ppai 2014 buyer study report final

Buyer Insights: Ad Agencies & AdvertisersA study of their buying habits, preferences & level of satisfaction with promotional products

Prepared by

April 2014

Methodology

Data Collection� 15-minute online survey

Sample� 400 respondents including 178 Agencies and 222 Advertisers� Sample source: Third-party online panel Research Now and Redbook database

� Sample source: Third-party online panel Research Now and Redbook database� Sample Screening Criteria

– Decision maker or influencer in the purchase of promotional products– Advertisers: Revenues of $10 million or more

Field Date� March 5 – 28, 2014

Key Findings

Buying Process

� 8 in 10 Agencies and Advertisers buy promotional products from promotional consultants, which are considered part of the team by 41% across both groups

� Agencies are more likely to consider their promotional products provider as part of their team (61%), suggesting that promotional products consultants would benefit from

team (61%), suggesting that promotional products consultants would benefit from approaching agencies to establish partnerships

� Price, design/function and preferences were the top drivers in the use of promotional products for Agencies and Advertisers

� Apparel was the category of promotional products most often purchased in the last 12 months by both Agencies and Advertisers

Key Findings

Promotional Products Effectiveness

� Promotional products are often integrated into the advertisers budget (52%) and the campaign budgets agencies manage for their clients (54%)

� However, Advertisers (41%) are more likely than Agencies (28%) to buy promotional products as needed, without having a designated budget for it

� About 1 in 4 Agencies recommend promotional products to be included in the media buy for their clients’ advertising and marketing campaigns

� Agencies are also more likely to actually include promotional products in the media buy they do for clients (19%) and invest in this advertising medium (17%) than Advertisers (9%, respectively)

� In the past 12 months, 9 in 10 Agencies and Advertisers have purchased promotional products at least once, with 4 in 10 spending $25,000 or more in this medium

Key Findings

Investment in Promotional Products

� Across Agencies and Advertisers, 7 in 10 consider promotional products effective or highly effective

� Promotional products are often used to promote brand recognition (62%), brand and product awareness (58%), and to support corporate identity (52%)

� The use of promotional products have often resulted in increased goodwill (56%) and brand recall (44%), but less so in on customer acquisition (31%), increased market share (22%) and overall ROI (16%)

� Apparel is considered one of the most effective promotional products categories by both Agencies and Advertisers

� The majority of Agencies and Advertisers would recommend using promotional products (88%) and many believe they have contributed to the campaigns’ success (73%)

� However, only a third have measured the response to the campaigns or included some form of tracking mechanism

Key Findings

Promotional Products & Media

� Overall, 7 in 10 have used promotional products in stand alone campaigns, and 6 in 10 have used them in conjunction with other media

� Promotional products were often used in exhibits/trade shows (33%), followed by print (22%) and social media (22%)

� They are less often used in combination with mass media such as Radio (6%), Outdoor (5%) and TV (4%)

� Most Agencies (91%) and Advertisers (96%) customized or imprinted the products included in campaigns using promotional products in their last campaign

� Half of promotional products were mailed to specific vertical markets in their last campaign

Buying Process

How Promotional Products Are Purchased

� About 8 in 10 Agencies and Advertisers purchase promotional products from a promotional products consultant

Total(n=267)

Agency(n=110)

Advertiser(n=157)

80%Promotional Consultant 79% 80%

A4/B3. How does your company purchase promotional products [on behalf of your clients]?

10%

7%

3%

Consultant

Online

Retail or catalog

Third party

10%

7%

4%

10%

8%

2%

Promotional Products Consultant Considered Part of the Team

� Agencies are more likely to include promotional products consultants as part of the team

A4a/B3a. Do you consider the promotional products consultant a member [of the team working on behalf of your client/of your marketing team]?

