The Power of Promotional

Products

Promotional Products Association International

Table Of Contents

Section A: Industry Information and

Statistics

Section B: Applications of Promotional

Products

Section C: Research Studies

Section D: Conclusion
 SECTION A

INDUSTRY INFORMATION AND

STATISTICS
What are Promotional Products?

Items used to promote a product, service or company

program, including advertising specialties, premiums,
incentives, business gifts, awards, prizes,
commemoratives and other imprinted or decorated items.
How big is the Promotional Products
Industry?

.
$18,013,763,752

Source: The PPAI 2005 Sales Volume Estimate

 Growth of Industry Sales
(PPAI Sales Volume Estimates by Year)

In Billions Of Dollars

20 $17.31 $18.01
$17.85 $16.55$15.62 $16.34
18
16 $13.18 $14.94

14 $11.88

12 $9.49
10 $7.01 $8.04

8 $6.22

6
4
$5.01 $5.12 $5.23
2
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
 2005 SALES BY
Games
Stickers & Decals 1.77% PRODUCT CATEGORY
2.02% (2.12%) (2.72%) Personal (2004 Figures in parentheses)
1.58%
Electronics Food
Buttons/Badges/ (1.31%)
1.95% 1.74%
Ribbons 2.12% (1.53%)
(1.71%) (1.73%)
Clocks & Watches
2.20% (2.16%)

Automotive
2.27% (2.15%)
Computers
2.28% (1.96%)
Housewares
Wearables 29.16%
2.36% (2.30%)
(29.98%)

Magnets 2.40%
(1.84%)
Sporting Goods
2.44% (2.34%)

Textiles 2.60%
(2.60%)
Writing Instruments
Other 2.74% 10.39% (10.61%)
(3.76%)
Recognition/Awards/
Trophies/Jewelry
4.54% (4.32%)
Calendars 7.20%
(7.46%)
Desk/Office/
Business Drinkware 6.20%
Accessories 6.02% Bags 6.02% (6.25%)
(5.69%) (5.46%)

Source: 2005 PPAI Product and Program

Category Surveys
 Top Buyers of
Promotional Products
by Industry
“ 1. Education
“ 2. Financial
“ 3. Healthcare
“ 4. Not for Profit
“ 5. Construction
“ 6. Government
“ 7. Trade, Professional Associations etc.
“ 8. Real Estate
“ 9. Automotive
“ 10. Professional: Doctors, Lawyers, CPA’s etc
 SECTION B
APPLICATIONS OF
PROMOTIONAL
PRODUCTS
 Safety 2005 SALES BY
Education/Incentive
3.05% (3.39%)
PROGRAM
Marketing Research
Customer Referral
Other
1.69% (1.13%)
1.18% (1.21%) CATEGORY
3.15% (3.61%)
(2004 in parentheses)

Internal Promotions
4.31% (5.63%)

Not-For-Profit Business Gifts

Programs 18.22% (17.84%)
4.69% (4.99%)

Employee Service
Awards
5.45% (5.46%)
Trade Shows
12.18% (12.14%)
New Product/
Service Introduction
5.94% (5.78%)

New
Customer/Account Brand Awareness
Generation 9.29% (9.70%)
7.25% (6.53%)

Dealer/ Distributor
Programs
Employee
7.60% (6.91%)
Public Relations Relations & Events
7.62% (6.92%) 8.39% (8.76%)

Source: 2005 PPAI Product and Program

Category Surveys
Advantages of Using Promotional Products

“ Flexible
“ Tangible and long-lasting
“ Impact easily measured
“ Higher perceived value
“ Complements targeted marketing
“ Complements other advertising media
 SECTION C

RESEARCH STUDIES
 Promotional Products’ Impact on Brand/
Company Image
“ An experimental study Overall Image
conducted by Georgia
Southern University shows 5.5
5
that recipients of promotional 4.5
products have a significantly 4
3.5
more positive image of a 3
company than those who do 2.5
not receive promotional 2
1.5
products. 1
0.5
0
“ For the study, the Product No Product
researchers selected, as the Image Uniqueness
test company, a restaurant Perception Lunch Patronage Likelihood

located in a college town a Dinner Patronage Likelihood

few miles from a university

campus.

