the economy in your state or even within your locale.

Furthermore, even in a downtrodden economy, marketers still need to advertise their products and services, and there is probably no more effective and efficient way of doing so than via promotional products.

If your customers don’t believe the latter statement, then you need only point to the Promotional Products Association Intl.’s (PPAI) growing body of research that supports the use of promotional products either alone or in conjunction with other forms of advertising. For example:
   
•    71% of an audience consisting primarily of business people reported having received a promotional product during the past 12 months
•    34% of this group had the item on their person
•    76% of respondents could recall the advertiser’s name on the product they received
•    52% of respondents did business with the advertiser after receiving the promotional product
•    55% kept their promotional products for more than a year
Source: PPAI

Certainly the tangible impact of promotional products contributed in part to the 3.5% rise in promotional products sales in 2007 to a record $19.4 billion, as just reported by PPAI. Considering the downturn in the housing market, the credit crunch, the declines in employment and the escalating price of energy during the last half of 2007, this milestone was no small feat.

Moreover, in achieving this record, the promotional products industry held its own against other forms of advertising, including event marketing ($19.1 billion), cable television ($17.8 billion), Yellow Pages ($14.6 billion) and outdoor advertising ($7.2 billion). In fact, it’s right up there with Internet ad revenue, which rose to $21.2 billion last year, according to a report by the New Media Group of PricewaterhouseCoopers.

But that was then, this is now, and it wasn’t too long ago, in 2000, to be exact, that the industry hit another high, $17.8 billion, followed by two years of declining sales after the triple whammy of the dot.com bubble, the March 2001-November 2001 recession and the 9/11 terrorists attacks. It then took the industry five years to surpass its 2000 high, reaching $18 billion in 2005.

Now that we’re faced once again with what seems like wave after wave of economic woe, we should make a point of keeping our customers and prospects mindful of the value of promotional products and continue to provide creative solutions for businesses suffering from the bad economy. At the same time, we need to focus our attention on markets that are recession-resistant, such as the institutional market. The latter includes education, healthcare and government  —  three employment sectors that have continued to rise during the past 12 months, though much of the news on the May 2008 Labor Department jobs report overlooked that fact.

In addition, we need to be mindful that all economics is local and that plenty of sales opportunities exist in our own backyard if we take the time to do the necessary homework*.

To comment on this editorial or other promotional products issues, e-mail rlebovitz@impressionsmag.com.

*A place to start is with the information we've provided in this issue and prior issues of Promotional Impressions in which we've covered both healthcare and education. Another place is MCH Inc., where you can download a free White Paper titled “The Local Government Marketplace for Direct Marketers” and the company’s new “BudgetAware Bulletin,” which provides a regional look at the education market.

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