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SPECIALREPORT
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The Company You Keep
In today's promotion marketing environment, the measure of your business is not always what you are, but what you give away
In a simpler time – as recently as 10 years ago – a company that brought its key clients together for an annual golf tournament could save money on tee gifts by going with a lower-grade golf shirt or opting for faux leather travel kits over the pricier name-brand versions.
You'd better think twice before cutting those corners today, however. In a nation of brand-conscious consumers, a company can bruise its own image by opting for a lesser name on its business gifts, employee rewards or even its marketing giveaways.
Chalk it up in part to the proliferation of these goods. U.S. businesses spent an estimated $18 billion on promotional products in 2005, according to the Promotional Products Association International, more than double the $8 billion spent just 10 years earlier.
That growth has been spurred, in large part, by end users demanding higher-quality, name-brand merchandise, says PPAI President Steve Slagle. “Buyers are getting more sophisticated and saying, ‘We can take just about anything we see at retail and use it effectively to help promote ourselves.'”
The emergence of brand names in this segment is further evidenced by their increased presence at the PPAI Expo, an annual tradeshow held in January where manufacturers meet with thousands of promotional product distributors who then push their products in the marketing programs they put together for clients. Slagle says ever since the Expo relocated to Las Vegas from Dallas (PPAI's home base) five years ago there has been an annual increase in recognizable names among its exhibitor list. Notable first-time exhibitors at this year's show included Crocs Inc., the maker of the wildly popular plastic clogs that surged to popularity last summer.
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Giveaways, Not Throwaways
Increased brand consciousness also coincides with a blurring of the lines between traditional marketing giveaways and more expensive business gifts. Companies are reluctant to spend thousands of dollars on imprinted gewgaws if they are unlikely to make it back to recipients' homes. Many are instead opting to spend a few dollars more per item and/or decrease the number handed out in order to secure a brand-name product that has a higher perceived value.
To be sure, banks, insurance companies and other businesses continue to buy loads of imprinted trinkets that cost a few bucks apiece or less. But a line of demarcation that once separated advertising
specialty items from more “grown-up” business gifts no longer exists.
Promotional product distributors are selling name-brand merchandise into an assortment of programs, says Joe Zanone, Senior Vice President of Sales for Movado Group's Special Markets Division. Distributors have learned how to design programs using these higher-priced items that make sense for the customer.
A major athletic footwear manufacturer, for example, gave representatives at key retail accounts a Tumi leather business attaché as part of a marketing campaign rather than settle for a lesser brand. In fact, the company chose to not put its own logo on the attaché in order to enhance its usability. “To their credit, promotional products distributors have become a lot more involved in their customers' businesses,” says Mike Landry, National Sales Manager for Tumi Special Markets. “They are true consultants, and they're being asked about access to brands more often.”
It's not so much that companies are using promotional products differently (see “Top Ten Uses” sidebar), that has brought about the increased presence of brand-name products, but that they are more willing to invest more in these campaigns, says Slagle. “We'd like to think there has been a shift of expenditures from other promotional or marketing areas to promotional products.”
PPAI statistics indicate that the $18 billion spent on promotional products in 2005 was more than businesses spent on more traditional promotion like point-of-purchase advertising, cable television, Yellow Pages, Internet advertising, sponsorships and sampling.
The shift to higher-priced, brand-name items has been accompanied by a burial of sorts for the term “advertising specialty.” Slagle says the relatively new tag of “promotional products” is more
suitable given the diverse programs they are used in. “Specialty advertising is now one of the pieces listed under the larger promotional products banner along with commemoratives, awards and
recognition, business gifts and premiums. It's been a successful turn for the industry.”
See also: Case Study: A Brand Name That's Also In the Game
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