A 2005 Study by Georgia Southern University

 Promotional Products’ Impact on Brand/
Company Image (contd.)

Likelihood To Recommend
The Business

“ The group receiving the 3.2

promotional product was
significantly more likely to 3
recommend the business to 2.8
others than the group that
received nothing. 2.6

2.4

2.2

Product No Product
 Promotional Products’ Impact on Brand/
Company Image (contd.)

Perception Of The Business As

Reflected By Positive Comments
“ The group receiving the About The Company
promotional product had a
more positive image as 1.2
evidenced in their comments
1
about the company than the
non-recipient control group. 0.8
The difference was 0.6
statistically significant.
0.4
0.2
0

Product No Product
Promotional Product Incentives Produce Valuable
Referrals From Satisfied Customers

“ Accompanying a request for

referrals, an offer of a 0.05
0.045
promotional product incentive or 4.80% 4.80%
0.04
an offer of a promotional
0.035
product incentive and eligibility
0.03
in a sweepstakes drew as many
0.025
as 500 percent more referrals
0.02
than an appeal letter alone.
0.015 0.80%
0.01
“ Offers of promotional product 0.005 0%
incentives are likely to be 0
substantially more effective than
enclosing free promotional Appeal Letter alone
products with an appeal letter. Letter plus free promotional product
Letter + promotional product incentive for referral
Letter + promotional product incentive + sweepstakes

A 2005 Study by Louisiana State University and Glenrich Business Studies

 Effectiveness of Promotional Products at
Tradeshows

PERCENT OF COMPANIES THAT

“ 71.6% of attendees who REMEMBERED THE NAME OF
THE COMPANY
received a promotional
product remembered the 80.00% 71.6%
name of the company that 70.00%
gave them the product 60.00%

“ 76.3% of attendees had a 50.00%

Yes
favorable attitude toward the 40.00% 28.4% No
company that gave them the 30.00%

product 20.00%

10.00%

0.00%

A 2003 Study by Georgia Southern University

 Increase Booth Traffic with Promotional
Products

45%
Are Pre-show mailings with 41%
40%
Promotional Product Offerings 36%
35%
More Effective in Increasing Booth
Traffic Than Mailings Without? 30%
23%
25%
“ Including a promotional product with a 20%
pre-show mailing or an offer of a
promotional product increases the 15%
likelihood of an attendee stopping by a
tradeshow booth 10%
“ As a general rule, promotional products 5%
of greater value generate more sales
leads than products of lower value 0%
Mailer Only Mailer with Mailer with T-
Magnet shirt Offer

A 2004 study by Georgia Southern

University
 Impact, Exposure and Influence of Promotional
Products
Reach: Recall:
“ 76.1% of participants could recall the
“ 71% of business travelers name of the advertiser on the promotional
randomly surveyed at DFW product that they received in the past 12
Airport reported receiving a months
promotional product in the “ In comparison only 53.5% of
last 12 months participants could recall the name of an
advertiser they had seen in a magazine
“ 33.7% of this group had the or newspaper in the previous week.
item on their person - a
80.00%
coveted location for
70.00% 76.10%
advertising
60.00%

50.00%
53.10%
40.00%

30.00%

20.00%

10.00%

A 2004 Study by L.J Market Research 0.00%

Print Media Promotional
Products
Impact, Exposure and Influence of Promotional
Products (contd.)

Impression of the Advertiser

“ 52% of participants in the study did business with the advertiser

after receiving the promotional product.
“ Of those who had not done business with the advertiser that
gave them the product, almost half stated that they were more
likely to do business with the company that gave them the item
“ 52.1% of participants reported having a more favorable
impression of the advertiser since receiving the item.
 Impact, Exposure and Influence of Promotional
Products (contd.)

Frequency of Exposure/Lower Cost Per Impression

“ 73% of those who used the promotional product that they had received
stated that they used it at least once a week
“ 45.2% used it at least once a day

The greater the frequency of exposure, the lower the cost per Impression

Repeated Exposure

“ 55% of participants generally kept their promotional products for more

than a year.
“ 22% of participants kept the promotional product that they had received
for at least six months.
 Impact, Exposure and Influence of Promotional
Products (contd.)

