For the full year 2008, spending on advertising specialties, or promotional products – items and incentives branded with a company logo or marketing message – was 3% greater than radio advertising*, $12.8 billion greater than outdoor display ads** and ahead of the 2.6% estimated decline in overall U.S. advertising for 2008***. The industry increase also matched the 1.1 percent growth rate for the United States GDP for the same period.

“In this time of economic challenges, the estimate for advertising specialty sales in 2008 indicates a better year than what 2009 is shaping up to be,” said Timothy M. Andrews, president and chief executive officer of ASI. “We’re cautiously optimistic for 2009, but one of the smartest things businesses can do right now is increase their marketing and advertising to grab market share.”

Reactions from industry distributors included ideas for growth and improving operations.

“You will lose business if you are not actively selling the idea that promotional products help customers get new business,” said Dan Welborne, vice president of promotional marketing for Top 40 firm WorkflowOne (asi/333647). “Companies need to align operating expense to their contribution line. For many companies in 2009, this may represent a significant decrease in operational expense.”

“Organic and green products are trending up,” said Anna Johnson, president, Super Embroidery Inc. (asi/339634). “Although many people say companies are spending less, they are still spending. Some companies are starting to buy more giveaways for their employees and customers to lighten the mood. We’re also finding customers prefer to use the Internet more and are purchasing products that have bright and cheery colors.”

“2008 started off strong for us, but turned into a challenge by the end of the year,” said Gary Tuchler, MAS, region vice president of Top 40 Distributor firm Brown & Bigelow (asi/148500). “Recent activity and order levels would indicate, however, that businesses are starting to shed some concerns and are realizing their business will go on and that a quality promotional products campaign is an investment in their future.”

Industry suppliers also voiced their opinions and advice for moving forward.

“2008 was a dynamite year for SnugZ USA and the best in our 20 year history,” said Brandon Mackay, Counselor Power 50 leader and chief executive officer of SnugZ USA (asi/88060). “With that said, lean and mean is the key to survival. We’ve found the glass-half-full approach to run and navigate our business through this economic storm and have become infinitely better at understanding our business.”

“The overall ad specialty market is relatively huge,” said Tom O’Boyle, president, Journalbooks/Timeplanner Calendars (asi/91340). “Companies with the right products, price and promotions are doing well. The trick in this economy is that all three of those cylinders must be firing. Most suppliers are focusing on only one of them, pricing, and if they were honest they would tell you that they are doing poorly.”

“In some respects, these are good times,” said Leigh Somers, owner, Say Thank You With Coffee (asi/85155). “The larger sizes of our individually personalized coffee packages, the 8-ounce and 4-ounce sizes in particular, were strong sellers in 2008. This year a year for evolution and we are working to build our brand in anticipation of 2010 and to take advantage of the economy as it improves.”

Outlook

Industry companies are optimistic about 2009, but continue to watch several factors impacting the industry:

1) Volatile economic conditions in North America.
2) Increasing demand for “green” products, despite the recession.
3) Continuing fluctuations of prices for materials used in manufacturing.

* Source: Radio Advertising Bureau. ** Source: Outdoor Advertising Association of America. *** Source: The Nielsen Company.