Promotional Products Sales Hit Record High
USA based PPAI released the results of this annual study confirming that distributor sales of promotional products in 2006 increased 4.25 percent to $18,779,654,661-setting a new sales record for the industry.
The annual study was conducted exclusively for PPAI by Richard A.Nelson, Ph.D., at the Manship School of Mass Communication at Louisiana State University and Rick Ebel, principal of Glenrich Business Studies in Corvallis, Oregon.
Sales of promotional products have increased by nearly $766 million in 2006 in keeping with growth seen by other major mass media. However, as a percentage of growth, promotional products sales growth far surpassed both newspaper and radio advertising-up only one percent each from 2005.
At nearly $18.8 billion, promotional products sales continue to outpace internet advertising ($16.8 billion), cable television ($16.9 billion), Yellow Pages advertising ($14.4 billion) and outdoor advertising ($6.8 billion).*
“This report marks the largest sales figure in the history of the industry,” said Steve Slagle, CAE, PPAI president and CEO. Promotional products continue to grow in popularity because, simply put, they work. Promotional products are the only advertising medium capable of engaging all five senses. When used as a key element in the marketing mix, promotional products effectively cut through advertising clutter to create a more positive outlook toward the ad and the brand.”
According to PPAI, promotional products include useful or decorative articles of merchandise that are used in marketing and communication programs. The items are usually imprinted with a company’s name, logo or message. Premiums, incentives, advertising specialties, business gifts, awards and commemoratives are also considered promotional products.
Click here to view sales by product category and program category. “2006 marked another year in the fast lane, and the industry’s distributors can and should pat themselves on the back,” said researcher Ebel. “Although 2006 was a year of phenomenal growth, not everyone benefited equally. While some, primarily the largest distributor organizations, experienced spectacular growth, others reported only marginal progress and some saw a decline.”
“Significantly, online sales for distributors in 2006 totaled $2,712,908,919. That’s 25.4 percent more than the previous previous year. Apparently, internet marketing is finally gathering a head of steam in the distributor population,” Ebel continued. “Certainly the internet is going to be an increasingly compelling factor in distributor sales, but I expect it to be complemented by the salesforce for consultative selling-and that trend will probably go on for next to forever.”
In addition to the increase in annual sales, the study also showed that the number of small promotional consultant (also referred to as distributor) companies-those with annual sales less than $2.5 million-increased from 20,350 to 21,000. Likewise, the number of companies with sales of $2.5 million or more increased from 947 to 965. This puts the estimated number of promotional consultant companies in the industry at 21,965.
Larger promotional consultant companies with sales of $2.5 million or more enjoyed a 7.3-percent increase over sales in 2005. The smaller companies saw an increase of 1.5 percent over the previous year.
PPAI-The Industry’s Source For Comprehensive, Objective Industry Sales Research PPAI’s annual report is the most comprehensive study of its kind in the industry and is conducted by independent researchers based on actual sales reported by promotional consultant companies. PPAI has researched and released industry sales data since 1965. Its figures are considered the most definitive and unbiased in the industry, employing time-tested research methodology and utilizing an objective outside source to conduct the research and compile the statistics.
To gather data for the PPAI annual sales volume estimate, a survey was sent to a sample of 15,500 promotional consultant companies (PPAI members and nonmembers), drawing from an estimated total number of 21,965 firms. The lists are compiled from PPAI and UPIC (Universal Promotional Identification Code) databases as well as from four other industry organizations/firms.
Promotional consultant companies were asked to report their promotional products sales for the 12-month calendar year ending December 31, 2006. Companies are divided into two groups-those with sales of $2.5 million or more and those with sales less than $2.5 million. Because some companies have such a large volume of business and an omission of their numbers could distort the overall statistics, a census was conducted of all companies doing $2.5 million or more in promotional products sales.
For smaller companies, a random sample of 12,500 firms was surveyed. Responses by mail, web, fax and phone produced 2,533 usable surveys, for a response rate of 16.34 percent-marginally lower than last year’s 16.95 percent.
Click here for charts, graphs and statistics detailing various segments of the study, along with a look at sales trend information compiled by PPAI since 1991. For more research on the effectiveness of promotional products, visit http://www.ppa.org/Member/Sales+and+Marketing+Solutions/Research/Industry+Research/Sales+Power+Tools/
Visit the PPAI website at www.ppa.org or contact PPAI at 972-258-3041
PPAI-the promotional products industry’s only international not-for-profit trade association-offers education, tradeshows, business products and services, mentoring, technology and legislative support to its more than 7,500 global members.
Promotional products are an $18.8 billion industry and include wearables, writing instruments, calendars, drinkware and many other items, usually imprinted with a company’s name, logo or message.
PPAI created and maintains the UPIC (Universal Promotional Identification Code), the industry’s only free identification system and universal company database.
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