Promotional Products Rebound in 2005

From the whimsical to the practical, there is a profitable promotion for every marketing need.

Recovering from a 12 percent drop in revenues from 2000 to 2002, the promotional products industry posted a gain of 4.5 percent in 2003 with sales of $16.34 billion, according to the PPAI. The high-water mark in 2000 saw sales of $17.85 billion, which dwindled to $16.55 billion in 2001 and shrank further to $15.63 billion in 2002.

Figures from the ASI show more modest swings, but essentially tell the same story. ASI pegged the height of industry sales at $16.5 billion in 2001, dropping 5.5 percent to $15.6 billion the next year, before swinging up 3.2 percent in 2003 to end at $16.1 billion.

Sales for 2002 and 2003 "were definitely down; and in 2004, it started to turn around," said Josh Arkin of Funco Promotions, Lynbrook, N.Y. The depressed market was mainly the result of decreased order size rather than a drop-off in total orders, he added.

"Customers who had previously ordered 5,000 of a product now only ordered 1,000," Arkin explained.

Despite the seesaw, custom-imprinted promotional products have shown tremendous growth over the past 10 years. PPAI figures pegged 1995 sales at $8.04 billion, meaning that the 2003 numbers record a doubling of sales volume in nine years.

Although 2004 sales figures aren't yet in, PPAI Board Chair Carol Aastad said, "All indications for 2004 show that it was another great year. I wouldn't be surprised if sales were over $17 billion."

Compare that to the BFL&S Top 100 Distributors' sales of $2.78 billion in 2004, an 18 percent jump from 2003's $2.35 billion. Just under one-third of that total represented forms, with another 21.5 percent coming from commercial printing sales.

Distributors are jumping on the promotional products bandwagon, though. In 2001, promotional products accounted for just 10 percent of distributors' sales, or $221 million. In 2004, the category comprised 15.2 percent of sales, or $391 million. "We've seen increased distributor interest in promotional products in the past three years," said Karen Gregg, vice president, sales and marketing, for FSI Products, Aurora, Ind. "Many distributor organizations bring on new salespeople with ad specialty backgrounds to tap into this profitable area, thus increasing promotional products sales more rapidly," she said.