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Digital Versus The Print Media: Are There Any Repercussions For Promotional Products?
By: Rick Ebel
Issue: 2007oct
How did you learn about us? All advertisers should be asking customers this question, and, of course, some do. The answer is arguably the advertiser’s best lead to which media deserves the biggest portion of the next ad budget.
Nowadays, the how-did-you-learn-about-us question is coming up with answers much different from what we’re accustomed. It is no secret that print media—some forms of it anyway—are struggling. In recent years, print newspaper advertising has been flat. On the other hand, the impressive growth of online newspaper advertising is helping publishers salve their anxiety.
No doubt about it, we are in the digital age of interactive communication. Blogs, podcasts and text messaging are some of the tools—and not just for aimless chitchat either. Serious stuff gets transmitted, too. Like when Britney Spears texted Kevin Federline her intent to divorce him.
Obviously, advertisers have concluded TIVC, as in ThisIsVeryCool. This year they’ll spend an estimated $865 million in social networks such as MySpace and Facebook. Podcast ad spending—only $80 million last year—is expected to rise to $240 million in 2008. And this year, internet ad revenues will equal or eclipse promotional products sales.
Supporting the public’s embrace of the new media is that very old medium we know as word-of-mouth advertising. Probably initiated in the Garden of Eden (Eve: Adam, you really ought to sink your teeth into this Golden Delicious—it’s to die for), word-of-mouth has become an industry. It even has its own industry association—the Word-of-Mouth Marketing Association.
Fifty-eight percent of U.S. adults rank a recommendation from friends as the most worthwhile endorsement they consider when making a purchase, according to Double Click research. The issue driving word-of-mouth is trust. Since most of us recognize conventional, paid-for advertising as being self-serving, we tend to put more trust in the advice we get from friends who have already experienced the thing we wish to purchase. Never mind that many of the raves offered by our blogosphere “friends” have been paid for by advertisers, a practice called “shilling” that is frowned upon by WOMMA
Like word-of-mouth, promotional products have been around a long time, and they constitute primarily a print medium, despite the fact that many industry suppliers now offer merchandise that digitally conveys sight and sound impressions. Therefore, if print advertising is losing ground, will the promotional products share also shrink?
In terms of uses, promotional products represent an enormous bandwidth of diverse applications, and advertising is only one of them. Distributor reps taking an order from the marketing department can amble down the hall to write another one from the human resources director who wants to communicate with or motivate employees. Today, this very large corporate internal market is also in play as companies engage in interactive channels via the intranet, video games, podcasts, RSS/web feeds and social networks such as LinkedIn. So versatile are the interactive media that the boss can even use them to deliver pink slips. Indeed, management of one British company texted 2,500 employees to tell them they were fired.
Perhaps it is time to take stock. Does the new media pose a competitive threat? We have made some assumptions about the potential impact of digital communication on the industry’s products, the programs for which they are used, and how those products and programs are sold. Do these assumptions hold water? We’ve elicited comments from a panel of promotional products executives (see The Commentators box). Among them are supplier management whose firms’ lines are, you might say, digitally avant-garde. Here’s what they have to say.
The Commentators
• Liz Hulsey, executive vice president, Zebra Marketing (UPIC: ZEBRAMC) distributor
• Marsha Londe, CEO, and Leigh Canavan, CMO, Tango Partners, consultants to the promotional products industry
• Larry Rallo, vice president of sales, Clegg Industries (UPIC: CLEGG), supplier
• Joel Schaffer, MAS, CEO, Sound Line LLC (UPIC: 1SOUNDLN), supplier
• Rob Watson, director of marketing, MediaTree (UPIC: tni), supplier
Assumption: The adoption of new media for corporate advertising and communication with employees is likely to cause buyers to divert significant portions of marketing and human resources budgets from conventional print media, including promotional products.
Rallo: I agree that there is an on-going re-directing of marketing budgets to non-traditional media. I disagree that it will impact promotional products negatively. Promotional products can still maintain or gain in its allocated portion because one of the rationales for much of this advertising dollar re-allocation is the diminishing impression levels that traditional advertising tools provide. Promotional products provide numerous impressions to a given target audience and, in fact, in many cases reach unintended audiences that positively impact advertisers’ sales dollars.
Londe and Canavan: Yes, they [advertisers] may explore digital options and opportunities but not at the expense of logoed products. Promotional products have two advantages: they are more permanent than print and radio/TV, and they can be used to direct consumers to digital mediums.
The end-user’s recipient still responds to the right incentive, and promotional products used correctly and creatively drive and reward action.