Why Keep the Promotional Product

“ 75.4% of those who received a promotional product stated that they
thought the item was useful
“ 20.2% kept the promotional product because they thought it was
attractive

Pass - Along Exposure

“ Participants of the study were asked what they do with promotional
products that they do not keep. 26% of participants reported that they
give the item to someone else.
 Clients Respond to Business Gifts

A study by Wayne State University demonstrated that business

gifts not only improved sales but also customer attitudes.

Results were compared among three groups:

a) The letter Group -a group that received a
letter of thanks
b) The Silver Group - those that received a
letter plus a silver desk set (a $20 value)
c) The Gold Group - those that received a
letter plus a gold desk set (A $40 value)

A 1998 study by Wayne State University

 Clients Respond to Business Gifts

5.0
4.5
4.0
3.5 4.7

3.0 4.2
3.7
2.5 Satisfaction
3.6
2.8 Intent to Buy
2.0 3.0
1.5
1.0
0.5
0.0
Letter Letter+Silver Gift Letter + Gold Gift

1 = Very Dissatisfied/Very unlikely to buy and 7 = Very Satisfied/Very likely to

buy
 Trade Shows

To promote traffic at its booth, an exhibitor sent invitations to

4900 trade show registrants. Registrants were further broken
down into smaller groups, each of which received from zero to
three gifts(before, at, and/or after the show).

The researchers measured booth traffic, post-show memory

of having received the invitation and goodwill toward the
company.

A 1991 Study by Exhibit Surveys, Inc

 Trade Shows
Booth Visitation Rates

25%

20%
76% se
1 ea
r
15% Inc

10% 11.6%

5%
4.2%

0%
Product + Offer for Matching Invitation Only
Incentive at Show
The use of promotional products in this study
increased:

“ Booth visitation
“ Remembrance of the invitation
“ Feelings of goodwill
 Improve Direct Mail Response Rates
with Promotional Products

“ The use of promotional products in conjunction with a

sales letter can make a significant difference in direct
mail response rates.

“ The use of promotional products can also improve a

business’ effectiveness in converting leads to sales
appointments.

A 1992 study by Silver Marketing Group

Findings

15%
13%
11%
9%
7%
5% 7.3%

3%
2.7%
1% 1.8%
-1%
Sales Letter Letter & Promotional Letter plus offer of
Product Promotional Product
Incentive
* In terms of appointments secured
“ The inclusion of a Promotional Product to a mail
promotion increased the response rate by 50%

“ The use of Promotional Products as an incentive

to respond generated four times as many
responses as a sales letter alone

“The use of a Promotional Product as an incentive

to respond reduced the cost per response by two-
thirds.
 Repeat Business

New customers who receive promotional products, on average,

return sooner and more frequently, and spend more money than
new customers who receive coupons. In two separate studies,
SMU researchers tested whether promotional products would
outperform coupons in the area of repeat business and sales.
Promotional product recipients spent 27% more than coupon
recipients and 139% more than welcome letter recipients over an 8-
month period.

Promotional product recipients were also 49% more likely than

coupon recipients and 75% more likely than letter recipients to
return and patronize the business in each of the eight months
studied.

A 1994 Study by Southern Methodist University

 Total 8-Month Spending

$250

$200 $219

$150 $173

$100
$92
$50

$0
Promotional Coupon Sales Letter
Product
 Employee Awards and Incentives

In 1994 Baylor University randomly surveyed 1,500 people,

asking their opinions regarding employee awards and
incentives.

Survey recipients were asked to rate how most employees felt

about awards and incentives.

A 1994 Study by Baylor University

The survey found that:

“ Employees like awards and incentives

“ Employees are motivated to win awards
“ Employees work hard to win awards
“ Employees encourage their co-workers to work
toward awards and incentives.
 Motivating through Incentives

“ A 1999 survey by the Incentive Federation Inc., revealed that

incentive programs are both highly effective as well as cost
efficient.

“ The survey was sent to 4,000 executives in a cross section of

American Companies. Respondents were current users of
merchandise and travel items for motivation/incentive
applications.

“ The study revealed that American businesses spend $23 billion

annually on merchandise and travel for motivational use.

