The less than stellar results are in.

According to Counselor magazine, advertising specialties industry revenues have fallen 17.6% for the first quarter of 2009 - a net decrease of $700 million in sales compared to one year ago. Large distributors (revenues over $1 million) are feeling the greater pinch, due to larger clients experiencing budget freeze or suspension of marketing as usual for first quarter. Smaller distributors (revenues under $250,000) are more optimistic about the future and do not seem to be as affected at this time.

The promotional industry has been further rocked by filings for bankruptcy protection by leading suppliers, business closures, and production slow downs in response to lowered demand.

Falling revenues should be no surprise, considering the dynamics of the current market environment. The drop in revenues can be attributed not only to fragile economic conditions but to new regulatory issues such as adjustments to the PhRMA Code and the Consumer Product Safety Improvement Act (CPSIA).

Adjustments to the PhRMA Code and a more recent bill the Physician Payments Sunshine Act, S. 301, put those who focus on healthcare channel promotions in a quandary. This once lucrative channel of distribution has been seriously impacted by the new regulations stance on promotional products.

The CPSIA is continuing to redefine itself, the consequence of legislation too broadly written. In a statement Monday, The Consumer Product Safety Commission (CPSC) said that that the vast majority of pens are “not likely” to be considered children’s products and would not be subject to related safety requirements under the Consumer Product Safety Improvement Act (CPSIA). This would be a welcome reprieve for a product line that makes up about 9% of industry product sales. The net effect on the industry as a whole is still to be determined.

New Strategies for a New Environment

All is not lost. Companies, in order to assure their own survival, are beginning to market again. Some advertising specialty providers, including IMC, are reporting glimmers of hope as companies are re-engaging. Budgets are opening up and more normal marketing activity is beginning to occur. While things are looking better, there will not be any short-term turn around to challenging market conditions. Industry projections do not anticipate any real return to “normal” until the second half of 2010. 

In the meantime, what strategies are promotional products companies employing to navigate these turbulent times? Two strategies that I see making the biggest difference in the advertising specialties landscape are the shift to social media as a primary marketing medium and use of merger and acquisition as a tool for expansion. 

As customer purchasing habits become more conservative, the demand for new customers is growing. While customer retention is still paramount, the revenue gap must be bridged through the development of new customers. Budget limitations and a stronger emphasis on ROI favor a shift to online marketing tactics over more traditional efforts like direct mail. Particularly significant is the increased use of social media to drive customer acquisition. According to a 2009 Social Media Marketing Industry Report 88% of marketers surveyed are using social media to market their businesses, but 72% have only been doing so for a few months or less. If done well, social media (as part of an integrated marketing plan) has proven to be an incredibly cost-effective way to drive inbound lead generation.

Some advertising specialty companies are employing merger and acquisition as strategies to build business opportunities. Smaller companies, whose purchase offers market-ready solutions, are most attractive to potential buyers. These include enhanced production capabilities, line extension, and extended distribution networks. New entities will emerge as both the economy and industry continue to consolidate and evolve.

What trends are you seeing in the promotional products industry?

If we want to look on the bright side the possibility may be evidenced in the government’s demonstrated inclination for promotional communications. The development of an official logo for stimulus-based projects seems to underscore the push to promote these efforts with high visibility.

Agencies like the Social Security Administration, Border Patrol, the Environmental Protection Agency, and the state-based 2010 Census are poised to receive stimulus funding. We believe there will be potential opportunities for our industry as part of integrated marketing plans. Complex issues are best communicated to a mass audience when condensed into easy to understand slogans or icons. Most often they look to the promotional products industry as part of an integrated communications strategy. A few areas of potential opportunity are listed below.

Environmental

Communication of stimulus-funded “green” efforts will be in strong demand. When looking at options for our internal efforts, I have found advertising for anything “green” is trending up. Large scale environmental issues are firmly on the front-burner. Hot button issues include reductions in greenhouse gas emissions, reducing our carbon footprint and clean water initiatives.

Energy & Conservation

Alternative energy development has also come center-stage. Funding for home weatherization projects and green building efforts are beginning to make an appearance. Development of new energy resources like solar, wind, and bio-fuels will most certainly be on the promotional forefront.

2010 Census

The 2010 Census is just around the corner and slated to receive stimulus funding. Educating the general public about the role of the census, usage of information and outcomes is essential to encourage full public participation. Getting the public to trust in the mission of the census has been highly promoted in the past. Another potential opportunity would be identifying census workers as they participate in community outreach.