HR and marketing are different categories, and their respective directors use products for different purposes. As we’ve done in the past with new trends, our industry will develop product to complement and supplement digital-age marketing.
HR spending is expected to remain the same or to decrease minimally. Certainly, it’s easy to provide a digital download for training and then another download as a reward for participating in the training. The question is if HR wants a gift that becomes a permanent reminder of the class/event/occasion.
Using the internet for training is risky. Will employees read it? What’s the incentive? Will promotional products direct them to the information and reward them upon completion? Our industry develops premium programs so recipients can select their rewards; we may need to add digital options.
Awards and recognition programs and years of service fall under HR. Will this department decide it’s easier to present a downloadable gift card for X dollars than to create a merchandise selection online? This brings into play the ongoing question of whether or not cash is effective. But the recipient of a $250 gift card to a retailer will purchase an item at full value. A similar program through the industry involves purchasing and storage costs that decrease the dollars available for product purchase.
Hulsey: I disagree with this assumption. While buyers in large corporations may divert marketing dollars from print media, they need a vehicle to reach out and touch their employees with branded merchandise, whether it is awards or company uniform apparel.
Schaffer: Most traditional media are in a free fall, but promotional products should not be included in this grouping as our medium has never achieved perihelion. In fact, the decline of traditional media has begat “orphan” advertising dollars, and marketers are at a loss for placing these funds in effective channels for maximum ROI. Branding promotional products and their supporting programs provides a proven, yet heretofore untapped medium. There are saturation levels for internet advertising and boundaries on how far it can reach. Effective advertising reaches the target group when it is most in need of a product or service. Still, when newspapers were king, they provided a conduit for the use of promotional products as well. Scarcely was there an FSI in the Sunday paper without a coupon and premium associated with the offer. Displacement of advertising to the net does not negate the need for premiums, incentives and, more so than ever, traffic building.
Watson: Companies still look to our industry for branded premiums, but the concepts of interactivity and online traffic building are key to relating with consumers.
We’ve seen a shift in human resources recruiting from print media to digital promotions. Industries such as nursing, banking, pharmaceutical, retail, travel/hospitality and education are using digital premiums to drive traffic to a recruiting sites. Likewise, the same holds true for marketing and advertising departments. Advertisers need to get the greatest return with the smallest effect on their budgets.
Assumption: Some industry suppliers may adapt by introducing digital communication products to their lines. Example: phone cards were inspired by cell phones. Other suppliers will not be able to expand line because of the substantial investment in equipment, e.g. presses to print calendars and paper goods.
Londe and Canavan: This assumption makes sense. Products can be part of a print media or digital marketing effort, or a program/campaign can be built solely around products. Some industry suppliers can introduce digital or related products into their lines. Other suppliers, like apparel, have no worries. And even calendars, journal books and folders will maintain business, although desk calendars and day planners may ultimately lose sales to online or Blackberry-type versions. Encroaching, yes, but eliminating? Probably not.
The industry product selection has already changed. The plastic cup holders that fit into the edge of the car window have disappeared while travel mugs of all kinds and quality have taken their place. The industry is not endangered; some products are, and thus their manufacturers must change to remain viable.
Introducing digital communication products has risks, also. To download a “free” music card, for example, recipients must give up personal data, and not everyone will do this.
Schaffer: The fundamental axiom of marketing is to find a void and fill it. Our industry is a think tank of branding creativity, and we will rise to the occasion. One of our largest sales this year was a mini-CD with its primary function to direct recipients to a URL where concert tickets could be purchased. It was distributed at bars where internet advertising is not feasible. Developers are creating branding pages for real estate brokers, games for the masses and more. However, in this digital age, old-fashioned toys are even more appealing and last longer.
Watson: The age of cutting-edge creativity is upon us. We are now studying consumer online habits. What sites are most popular and highly searched? It is important for our industry to understand the needs and trends of consumers and present sustainable products that allow for optimal interactivity and consistent branding.
Assumption: Many conventional product lines will remain impervious to encroachment by the new media. Factors guaranteeing their viability might include usefulness (e.g., writing instruments have successfully co-existed with typewriters and computers) and the usefulness of programs specific to end-buyer objectives. Examples: business gifts (in terms of dollars, the largest program sold by distributors) and awards/recognition.
Rallo: I agree in general with your assumption. Writing instruments, awards, etc. are limited in making a transition to the digital world, but some tech-savvy suppliers can transfer digital technology to those product lines as well.
