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.
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:
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