Believe it or not, those pens and calendars handed out at trade shows make a lasting impression.
Of the 71% of business people who received a promotional product in the last 12 months, 34% had the item with them at the time of the survey, the Promotional Products Association International (PPAI) found. Of that group, 35% kept the item after two years, and 22% kept it after six months. Even better, 76% of the group recalled the advertiser’s name on the product they received, and 52% did business with the advertiser.
“When people have so many choices, it’s important that they have a personal connection,” says Sherri Lennarson, chair-elect of PPAI. “These brands become a part of people’s everyday lives. There’s a lot of intrinsic value.”
Sales of promotional products jumped 3.5%, to $19.4 billion, in 2007, a new record, the association says. Apparel is the top category at 30.7%, followed by writing instruments (10.3%), bags (7%), drink ware (6.3%) and desk/office/business accessories (6.1%).
Education, financial, health care, not-for-profits and construction marketers are the top buyers. Restaurants and bars emerged for the first time on the top-10 list. The average order size of the products is about $1,000, Lennarson says.
Nearly half of the respondents to Promo’s 2008 Premiums and Incentives Survey said they hand out premiums at events or on tours. And premiums appear to deliver better ROI (55%) compared to ad specialties (15%), the survey found.
Perhaps the biggest change to hit the industry this year is the green movement. For instance, imprinted mugs and reusable water bottles are replacing disposable cups and bottles.
“Choices like this allow companies to repeat important messages and tangibly show good stewardship,” Lennarson says.
Supplier Vitronic Promotional Group’s V Natural line is one example. The firm introduced the line just over a year ago and has since added new items, including reusable totes available in organic cotton fabric or recycled materials geared for grocery shopping.
“It’s one of our core focus areas,” says JoAnn Riley Beckman, Vitronic Promotional Group’s director of marketing and product development. “We are going to continue to see more products coming out.”
Gift cards are also big business on both the consumer and business fronts.
Shoppers are expected to spend nearly $100 billion this year, likely up 5% to 10% over 2007, says Dan Horne, associate professor of marketing at Providence College in Rhode Island. However, due to tough economic conditions, the types of items people buy are changing, he says.
“We see people buying socks and underwear,” Horne adds. “In the past, gift cards were spent on something special.”
Rising fuel and food costs are also giving new appeal to gas cards and grocery cards, says Rich Killian, president of RK Incentives. But the key to staying on top is innovation, he says.
“Technology is certainly going to help the category,” Killian says.
A top trend dominating employee incentives is an increase in individual awards. Rather than pick a one-size-fits-all gift, companies are offering more choice to suit individual tastes. Instead of offering a gift card that can be used at any establishment, employees want something that speaks to their interests, such as a gift card to their favorite retailer or restaurant.
“We’re all down to that basic need thing,” says Bob Dawson, chairman of the Incentive Research Foundation’s Research Committee. “It doesn’t take a lot to be really creative, but it does take time to do something individual.”
While internal incentive programs have dipped slightly, with 25% of firms running them this year, some 12% of companies plan to establish one within a year, Promo’s P&I Survey shows.
“It all comes back to one thing — a movement toward one-to-one-marketing,” adds Bruce Bolger, managing director of the Incentive Performance Center.
SNAPSHOT
Promotional product sales hit $19.4 billion
76% of people recalled an advertiser’s name on the product they received in the last 12 months
Gift card spending is expected to near $100 billion
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