Londe and Canavan: We agree [with the assumption]. Digital media sources don’t put a shirt on the golfer’s or tradeshow worker’s back. Companies still need logoed uniforms, tradeshow giveaways and safety program rewards. Promotional products exist as a permanent reminder. Most desks still have at least one ruler, and tape measures won’t go away.
A key component is the creative use of an item to complement a marketing effort and create a brand image. The goal is to make recommendations that influence end-user recipients to take action and remain loyal.
Hulsey: I totally agree with this assumption that some conventional lines will always remain, regardless of the new media and/or technology out there. Pens are still here and represent a large portion of the promotional products business.
Schaffer: Until the processor from Star Trek becomes a reality and we can order a cheeseburger to appear from nowhere, real “stuff” is going to be part of our lives. Already, we see adaptivity with pens having USB storage and a stylus for Treo. Eyeglass cloths have become iKleens. Flash drives, Skype phones, earbuds and iPod cases are only indicators of future products suitable for decorating. Branding promotional products gets advertisers into users’ lifestyles, therefore, into their heads.
Assumption: The products most vulnerable to new-media encroachment are likely to be those involving communication objectives. Example: advertising messages, particularly as the new media develops personalized content; and employee communication (e.g., the company intranet supplanting promotional products bearing messages to promote safety and productivity campaigns).
Rallo: I disagree with this assumption because I believe promotional products offered by some suppliers can achieve communication objectives better than company intranets, etc. Products that feature OTP (On Time Programming), for example, deliver detailed and highly focused communications that contain advertisers’ messages to targeted audiences.
Schaffer: History and human behavior contradict this assumption. So what if a computer gives you the basics for back safety? Let it replace a meeting where a safety director coaches employees one on one. People need constant education and reinforcement to achieve objectives. Campaigns are needed to reach targets in many ways, in many places and at different times. A huge monitor in the factory that flashes digital messages will not accomplish the objective alone.
Londe and Canavan: We agree that communications programs are at risk. Digital can be less expensive and more targeted, flexible and easily changed. The flip side is that messages can be lost in the clutter and there are costs to create an interactive communication that keeps participants engaged and then monitor the results.
Logoed product can supplement and complement online communication. Even when a company utilizes its intranet to promote safety and productivity, it must create awareness, drive compliance and reward participation.
Watson: Customization is key to providing a unique personalized portal for advertising messages to reach consumers. Mass marketing doesn’t produce the results nor the return that personalized messages do. Consumers expect to be cared for, greeted and remembered.
Assumption: Since other conventional media may also be threatened by the new media, suppliers and distributors might find it beneficial to collaborate with other media with which they already have a symbiotic tie-in. Example: direct mail.
Rallo: Certainly, utilizing elements that interact such as SST—Sound, Sight and Touch—in direct mail and other promotional products creates excitement and increases the opportunity for messages and brand images to be delivered and retained by targeted recipients.
Londe and Canavan: Promotional products have always lent themselves well to working with all other media and complementing other outreach programs. Research shows direct mail campaigns improve when a product is included. But direct mail houses and fundraising organizations need us more than we need them, as with industry product, packaging and resources, we, too, can deliver direct mail campaigns that drive results.
Schaffer: True. This translates into a great future for this industry. As we segment into four levels of distribution, the heart of our industry will ultimately be in value-added distributorships. These agencies work on behalf of their clients and bring a mix of services augmenting promotional products to the table. Tech-savvy companies may offer internet services, such as developing Flash media to launch a program, yet they may also offer more analog services such as fulfillment, instant decoration, direct mail services, etc.
Assumption: Suppliers of imprinted products may find it beneficial to integrate their products with non-print communication devices or in product presentation methods. This has been done successfully in the industry. Example: embedding sound chips in greeting cards.
Londe and Canavan: Integration isn’t that complicated. Our creative industry has always responded to progress by developing new, useful, functional, desired products. Computers hurt when they first came out, but the industry introduced mouse pads, wrist rests, computer lights, cords, plugs, USB drives, CD disk cases, folders with pockets for disks, screen wipes and screen savers. Corporations realize the value of building their brands and will continue to place their logos on products that help with messaging.
Watson: Everyone in the promotional products industry must think outside the box and create new means of truly providing promotions. No longer does a viable promotion mean only handing out branded premiums at a carnival, college fair or baseball game. Rather, it means consumers must have a truly unique experience—one that allows for having digital interactivity and using premiums to drive consumers online to relate with the brand.
