The Promotional Marketing Association is celebrating its 100th year. To mark the occasion, Promo talked with PMA president Bonnie Carlson, just before the trade group’s big annual meeting in Chicago this April 5-7 to find out how much about promotion has changed, and how much is still on marketers’ to-do lists.
PROMO: So what was promotion like in 1911, and how did that lead to the formation of the PMA?
CARLSON: Researching this history has been a real learning experience. For example, promotion was very single-purpose in those days: generally involving a premium, a sample or a coupon as the main currency. The integration of multiple media and the whole complexity that we’re faced with today couldn’t even have been dreamt of in 1911.
PROMO: Do you find any difference in the way premiums were used?
CARLSON: While premiums have been around since the early 1800s, they really got a boost during the Civil War. At first, they were largely unrelated to the item they were promoting—the soap, or tobacco or whatever. The premiums were often practical or whimsical; women’s opera gloves, men’s pipes or kids’ button shoes. Then around the turn of the century, brands like Coca-Cola and Anheuser-Busch began offering premiums that were also adverting vehicles.
The market for premiums really grew explosively. By 1909, U.S. marketers were spending $60 million on premiums annually—the equivalent of $1.4 billion today. And by 1915, that spending had grown to $125 million, or $2.5 billion in 2011 dollars.
The other thing that happened at this time was the invention of trading stamps that consumers could redeem for premiums. [With the growth of both premiums and trading stamps], retailers began to feel that premiums were escalating their cost of doing business, and they worked in various states to get anti-trading stamp laws passed—and they succeeded. But as written, the laws were so broad that they cut into marketers’ ability to offer premiums.
PROMO: And that was the impetus behind the founding of the PMA?
CARLSON: Yes. It started with leaders from about 20 brands, including many that are still known today, such as Lever Brothers and Colgate. And within about 10 years we had almost every major brand name in the business at that time, including Nestlé Milk Products, The Borden Co., Procter & Gamble, My-T Fine Corp. and the Eskimo Pie Corp. among our members.
PMA got founded for three purposes. First was to work with state and federal lawmakers to broaden the ability to offer premiums and change the laws. The PMA spent its first couple of decades trying to do that. Second, the aim was to establish standards and best practices and to develop a code of ethics for promotions. There were some not-so-reputable companies around overstating the value of their premiums. So these good companies were interested in creating a code of ethics that everyone in the promotions industry had to subscribe to. This was before the formation of the Federal Trade Commission in 1914, so the PMA was an attempt at self-regulation.
The third reason for founding the group was education—to teach both lawmakers and marketers about the right thing to do, and to elevate it to a legitimate form of marketing.
PROMO: Do you envy the singular focus that promotional marketers faced in those days?
CARLSON: Not at all. I’m sure it was exciting for them in 1911 because they were breaking new ground. But it’s so much more exciting today, more complex and more sophisticated.
PROMMO: So what promotional tactics and elements endure?
CARLSON: Some of the things done in those early days are still around, because they’re evergreen. For example, the Macy’s Thanksgiving Day Parade was founded in 1924 by employees who wanted to celebrate the holiday. An early example of experiential branding. Also in the 1920s, Procter & Gamble started a soap-carving contest that by the ‘30s drew enough entries to be displayed at Rockefeller Center in New York.
PROMO: Sort of a forerunner to user-generated content.
CARLSON: Exactly. They got lots of kids to start carving soap. They had 20,000 spectators for the soap display in 1934, and they ran the contest annually until 1961. The only interruption was during World War II, when soap was rationed.
PROMO: With so many evergreen tactics, what has changed most about promotional marketing?
CARLSON: The consumer. The consumer is now much more in control of the conversation, thanks to user-generated content and social media. The big factor becomes keeping them from tuning out your campaign—cutting through the clutter. The very best campaigns still aim to do that.
Bonnie Carlson has served as president of the Promotional Marketing Association since March 2007. The group will hold its annual Integrated Marketing Conference in Chicago April 4-7.
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