A 1999 Incentive Federation Study

 How Incentives are Used
90%

80%

70%

82%
60%

50% 61%
66%

40%
48%

30%

20%

10%

0%
Sales Incentives Consumer/User Non-Sales Dealer Incentives
Promotions Recognition/Motivation
 Percentage of Incentive Programs that Achieve
Established Goals

89.00%

88.00%
88.30%
87.00%

86.00%

85.00%

84.00%

83.00%
83.70%
82.00% 83.10%

81.00%

80.00%
Dealer Programs Consumer/User Programs Sales Programs
 Generate Customer Referrals Using
Promotional Products

A 1993 study by Baylor University found that customers who

receive promotional products are more willing to provide leads
than customers who don’t receive promotional products.

Twenty Mary Kay consultants participated in a study where

half of them distributed promotional gifts to customers and the
other ten offered no promotional items to their customers. Both
groups then asked customers (200 in all) to refer names of
acquaintances.

A 1993 Study by Baylor University

 Findings

50%
45%
40%
44%
35%
30% 35.8%
Gift
25%
No Gift
20%
15%
10% 13.3%
11.7%
5%
0%
Referrals Per Number of Customers
Salesperson giving Referrals
“ Customers who received a promotional product were 14%
more likely to provide leads than those who did not

“ Sales people who gave promotional gifts to their customers

received 22% more referrals than sales people who did not
use promotional products

“ 40% of the salespeople who used gifts commented on how

well the gifts were received by their customers
 Build Customer Goodwill with
Promotional Products

“ Promotional products foster customer goodwill

toward a company and its salespeople.

“ A 1992 study by Baylor University, involved a

textbook publisher sending 4000 educators either:
1) a pocket calculator plus a letter, 2) a lower priced
highlighter pen plus a letter or 3) a letter only.

A 1992 study by Baylor University

 Feelings of Goodwill
Toward Company and Sales Representative

6
Scale:
1=negative/6=positive
5

3 3.22
2.72
2
2.12

0
More Expensive Gift Less Expensive Gift Sales Letter
(Calculator) (Highlighter)
The use of promotional products in this study resulted in:

“ An increase in feelings of goodwill toward the company and its

salespeople

“ A more positive attitude among those who received the

calculator than for those who received the less expensive
highlighter pen

“ On questions relating to the customers’ personal feelings

toward the company and its sales representatives, customers
who received the calculator scored 52% higher than the letter
only group.
 Dimensional Mailings

“ The packaging of promotional products can evoke curiosity as well

as an increase in direct mail response rates. A 1993 Baylor
University study revealed that the use of dimensional mailers can
significantly improve response rates over direct mail alone.

“ For this study 3000 school administrators were divided into three
groups and received either: 1) sales letter and sales literature, 2)
sales letter, literature and a promotional product, 3) the sales letter,
sales literature and promotional product but delivered in a box with
a die-cut slot.

A 1993 Baylor University study

Dimensional Direct Mail Response Rates

5%

4%

3%
3.3%

2%
2.1%
1.9%

1%

0%
Sales Letter Letter and Promotional Letter, Promotional
Product Product & Dimensional
Packaging
 Improve Response Rates to an Advertising
Campaign With Promotional Product Mailings

In a 1996 study PPAI helped a national tile distributor integrate the use
of direct mail and promotional products into a print advertising
campaign.

One group of subscribers received only the trade ad.

Other groups received a sales letter, a promotional product, or a

promotional product incentive along with the trade ad.

1996 study by Dallas Marketing Group

 Findings

10%
9%
9.55%
8%
7%
6%
5%
4%
3% 4.20%
2%
2.30%
1%
.70%
0%
Trade Ad Ad+Letter Ad+ Stress Ball Ad + Calculator
Incentive
SECTION D

CONCLUSION
The value of Promotional Products is in their ability to carry a
message to a well-defined audience. Because the products are
useful to and appreciated by the recipients, they are retained and
used, repeating the imprinted message many times without added
cost to the advertiser.

The information contained within this presentation will provide a

greater knowledge of promotional products, the industry and its
applications.
This information has been made available to you
courtesy of Promotional Products Association
International