Spending On Nontraditional Advertising Jumps
May 13, 2008
A study released in April 2008 by research firm PQ Media, titled Alternative Media Forecast: 2008-2012, reports that marketing spending on online, digital and other forms of out-of-the-box advertising topped $73.43 billion in 2007, an increase of 22% compared to 2006. Furthermore, the trend is only expected to continue, with spending on nontraditional media eventually comprising 26.6% of all U.S. advertising and marketing dollars by 2012, the firm concludes. While this study covered a wide variety of media, the promotional products segment experienced an increase of 5.4% in 2007 over the previous year, totaling $19.6 billion.
The trend confirms what we've known at APTCO for a long time, that many indicators show promotional products will increasingly be used for such promotional efforts as brand marketing, sales conferences and incentive packages. We are seeing a shift, essentially an increase in spending from media buyers and agencies. The study shows that these buyers who were making significant purchasing decisions with traditional forms of advertising — TV, radio and print publications — are pouring dollars into web, video and mobile advertising, and they are using promotional products to drive viewers to their sites.
The current state of the economy is likely a contributing factor for the increase. Companies are especially focused on Return on Investment (ROI), and well-crafted campaigns including promotional products can provide much higher ROI than TV, radio, and print ads. This is largely because of the staying power of physical advertising — products remain in view for a long time, reinforcing the brand name and message of the advertiser.
Incentive Federation agrees
In a recent Incentive Federation survey, 77% of companies with sales of more than $100 million indicated they view incentive merchandise as an investment rather than a cost. That's a strong testament to its effectiveness. At a roundtable discussion held in March at the annual meeting, other results were revealed:
- While the use of dealer incentives is on the decline, the study revealed that consumer and employee incentive programs (especially for non-sales employees) are on the rise.
- More young people are shying away from traditional advertising mediums — but are embracing promotional products, particularly when they're integrated with other advertising mediums, such as online advertising.
- A group of college students interning at ad agencies were asked their views on traditional advertising vs. promotional products. They couldn't recall any traditional advertising they had seen, but they not only recalled a recent promotional product they'd received — they had a meaningful story attached to it. That says a lot about the power of promotional products.
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