Total(n=212)

Agency(n=86)

Advertiser(n=126)

80% 75%

Importance in Decision to UsePromotional Products (Top 2 Box)

Total(n=241)

Agency(n=95)

Advertiser(n=146)

77%Price

� Price, design/function and preferences are the top drivers in the use of promotional products for Agencies and Advertisers

80%

72%

71%

67%

65%

60%

61%

53%

34%

45%

75%

81%

82%

67%

66%

64%

60%

67%

33%

22%

A15/B14. Thinking of the last time in the past 12 months [a client’s campaign/when your company purchased] promotional products, how important were each of the following factors in the decision to use promotional products?

77%

77%

77%

67%

66%

62%

61%

61%

33%

31%

Price

Design/function

Proven favorite of recipients

New idea

"Gift" perception of items used

Info about message longevity retention

Logistics

Uniquely positioned as ad medium not considered a nuisance

Recommendation from another person

Suggestion from vendor

Promotional Products Purchased in Past 12 Months

� Apparel was the category of promotional products most often purchased in the last 12 months by both Agencies and

Agency

Agencies and Advertisers

A9/B9. List three promotional products purchased in the last 12 months [on behalf of your clients/at your company]?

Advertiser

Investment in

Investment inPromotional Products

Promotional Products Budget

� Promotional products are often part of the advertisers budget, which is also reflected in the campaign budgets agencies manage for their clients

� However, Advertisers are more likely than Agencies to buy promotional products as needed, without having a specified budget for promotional products

Agency(n=126)

Advertiser(n=160)

52%Usually a formal

part of the 54%Formal part of

Mktg or PR

A3/B2. Which of the following best describes how the budget for promotional products is [integrated in your clients’ advertising and marketing campaigns/set up at your company]?

52%

28%

18%

part of the campaigns

No budget, buy as needed

Clients handle it most of the time

54%

41%

3%

Mktg or PR budget

No budget, buy as needed

Part of the ad agency budget

Promotional Products Inclusion inMedia Buy/Advertising Investment

� Agencies are more likely to include promotional products in the media buy they do for clients and invest in this advertising medium

� About 1 in 4 Agencies recommend promotional products to be included in the media buy for their clients’ advertising and marketing campaigns

Total(n=255)

Agency(n=113)

Advertiser(n=142)

A3a. On average, what percent of the time are promotional products featured in your agency’s recommendations for your clients’ advertising and marketing campaigns?A3b/B2a. On average, what percent of the time are promotional products included in [the media buy for your clients’ advertising and marketing campaigns/your company’s media buy]?A3c/B2b. On average, what percent of the investment in [your clients’ advertising and marketing campaigns/advertising] do promotional products represent?

26% Recommend promo products to clients

Promotional Products Purchase Frequency:Past 12 Months

� 96% have purchased promotional products in the past 12 months� 75% have done so 3 or more times during the same period

Total(n=263)

Agency(n=107)

Advertiser(n=156)

A7/B7. How often has your company purchased promotional products, giveaways or incentives [on behalf of your clients] in the past 12 months?

4%4% 5%5% 3%3%5%5% 3%3% 6%6%

16%16% 17%17% 15%15%

22%22% 19%19% 24%24%

15%15%14%14%

17%17%

38%38% 42%42%35%35% 5+ times

4 times

3 times

2 times

1 time

None

Promotional Products Spending:Past 12 Months

Total(n=253)

Agency(n=102)

Advertiser(n=151)

� 4 in 10 spent $25,000 or more on promotional products in the last 12 months

A8/B8. On average, how much did [you/your company] spend on promotional products [on behalf of your clients/for internal use at your company or department or for an external marketing/advertising campaign] in the last 12 months?

14%14% 11%11% 17%17%

23%23%21%21%

26%26%

22%22%24%24%

21%21%

13%13% 14%14%13%13%

28%28% 30%30%23%23%

$50K or more

$25K < $50K

$10K < $25K

$5K < $10K

Under $5K

Promotional Products

Promotional ProductsEffectiveness

Promotional Products Effectiveness

� 7 in 10 consider promotional products effective or highly effective

Total(n=264)

Agency(n=108)

Advertiser(n=156)

11%11% 10%10% 12%12%

A6/B6. Overall, how effective do you find the use of promotional products?