Infrastructure Projects

Infrastructure building, maintenance, public transportation projects and shovel-ready community projects will also present opportunities. Promotion on federal, state and local levels demonstrating tax dollars at work is highly likely. The stimulus bill has been likened to New Deal strategies for mass improvements to the country’s infrastructure and job creation. Historically New Deal projects, implemented by the Civilian Conservation Corps, were promoted and highly visible. It would follow that the government agencies would emulate this strategy as these programs get underway.

Healthcare

The way Americans think about and receive healthcare is another front-burner issue. The healthcare industry is looking for ways to respond to changes on a variety of levels. Increasing needs of aging boomers and their parents spur research into new technologies and clinical innovations. Boomers represent one of the largest population groups in the country. The need to develop infrastructure such as hospitals, outpatient care, long-term care and hospice facilities to handle demand will be paramount going forward. Continuing efforts to promote a healthy lifestyle for this population segment also offers opportunities for our industry.

Non-profits

On the opposite side of the coin, decreased funding due to federal, state and local budget cuts creates more demand on private sector efforts to fill the gap. Non-profits are always looking for ways to communicate their mission. Increase in competition over available charitable dollars requires non-profits to stand out even more in this challenging economy.

Once, beads were only the province of Mardi Gras and the parade circut. Not anymore! Beads have become an inexpensive promotional solution with a wide variey of applications. Check out the wide variety of promotional applications promotional beads are now used for: 

1. Branded blinking pint glass on strand promoting a specific St. Patrick’s day beverage
2. Bead strand with FDA approved branded shot glass stimulating on-premise trial
3. Bead strand with non-removable inline medallion advertising call sign for radio station - implemented like a bumper sticker “sighting” program
4. Custom bead strand tradeshow give-away for event attendees - creating roving billboards, word-of-mouth activitiy, and increased impression rate
5. Used in conjuction with Peel & Win decals as a contest “winning number” delivery method - keeps customers on-premise longer.
6. Used in conjunction with Peel & Win decals to create a medallion with a hidden “fortune” or message - branding with a sense of fun.
7. Used in conjuction with Peel & Win decals to play a social “matching” contest at an event
8. Festive beads for company event promoting new products, safety issues or mission awareness
9. Dual usage - stadium beads promote team spirit and deliver contact information for interactive mobile platforms
10. Branded beads for a messaging tool used to drive traffic to online promotional efforts

Do you have any innovative ways that you have used beads over the past year? Let us know!

The modest bag.

Simple, utilitarian and, according to results from the latest ASI Advertising Specialties Impressions study, a promotional powerhouse.

“Among wearables, bags were reported to be used most frequently with respondents indicating that they used their bags an average of nine times per month. They also deliver the most impressions: Each bag averages 1,038 impressions per month.”

The survey of 465 business people,mainly between the ages of 21 and 44, was conducted in June and July of 2008. Respondents had all received promotional products within the past 12 months. 8 out of 10 could recall the advertisers of the products they had received.

Bags were seen 30% more of the time, beating out old standbys like shirts and caps in the wearables category. Bags were held onto longer, with a whopping 42% being kept over a year. Shirts at 10% and caps at 15%, lagged well behind.

Bags were also considered 14% more useful than thier shirt and cap counterparts.

In ability to identify the advertiser, bags again led the wearables category with a 94% brand retention rate. Respondents reported having a better impression and higher likelihood of doing business with the advertiser after receiving a promotional bag item.

It’s nice to see the modest bag coming into its own. Quietly and resourcefully it has taken on the competition and emerged victorious. Innovations making them more interesting and relevant are abounding. Try one for your next promotional project.

IMC Marketer - Promotional Products - Promotional Product Consulting -  www.imcsuccess.com

History and Celebration in Mexico:  The Fifth of May commemorates the Mexican army’s unlikely defeat of French forces at the Battle of Puebla on May 5, 1862. Cinco de Mayo has limited significance nationwide in Mexico and is celebrated primarily in the state of Puebla, with some limited recognition in other parts of Mexico. Mexico not withstanding, the date is observed in the United States and other locations around the world as a celebration of Mexican heritage and pride.

Celebration in the Rest of the World: Cinco de Mayo is observed by many Americans regardless of ethnic origin. Special events and celebrations highlight Mexican culture, foods, beverages, music and regional dancing. Similar to other ethnic heritage celebrations, outward expressions of the connection abound. Banners, beads, noisemakers, you name it. Cinco de Mayo is quickly making its way up to Mardi Gras or St. Patrick’s holiday advertising specialty status.

