April 10, 2006 – Trevose, PA – The Advertising Specialty Institute® (ASI) released results of its annual promotional products industry sales analysis, indicating revenues jumped 5.1 percent from 2004 to $17.8 billion in 2005 – the third year of continuous increases and a new record.
Spending on promotional products was twice as large as Internet display advertising, five times greater than outdoor advertising and more than cable TV advertising*.
The exclusive analysis, conducted by ASI, shows that growth in 2005 was driven by increased recognition that promotional products should be included in marketing campaigns and by the overall strength of the U.S. economy.
“This analysis indicates that the promotional products industry continues to experience solid gains, including three years of increasing sales, as more and more companies realize that promotional products – apparel items, pens, mugs – have a lasting impression on recipients and provide a strong return on the marketing investment,” said Timothy M. Andrews, president of ASI. “We’re proud of how the 19,000 distributor firms in our industry have developed and advanced, and how the 3,300 suppliers continue to innovate and produce quality products that sell.”
The ASI promotional products industry sales estimate is widely acknowledged as the most accurate and most comprehensive available, derived by a census of total promotional products sales from 19,000 ASI distributor members. Distributor members of ASI represent approximately 95 percent of all sales volume in the promotional products industry. An estimated valid median dollar value was assigned to the remaining relative five percent of companies that are not ASI members.
Furthermore, the growth of the promotional products industry has outpaced the growth rate of the U.S. economy as a whole. The U.S. Gross Domestic Product, while healthy, posted a 3.5 percent gain in 2005. This figure declined from 4.2 percent in 2004.
ASI distributors offered several reasons for the positive performance in 2005.
“Our business is continuing to build momentum from sales growth in 2005,” said Marc Simon, CEO of Counselor® Top 40 Distributor™, HALO/Lee Wayne Corporation (asi/218450). “Current customers are buying more, our average order size has grown, and we are experiencing the surge in productivity from our most successful recruiting year in history last year.”
“The industry remains vibrant, especially when compared to other media,” said Tad Fogel, CAS, owner and sales manager for Fogel Advertising Services (asi/195768). “Although, for the traditional distributor, pressure is abound from Internet commerce and other sources.”
“The industry is as strong as we make it,” said Kayla Tollen, CAS, owner of Kayla Advertising (asi/239482). “Look for opportunities, provide above and beyond expected customer service levels. Build good factory relationships. Clients, factories and distributors should all receive benefits from doing business together.”
As strong sales were reported by distributors, many suppliers also reported a solid 2005. “Our sales in 2005 were up approximately 40 percent over 2004,” said Sam DiBiase, vice president of sales for Counselor Top 40 Supplier™, Leed’s (asi/66887). “Thus far for 2006, we are confident in continued growth opportunities. The general economy remains strong and we are hearing from distributors that spending on promotional products from many of their key clients is up, versus this same period last year.”
Distributors are optimistic about 2006, but continue to watch several factors that will impact the industry – the volatility of oil prices, the proliferation of pricing information available on the Internet, and the increasing importance of China and India as product manufacturing forces.
Hence, ASI is closely monitoring trends and shifts in the marketplace and keeping industry distributors and suppliers informed with up-to-the-minute information from its many print and electronic publications. Also, this year, in addition to its five annual nationwide trade shows, it launched The Advantages Roadshow-a traveling trade show that tours nearly 60 cities across the country and provides opportunities for industry professionals to meet and conduct business.
To learn more about the annual sales analysis and other ASI research studies, contact Larry Basinait, executive director of membership services and research at ASI, at [email protected].
About ASI
Advertising Specialty Institute is the largest media organization serving the promotional products industry, with a membership of over 22,000 distributor firms (sellers) and supplier firms (manufacturers) of promotional products. Supplier firms use ASI print and electronic resources to market products to more than 19,000 ASI distributor firms. Distributor firms use ASI print and electronic resources, which contain more than 750,000 promotional products, to locate supplier firms and to market services to buyers. ASI provides catalogs, informational directories, newsletters, magazines, websites and databases, and offers interactive e-commerce, marketing and selling tools. Visit www.asicentral.com.
* Source: TNS Media Intelligence is the leading provider of competitive advertising and marketing information – across brands, media, industries and markets. Estimated 2005 spending for outdoor advertising $3.5 billion, Internet display ads $8.3 billion, cable TV ads $15.9 billion.