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The Time Is Right For Promotional Products
By: Rick Ebel and Richard Alan Nelson, Ph.D.
Issue: 2009jul
When ROI is vital, trust targeted, measurable, sticky media to be best sellers.
The plunging U.S. economy has had a profoundly negative impact on media sales, and the promotional products industry is not exempt. Most forecasts for media spending this year are not particularly cheery, but what can distributors and suppliers do about it?
The media industry, including promotional products, is plagued by shrinking advertising and promotional budgets. Most will agree that the prudent thing to do is to hang onto current customers and try to get more from someone else. Among distributors, the four-word directive we hear most is: Expand the customer base.
This dictum is not unique to promotional products. Other media are attempting to do the same through comparative advertising. This us-vs.-them tactic is designed to make the other guy look bad. You may recall the Cola Wars of the 1980s—Pepsi vs. Coke—in which the former mounted evidence to make it look good at the expense of its larger competitor. Before this, advertisers didn’t mention the other brand; they thought it was tantamount to giving the other guy free advertising.
Comparing Which Medium Is Best
Nowadays, free advertising is everywhere. Magazines gladly mention TV advertising. The television rebuttal is that net recall of TV ads is almost twice that of magazine ads. Both claims are based on a study by McPheters & Co. that was funded by Condé Nast and CBS Vision.
Magazine Publishers of America weighs in with a study showing that magazines reap the most ad value per minute compared with other major media. Meanwhile, Cable Advertising Bureau is publishing data with a headline proclaiming: “Cable Programming: High Ratings Drive Current Television Series’ Audience Growth.” Many media have marshaled considerable data in an attempt to denigrate each other and to unhorse the new-media pacesetter: internet advertising.
As researchers, we appreciate the value of statistics derived from unbiased studies based on sound methodologies and sufficient, representative sample populations. Unfortunately, there is an abundance of questionable research conducted by persons and organizations convinced that the public is gullible and won’t ask questions. This doesn’t mean that any of the aforementioned fit that description. Let’s hope not, for if there’s one mending patch enabling businesses to ride on today’s economic flat tire, it is meaningful information, accurately produced and tactically disseminated.
David Verklin, CEO of Canoe Ventures, a cable TV advertising consortium, would probably agree. “Data,” he says, “is the new creative.” It sure seems to be the kind of creativity needed to understand and address the forces at work in this unique period of marketing.
Why unique? As Joe Mandese, editor-in-chief of Media, bserves: “The real problem with the economic recession of 2009 is that it coincides with an even more fundamental shift that had already begun occurring in the economics of media. And, unfortunately, it is a shift that nobody has quite figured out yet. What we do know is that the model of largesse and inefficiency that sustained the economic boom of mass media since the period following World War II seems to be coming to an end.”
Changing The Media Model
Marketers, either subconsciously or completely attuned to the shift, are focusing on ROI in an attempt to get more from less. A senior VP of a large Midwest-based financial services firm tells us that “every aspect of our marketing operation is being reviewed—from message, to audience, to medium, to impact … I want to be able to tell the CFO and shareholders exactly what their investments in markets are achieving.”
How does he intend to do this? “Based on research, we are cutting back on broadcast and print while looking at alternative media,” he says. “Over the years, we have regularly used promotional products, and I have generally been pleased with the results. However, [promotional products] have always been add-ons in smaller efforts.”
This executive advises distributors, “If providers of specialty items want to increase their share of the marketing budget, they must think strategically and ally themselves with full-service agencies. They need to be in the discussion at the planning stages, not as an afterthought.”
Downsizing And Upsized Opportunities
Many distributors are full-service agencies whose portfolios are not limited to imprinted merchandise. Albrecht & Co. (UPIC: ALBRECHT) is one of the industry’s many marketing services agencies.
In addition to promotional products, the firm provides commercial printing and content for custom DVDs, thereby giving its salespeople access to the $20 billion multimedia market. If your client wants a sales training DVD, the Milford, Ohio-based distributor assigns a film-production company to shoot at whatever location the client wants. Albrecht also provides print collateral for the project.
Recession-related downsizing has typically created opportunities for distributors. “That’s exactly the way we go to market—as a promotional company with total solutions,” says Fred Albrecht. “We’re doing the jobs of many of our clients who no longer have people in those positions.”
Similar opportunities are being seized by The Singleton Co. (UPIC: sinco). Staff reductions have prompted clients to call on the Los Angeles distributor to handle fulfillment, coupons, sweepstakes and direct-mail campaigns. “We positioned ourselves to do that, and we’ve had clients asking us to do that,” reports Todd Singleton. “But to me, it’s just a good business practice in boom times and in bad times. A rapidly growing company still has to look outside its own existing group of people. And the beauty of us being a smaller firm is that we’re very responsive and nimble.”
For distributors, then, customers’ downsizing can mean an upsizing in the marketing pie. Media sellers competing against other media for a piece of the budget generally understand that their opponents have some strengths that they don’t possess.
Singleton says he’s constantly emphasizing the attributes of promotional products: “The usability, the touchability, just how dimensional they are … the fact that they’re so capable of addressing niche markets and inciting a response that is deeply embedded in the psyche. It’s a hard thing to measure, but nonetheless it’s ‘sticky’—to use an internet term.”
Demonstrating More
Glittering generalities only go so far, and sometimes you need to show some concrete numbers. Singleton says he’s working on a direct-response project, one he’d like to see produce a 20-percent-or-better return. Feel-good and reinforcing-the-brand attributes are fine, but he knows he needs to show measurable results when he competes for the budget.
He says, “I want to know why the marketing person is going to say, ‘You know what? I’m giving a big chunk of that budget to those guys because I like what I see in terms of results.” Targetability, we all know, is one of the strengths of promotional products. In a recent study we executed for PPAI, we found it to be the most-often-mentioned media objective for marketers launching new products.