And now for a question: Some distributors concentrate on transactional selling (I need some pens; gimme a bid), where other focus on consultative selling. Do you think the new-media competition will have an effect on either one? And if so, how?
Londe and Canavan: No. There will always be buyers and sellers who think only in terms of products. But there are marketers and agency-minded distributors who comprehend the value of program selling. New-media competition doesn’t change these two styles. But it could positively affect consultative selling as promotional products consultants develop deeper relationships with their clients. We have an opportunity to combine digital media into campaigns while demonstrating our creativity and understanding of marketing goals.
For example, when planning a name change, a hospital system brought in marketing partnership representatives: PR, signage, product, advertising, logo and website designers. Since not every employee has a desk, much less a computer, the hospital used promotional products to drive employees to pick up the printed message. Digital communication isn’t suitable for every promotion and thus will never replace our industry.
Hulsey: By focusing on consultative selling and becoming part of your clients’ marketing team, you will have an advantage in surviving many of the changes that might come down the corporate pipeline. It is relationship building that makes the difference.
Rallo: My personal feeling, based on my past career as a client of promotional products distributors and in 15-plus years in promotional products, is that new-media competition will impact those distributors who concentrate only on transactional selling.
Moving from simple printed messages to more sophisticated digital media will result in increased efforts to be consultative. Having a consultative selling approach will bring increased value to clients because distributors will provide education and knowledge of new media and bring rationale-supported reasons for utilizing selected promotional products.
Schaffer: There will always be traditional distributors. Their numbers may be reduced, but their role and value will remain the same. In areas barren of Fortune-size companies and even middle-sized companies, traditional distributors will continue to find the industry attractive. Commodity brokers are their most significant challenge. Selling by price or delivery time, they find internet marketing cost-effective. Value-added agencies will continue exponential growth as marketing people search for answers and seek the help of agencies and their professionals. These agencies bring consultative skills and professional solutions.
One more question: What are we missing? Is there anything you think we’ve overlooked?
Rallo: Let me just touch on a new focus being pursued by companies to deliver and establish a their identifying message and brand image. “Audio Logo,” such as the AOL “You’ve Got Mail” sound, is increasingly being used to identify a company and/or its service message to its targeted consumer audience. Audio Logo is a leading-edge vehicle pursued by companies such as MNBC, Paramount, BASF and State Farm Insurance to convey a subliminal message to their target audience. There are opportunities to utilize this in the promotional products arena.
Londe and Canavan: Our industry lacks trace-ability. Did the coffee mug with phone number generate calls? We don’t know if one or multiple messages drove end-user recipients to take action.
But in the digital arena, there are tons of search engine optimization companies to provide lead generation, brand awareness and track results. Cookies are no longer delicious treats but a digital tracker.
Traditional media—billboards, prime time advertisements—are broad “push” media trying and hoping to get the preferred customers’ attention. Digital media is more defined because the target audience must visit specific sites and download or interact with advertisements. As participants drill down for exact information, advertisers can identify and respond more accurately.
Though internet advertising is not as costly and is purportedly more targeted, there is still danger in digital. Can you trust what you read? Anyone can promote whatever message desired, so credibility is a factor.
No advertising is without pitfalls and dangers. Digital media also risks becoming marketplace clutter. They have the same issues as any other media. Marketing departments have to make choices.
Moving Forward
It seems likely that similar conversations are being held among other print media. The conclusions may differ in substance but probably not in tenor. Direct mail, of course, is a print medium, and advertisers spent almost $53 billion on it last year. Stephanie Hendricks, director of public affairs of Direct Marketing Association, tells us, “We’re not seeing any evidence that mail is being harmed in any way by the emergence of interactive channels. Anecdotally, what we’re hearing from people is that they complement each other.”
How so? The catalog, she says, is still the place to present your product and brand, and you can use it to push buyers for more details and offerings online. “Because most people right now are placing their orders online after receiving a direct mail piece,” she observes.
Like direct mail, promotional products are not on the precipice, our commentators insist. And the industry probably never will be—so long as it has the capacity to adapt to circumstances. What we have been reading is a pretty basic formula for confronting potential adversity. The precepts:
• Recognize the potential threat sooner rather than later
• Co-opt its applicable features and strengths to your own advantage
• Understand that change brings opportunities and threats
• Retain—and perhaps freshen up—whatever has been working well for you
And then text-message the doomsayers LOL. As in LaughingOutLoud.
Rick Ebel, former PPAI marketing communications director, is principal of Glenrich Business Studies, a business writing and research firm in Corvallis, Oregon.
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