1%1% 1%1% 2%2%1%1% 1%1%

24%24% 23%23% 24%24%

63%63% 66%66% 61%61%

11%11% 10%10% 12%12%

Extremely effective

Effective

Somewhat ineffective

Extremely ineffective

Don't know

Promotional Products Purpose

� Promotional products are often used to promote brand awareness and support corporate identity

Total(n=265)

Agency(n=109)

Advertiser(n=156)

62%Brand recognition

Brand/product

62% 62%

A5/B4. Which of the following best describes how promotional products have been used [in your clients’ campaigns/at your company]?

58%

55%

51%

42%

41%

40%

38%

33%

29%

25%

16%

Brand/product awareness

Corporate identity

Public relations and goodwill

Customer retention & appreciation

Generate sales & referrals

Employee communications & recognition

New product introduction

Motivate behaviors & incentive programs

New customer acquisition

Drive traffic

Call to action

54%

48%

45%

38%

39%

30%

39%

31%

31%

28%

22%

60%

60%

56%

46%

43%

46%

38%

35%

28%

24%

12%

56%Increased goodwill 59%

Total(n=251)

Agency(n=95)

Results of Promotional Products Usage

� The use of promotional products have often resulted in increased goodwill and brand recall� However, a direct impact on customer acquisition, market share and overall ROI in less

frequent

54%

Advertiser(n=156)

44%

31%

23%

22%

22%

16%

4%

Increased brand recall

Customer acquisition

Increased response rate

Increased website traffic/conversions

Increased market share

Increased overall ROI

Increased fundraising

43%

35%

23%

30%

25%

23%

4%

A12. Thinking of the last time in the past 12 months a client’s campaign included promotional products, did the use of promotional products result in any of the following?B5. Has the use of promotional products at your company resulted in any of the following?

44%

28%

22%

18%

19%

12%

5%

Promotional Products Campaign Usage Diagnostics

� The majority of Agencies and Advertisers would recommend using promotional products and many believe they contributed to the campaigns’ success

� However, only a third measured the response to the campaigns or included some form of tracking mechanism

Total(n=242)

Agency(n=95)

Advertiser(n=147)

87%

78%

37%

38%

A11/B11. Thinking of the last time in the past 12 months [a client’s campaign/your company did a marketing/advertising campaign that] included promotional products, please answer the following questions.

88%

73%

35%

33%

Would recommend as part of future campaigns

Contributed to success of advertising/branding

campaign

Products included tracking mechanism,

website, phone number or QR code

Response was measured

89%

70%

34%

31%

Most Effective Promotional Products Used in Past 12 Months

� Apparel is considered one of the most effective promotional products categories

Agency

A10/B10. List the top three most effective promotional products used in the last 12 months [on behalf of your clients/at your company]?

� Writing instruments are also considered very effective by Advertisers

Advertiser

Promotional Products

Promotional Products& Media

Campaign vs. Stand Alone Usage

� Combining the use of both types of campaigns, about 7 in 10 have used promotional products in stand alone campaigns, and 6 in 10 have included them as part of advertising campaigns

Total(n=242)

Agency(n=95)

Advertiser(n=147)

A13/B12. Thinking of the last time in the past 12 months [a client’s campaign included/when your company purchased] promotional products, were the promotional products used as part of an advertising or marketing campaign or a standalone campaign?

(n=242) (n=95) (n=147)

37%37%

25%25%

35%35%

3%3%

36%36%

29%29%

34%34%

1%1%

Stand alone Campaign Both Other

37%37%

22%22%

37%37%

4%4%

32%

25%

22%

22%

33%

22%

22%

21%

Exhibits/trade shows

Print

Social media

Email

34%

19%

21%

20%

Media Used in Conjunction With

� Promotional products were often used in exhibits/trade shows, followed by print and social media

� They are less often used in combination with mass media such as Radio, Outdoor and TV

Total(n=241)

Agency(n=95)

Advertiser(n=146)

22%

21%

15%

19%

13%

13%

13%

13%

7%

7%

7%

4%

3%

1%

20%

19%

19%

15%

15%

14%

11%

11%

10%

6%

5%

4%

4%

1%

Experiential/special events …

Internet advertising

Promotions

Direct mail

Product samples

Contests/sweepstakes

Gifts with purchase

Point of purchase

Product placement/sponsorship

Radio

Outdoor

TV

Mobile advertising

Other

19%

17%

21%

12%

16%

14%

10%

10%

12%

6%

3%

3%

4%

1%A14/B13. What media were promotional products used in conjunction with?