On the other hand, precise targetability isn’t in the cards for Sandra Shilstone, president and CEO of the New Orleans Tourism Marketing Corp. She doesn’t have the budget to go after niche markets. “We just can’t afford to be ethnically or linguistically audience targeted, so we rely on broad, inclusive messaging campaigns,” she explains.
So, do we write off Shilstone and others like her? Or do we figure out something else that will enable us to gorge at her piece of budget pie?
Playing The Percentages
What was it David Verklin was saying? Oh, yes. “Data is the new creative.” If you have any doubts, consider what pricks up listeners’ ears and raises readers’ eyebrows. “Have you noticed how so many media stories include percentages of some kind or hard numbers or statistics?” asks Barbara Wayman, president of Blue Tree Media, in describing more effective PR approaches.
“Data are considered more verifiable and interesting than qualitative material. If your story fits into a larger trend, quantify that trend so you can say something like, ‘A recent survey shows 42 percent of Americans want to exercise more, and here’s how our product helps them do it,’” she says.
Albrecht adds, “No matter what you’re selling, there’s some education involved. For us, we certainly rely on industry statistics with respect to the value of promotional advertising and the value the customer is getting as opposed to other media.”
After 30 years in the industry, Albrecht still sees himself as a teacher. He believes it’s important to educate and share information with his salespeople—all industry veterans of 20 or more years and many of whom have marketing and advertising degrees. “In order to grow, you have to do ‘on-purpose marketing,’” asserts Albrecht. “Those are the tools we provide our sales reps, what we’re constantly preaching and teaching.”
On-purpose marketing, he explains, is a 30-minute daily discipline in which the sales rep chooses a task and performs it faithfully. In doing so, the rep can calculate a success or improvement rate and determine what is required to achieve the income he or she wants.
Equipping The Sales Force
Albrecht provides his reps with coaching (he’s one of three coaches), webinars, marketing tools and tech support. If the rep has a computer problem, there is an independent IT person available to deal with it so salespeople “don’t have to call the Geek Squad,” he says.
Another distributor, C.A.M., Inc. (UPIC: CAM-INC), encourages its 10 salespeople to personalize their interaction with clients. All have their own websites. “Every contact is individualized with our rep’s name, picture and contact information,” explains Mitch Gale, CAS, co-owner and VP.
The Overland, Kansas-based distributor supplies its reps with an online tool box containing a monthly newsletter with practical information, spec sampling materials, free branded items, educational white papers, environment-support tips, thank-you notes and more. The objective, says Gale, is to put some substance into the term “selling solutions.” Gale insists, “You only get to this point when you know how clients tick. We have a litany of questions developed over the years that help our sales staff do a [client] needs assessment.”
Exactly what are those needs? Top priorities for SMBs are finding new customers, managing costs and retaining current customers. Consequently, SMBs, according to surveillance by the Local Commerce Monitor of The Kelsey Group and ConStat, say the primary influences on their ad-spending decisions are, in rank order:
• Performance and return on investment
• Business partner or competitor
• Information from media such as newspaper, TV and trade publication reps
• Friends and family members
Getting On The Same Page
Another study on how to reach the nation’s 14.6 million SMBs shows that marketers and their buyer targets are not on the same page. Bredin Business Information reports that major marketers—including AT&T, US Bank, IBM and Comcast—think the way to reach SMBs is to downplay direct mail, print advertising and tradeshows and shift budgets to less expensive online media such as webinars, webcasts and social networking. SMBs, however, say that’s not the way to get their attention. For information on new products and services, they claim they rely most on the traditional media, including PR-placed newspaper and magazine articles, and direct mail (letters, postcards and catalogs).
So, what is a salesperson—well-armed with education and information tools by his or her distributor and hungry for a bigger piece of the pie—to do?
One suggestion is for promotional products sellers to focus on the core advantages of the medium. The direct-mail industry provides one example. Offering targetability like promotional products, direct mail rose to the top of the media heap in terms of sales. But direct mailers began to see targets as being anyone with a pulse, and revenues plateaued last year.
In a white paper produced by the Center for Media Research, the Winterberry Group predicted further decay for direct mail throughout the recession, and the channel “will likely return to precise targeting” instead of “saturation marketing as it has been [doing] over the last decade.”
How else can a distributor and its salespeople maintain and advance in a down economy? Singleton suggests becoming an expert in a specific area so you know more than anyone else the buyer is likely to encounter. If you’re selling to banks, for example, learn the prospect’s banking focus, attend the banking industry’s shows and conferences, read the industry’s periodicals. “You tell your story and become passionate about it,” he advises. “You can become an expert in a very narrow and specific way.”
Albrecht wonders how much the industry’s sales would really be down if you discount the business lost from just a few distressed sectors—pharmaceutical, automotive and housing. “I know 98 percent of the people will say to me, ‘You’re nuts.’ But I think we’re doing pretty darn good,” he insists.
Consequently, his advice is to turn off “constantly negative news” on TV, create an on-purpose marketing plan and affiliate with someone who can provide needed tools.
Sounds like the same kind of confidence reported by 142 Fortune 1000 CFOs surveyed by New York brand-building agency DiMassimo Goldstein. Sixty-two percent of the CFOs said their view of the economy was buoyed by the confidence they had in the job Treasury Secretary Tim Geithner was doing.
On the other hand, 15 percent of the financial officers said they recently increased their reliance on prescription drugs.
Richard Alan Nelson, Ph.D., is a professor in the Manship School of Mass Communication at Louisiana State University, Baton Rouge. Rick Ebel is principal of Glenrich Business Studies, a marketing communications and research company in Corvallis, Oregon.
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