PPAI News: Distributor Sales Estimate Reveals First Decline In Seven Years


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PPAI News: Distributor Sales Estimate Reveals First Decline In Seven Years

Issue: 2009apr

Last spring, many distributors were still projecting a good sales year for 2008. But the 2008 Estimate of Distributor Sales has revealed a less optimistic reality. For the first time since 2002, distributor sales of promotional products fell to $18,101,298,808 in 2008, a 6.89 percent loss over 2007 sales. Last year’s study reported 2007 sales at $19,440,837,547, which set a new industry sales record for the third consecutive year.

The largest firms reported the greatest losses; Mike Hohenwald notes that while his firm, Oakdale, Minnesota-based distributor Spartan Promotional Products (UPIC: SPAR0001), managed to break even last year, he heard worse estimates from other large company owners.

“For a majority of distributors, 2008 wasn't the year we had hoped for, but our disappointment was shared by most other media, particularly print media,” says PPAI President and CEO Steve Slagle, CAE, adding newspaper advertising dropped by more than 17 percent and radio advertising was down by nine percent.

Other forms of media have experienced shortfalls; business and consumer magazines were both down by nearly eight percent and point-of-purchase ads were down six percent.

The notion of a decline may be disheartening to some, but put in context, 2008 sales remain the third highest on record for the industry. Only sales in 2006 and 2007 were higher, says Rick Ebel, principal of Glenrich Business Studies, who conducted the study with Richard A. Nelson, Ph.D., at the Manship School of Mass Communication at Louisiana State University.

Interestingly, notes Ebel, a separate survey revealed that 95 percent of company executives maintain a high interest in learning about new products through advertising and promotion in a downturn.

PPAI continues to help members build their businesses and share the benefits of promotional products. “We’re helping our members by giving them the tools and information they need to help their clients understand recession marketing and the importance of keeping their brands in front of customers,” says Slagle.

Watch for the June issue of PPB for the full report and more feedback from distributors.

Comments (1)

4/28/2009
Valerie Backoq (valerie.backo@proforma.com)
company: Proforma Creative Advantages
title: Owner
"It continues into 2009 and at a much stronger decline. Just waiting for everyone to determine where they're at and make a decision to allocate funds for marketing/advertising once again."

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