Although it is late for ordering overseas, many vendors offer quick-turn products that allow you to capitalize on this great promotional opportunity.

 A Very Basic Tequila Primer:  Of all things associated with our southern neighbor, what is better known and less understood than one of Mexico’s most famous exports - tequila. Tequila continues to build popularity and if dedicated shelf space and variety of assortment is an indicator, Americans of all backgrounds are embracing it. Growing competition increases promotional opportunity as brand managers seek to stimulate trial.

Tequila is made either wholly or in part from the juice of the agave plant. Agave plants take 10 to 12 years to mature to the point of being harvested. A popular blending spirit is derived from sugarcane, which comes up every year, making a blended product less expensive. Whereas in single-malt whiskey, the expense is in the aging, barreling, and storage, for 100% blue agave tequila, the expense is in the plants, place and micro climate where the plants are grown.

In different tequilas the mouth-feel, aroma, taste, and color are varied. It has been suggested that like tasting fine aged whiskeys, you should never judge by the first sip. The second sip is the ticket.

Tequilas differ by hue, blend and time spent in the barrel. Premium tequilas are made from 100% blue agave juice. A “Mixto” is a blend greater than 50% un-aged blue agave spirit, with the rest made up of other spirit, most often sugarcane spirit.

The three hues of tequila are white, gold, and darker gold. Tequila can get its golden tone one of two ways – short or longer term aging in barrels or caramel coloring.

• - White (Blanco or Silver) tequila spends no time in oak barrels.
• - Reposado ( “rested”) is blanco tequila that has been rested in white oak barrels for between two months and a year.
• - Añejo are “aged” tequilas.

Now that you have, at least in part, knowledge of this happy holiday and mysterious spirit, you are prepared to discuss promotion of agave-based products and raise your own Cinco de Mayo toast!

IMC Marketer - Promotional Products - Promotional Product Consulting -  www.imcsuccess.com

The recession opens up new opportunities for direct importing of products

If you have ever thought that taking your production overseas was not possible - look again. Overseas suppliers are taking measures to ensure that they remain an attractive alternative to domestic production. In order to boost lagging sales, some manufacturers are removing obstacles or improving service in the following areas:

• - Reduced Minimum Order Quantities (MOQ)
• - Shortening lead times by stocking popular models, ready for imprint
• - Speeding up new product initiatives and release dates

Reduced MOQ
The dynamic of our highly inter-dependant global economy is moving into full gear across the supply chain. Lower MOQs mean more opportunity for moving certain production overseas. The cost efficiencies are attractive (on up to 30%+ in some cases) if your vendor has import experience and knows how to manage the process.

Go with someone who has a proven, long-term tracklist and good factory partnerships. This includes attention to communications, consistancy/quality, product testing, proper documentation and logistics.

Shorter Lead Times
With a new emphasis on speed to market, some overseas suppliers are beginning stocking programs similar to thier domestic counterparts. While this will most likely never replace a good domestic quick-turn program, it may enable you to save on longer term programs where you need cost-efficiency.

New Products
In order to capitalize on the power of difference, accelerated product releases will bring new innovations to the forefront in the battle for your business. Definitely geared toward longer lead times, but what a great reason to pick up the phone and have a conversation.

So go ahead! It may be well worth your while to revisit overseas manufacturing options and take advantage of a recession upside for a change.

IMC Marketer - Promotional Products - Overseas Sourcing - Direct Import Programs -  www.imcsuccess.com

Premiums, advertising specialties or promotional products - What ever you call them they are an integral part of daily life.

Check your desk, your closet or your morning mug. I bet there is at least one promotional product in the effluvia of your daily life. Have you ever noticed that promotional products have a weird way of becoming some of your favorite items? I never noticed this phenomenon until I started working in the world of premiums. Please note that this is not only personal conjecture - there is statistical data that proves that theory. Millions of us receive, keep and continue to use those cute little advertising specialties.

Why do we love them so much?

Is it because they are free? Heck, the beauty industry has made a fortune out of the “gift with purchase” promotional bag, tote or pouch as a way of moving product.

Is it that a useful item at hand is easier than reaching for the phone book? How many countless times have you gotten the number from your pen, scratch pad or the calendar on the wall.

Is there a coolness factor? Remember as a kid waiting for the next great item in the cereal box? You must remember Mom ordering you to finish a box of something you totally disliked because you made her buy it for the premium it contained. What else can explain the frenzy to stand in line for what may seem like hours for a complimentary gift bag or the anxiety that goes with not knowing if they will run out?