Promotional Products Campaign Setup

� Most Agencies and Advertisers customized or imprinted the products included in campaigns using promotional products

� Half of promotional products were mailed to specific vertical markets

91%

59%

Total(n=242)

Agency(n=95)

Advertiser(n=147)

94%

55%

Products were customized or

imprinted

Were mailed to specific vertical

market

96%

52%

A11/B11. Thinking of the last time in the past 12 months [a client’s campaign/your company did a marketing/advertising campaign that] included promotional products, please answer the following questions.

Demographics

Who We Talked To

Total Agency Advertiser(n=400) (n=222) (n=178)

% % %

% % %

Gender

Male 53 46 62

Female 47 54 38

Age

Under 35 14 9 17

35-44 14 16 13

45-54 27 29 26

55-64 33 34 31

65+ 12 12 13

Agency56%

Advertiser44%

S1. Are you…?S2. What is your age group?S4. How would you describe your company?

Where They Work

Most Agency AdvertiserClients Are…

(n=222)Sector

(n=178)% %

Business Sector/ IndustryHealthcare 28 7Manufacturing or construction 19 25Financial services 18 6Automotive & transportation 17 4Retail 15 3Technology 15 7Food & beverage 14 4Industrial 14 5Government 12 0

S3. In what business sector/industry is your organization?A1. In what business sector/industry are most of your clients?

Government 12 0Consumer products 11 5Education 11 3Travel & hospitality 10 2Pharmaceutical & healthcare 9 2Telecommunications 9 1Restaurants 8 1Associations, institutions, unions, non-profit, etc. 7 1Consumer electronics 7 1Food processing & agriculture 7 1Groceries & food retailers 7 0Recreation 7 0Apparel wear & shoes 6 1Hardware & construction 6 2Real estate 6 0Consulting 4 2Tobacco products & supplies 2 0Housewares & appliances 0 1Marketing & advertising 0 2Media 0 1Pharmaceutical 0 3Other 19 12

What They Do

Total Agency Advertiser(n=400) (n=222) (n=178)

% % %Job FunctionSales manager/director 32 23 43Account/client services manager/director 5 8 2Account supervisor/manager/director/executive 5 8 2Marketing manager/director/VP 5 3 7Media director 4 7 0Media planner 4 6 1Sales promotion manager/director 4 3 4

S5. What is your job function?

Sales promotion manager/director 4 3 4Marketing communications manager 4 2 6Event planning manager/director 3 2 3Brand/product manager/director 3 1 6Chief creative officer/creative director 2 4 0Communications/corp. communications manager/director/officer 2 3 1Production manager 1 1 2Art director 1 1 1Chief marketing officer 1 1 1Direct marketing/direct response manager/director 1 1 1Planner 1 1 1Social media/digital/ interactive marketing manager/director 1 1 1Account planner/senior account planner/planning director 1 1 0Media buyer 1 1 0Print production manager/director 1 1 0Public relations manager/director 1 1 0Media account director 0 1 0Account executive public relations 0 0 1Other 20 20 20

Their Company Financials

Agency Advertiser(n=222) (n=178)

S6. What is your company revenue?S7. What are your agency billings?

(n=222) (n=178)% %

Agency Billings Company RevenueUnder $250K 6 $10M < $20M 20$250K < $500K 3 $20M < $50M 26$500K < $1M 3 $50M or more 54$1M < $5M 15$5M < $10M 12$10M < $20M 15$20M < $50M 17$50M or more 29

ppai 2014 buyer study report final

Sales

use of promotional products

promotional products

promotional consultants

ad agencies advertisers

majority of agencies

groups agencies

advertisers apparel

advertisers budget