Is fondness triggered by allowing us to relive a moment? One of our Reps cheerfully announced the day after Super Bowl XLIII that he had spotted one of our Cardinals V8 inline bead products in a pre-game interview. This is a very satisfying experience for those of us who make these things. My favorite piece of this year’s Super Bowl’s promotional product memorabilia is the picture of the two lovely Steelers Fans attached. They are decked out in full IMC extreme fan regalia, which we all know has mystical qualities to improve your team’s chance of winning.

Times are tough and uncertainty is high, but some things never change. I will still get that phone number off the wall, drink tea from a logo’d mug and stand in line to get my goodie bag. Promotional products are influencing the way we purchase and winning us over every day.

For research data and statistical information regarding promotional products, link to the following trade organizations:

www.asicentral.com

www.ppai.org

www.sageworld.com

IMC Marketer - Promotional Products - Promotional Product Consulting -  www.imcsuccess.com

What do you do if you were born before the rise of the information age and have woken up to find yourself amidst a sea of blogs and tweets and acronyms that defy translation? The way we communicate has gone through yet another Kirkegardian leap and requires a bit of a mind shift for those of us used to the “old way” of keeping in touch.

Here is my short “to do” list for the over 40 crowd (or anyone really) trying to keep up with the pace of change.

The Mind Shift

Think of social media as a giant cocktail party in space. When you attend tradeshows, seminars, or simply go to the grocery store you meet and chat with perfect strangers all of the time. It might not be your natural inclination to be chatty but you can do it.

The halcyon days of privacy are virtually over. Get over the fact you do not want anyone to know anything about you. The next generation is an open environment of free association. Yes, you should put a picture of yourself out on LinkedIn or Facebook. I am thinking about using a picture of Tina Louise in the hey-day of Gilligan’s Island so that my former colleagues and classmates cannot determine my official weight gain.

Please note that you will be stalked by people you used to know looking for friends and contacts. You do have some control over who you accept in your personal network. From what I have determined, in my short tenure in space, there are two types of networkers - accept almost no one or accept anyone who asks. I am not sure if this is a “who gets the most wins” scenario or not . . .

Types of Social Media

I recently attended a social networking seminar that made me feel as if I could actually brave the social media world. It was where I finally realized I was not alone. Aside from delivering a great introduction to the medium the speaker boiled things down to six types of social media:

Social Networking - Creates communities and connections (Linked In, Facebook)

Blogs & Microblogs - Content used to drive SEO efforts (You are reading a blog! See it’s not as hard as you thought to participate, Twitter)

Social Broadcasting - Visual medium of interest used to drive SEO and promotion (UTube, Flicker)

Social News - Vote driven, SEO driver (Digg, Topix)

Social Bookmarking - Creates communities of similar interest (StumbleUpon, Delicious)

Social Pages - Create content about anything, keyword driven (Squidoo, Hubpages)

My life is now a much better place being in “the know”. Now, I write a blog, have online identity and visit all sorts of webinars and groups. I challenge you to check out some of the sites listed above. You don’t have to participate initially - but it will give you a good feel for what the experience is like. Be joyful and tweet!

The seminar I attended was called LinkedIn, Facebook, Twitter … Now What?

Hosted by Caroline Melberg at Melberg Marketing at www.melberg.com

 Going above and beyond has never been more important in the promotional products industry. The ability to offer an additional service beyond a catalog of promotional merchandise is becoming more important as the industry consolidates and budgets shrink.

Exceptional promotional products are delivered by exceptional people who can take initiative, deal with short-time frames, lean budgets and come up with viable promotional solutions. This is the difference that a “real world” promotional products vendor can make in tough economic times.

Although the specifics of this transaction and the vendor are not disclosed this is a “real world” story from inside IMC this week. A big shout out to Brad in our graphics department for making the difference!

IMC Marketer - Promotional Products - Promotional Product Consulting -  www.imcsuccess.com

We are all aware that October is Breast Cancer Awareness Month and that your support is signified by wearing a pink ribbon. We are especially aware of this in the promotional products industry.

What I was unaware of (until just recently) was that September is Childhood Cancer Awareness Month and September 13 was the nation’s first Childhood Cancer Awareness Day.

The gold ribbon is the official ribbon of children with cancer worldwide, supported, recognized and promoted by hundreds of organizations and treatment centers, families, friends, and caregivers.

If you want to know more about gold ribbons and the organizations connected to this campaign, you can find them at Gold Ribbons for Childhood Cancer Awareness on the web.

IMC Marketer - Promotional Products - Promotional Product Consulting -  www.imcsuccess.com