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ASI® Announces Counselor® State of the Industry 2005 Report


TREVOSE, PA – July 13, 2005 - Advertising Specialty Institute® (ASI ®), the largest media organization in the promotional products industry, announced today results of its Counselor magazine State of the Industry 2005 survey. The annual compilation unveils that 2004 was a banner year, achieving a record $16.9 billion in revenue, up from $16.1 billion in 2003, and suggesting advertising budgets are rising.

According to the results of the survey, which polled ASI distributors and ASI suppliers earlier this year, 62% of distributors and 64% of suppliers increased sales in 2004, versus 53% of distributors and 51% of suppliers reporting increases in 2003.  Just 17% of distributors and 15% of suppliers experienced decreases, greatly improving over 2003, when 23% of distributors and 28% of suppliers reported sales losses from the prior year. 

Melinda Ligos, editor-in-chief for Counselor magazine, noted:  “Back and better than ever is the best way I can describe the findings in this year's report.  Fast-paced growth may be due to more companies increasing sales with a Web-focused approach and better use of advertising dollars.”     

Shari Spiro, president of Ad Magic Promotional Advertising Inc. (asi/105162), commented:  “Business is good now.  But, it was really bad for a few years.  I think people underestimate the incredibly negative effect that 9/11 had on this industry.”  Spiro's company is back on track and optimistic for the remainder of 2005.  “Budgets have increased and I'm seeing a lot of companies with extra money trying to figure out ways to make up for the lack of advertising they've been doing recently,” she continued.

While sales are growing, gross profit margins for suppliers and distributors are remaining unchanged.  Gross margins for distributors inched forward to 34%, up one-half of one percentage point from 2003.  For suppliers, survey responses indicate gross margins were stagnant, at 35%.  

Phil Stillerman, national accounts manager for AEF Emblem Supply Co. (asi/30117), commented:  “Our material costs have gone up, but our prices have remained the same.  So, our margins have been a little squeezed the last year or two.”  Regardless, his firm has enjoyed sales growth of 10% and higher average orders, giving him plenty of confidence for the future.  “We must be doing something right.”

Moving forward in 2005 will require keeping an eye on several factors, ranging from a competitive environment to rising oil prices. 

Greg Muzzillo, Co-CEO for Proforma (asi/300094), said:  “We are aware that some of our growth has come from winning business away from other distributors, which I would call transfer growth in the industry.”  The company's sales grew 20% last year. 

Barry Hults, founder of the School for Promotional marketing and president of Hults Consultants Ltd., agreed:  “You have to grab whatever market share is available, usually at the expense of competitors.  Growth right now isn't going to come from a lot of new business in the industry.  I don't expect another go-go period in the industry for at least another few years.”

Changing times within the industry are also reflected within the latest Counselor Top 40 Distributors™ and Top 40 Suppliers™ lists.  The popular annual lists, also compiled with data from the survey results, rank top performing distributors and suppliers by 2004 total sales revenue. 

The five leading companies that comprise the 2005 distributors list are:

1. WearGuard-Crest Co. (asi/356061) - $230 million
2. HALO/Lee Wayne (asi/218450) - $207 million
3. Corporate Express Promotional Marketing (asi/168786) - $200 million 
4. 4imprint USA (asi/197045) - $191 million
5. American Identity (asi/120601) - $179 million

 The five leading companies that comprise the 2005 suppliers list are:

1. Broder (asi/42090) - $451 million
2. Norwood Promotional Products - $380 million
3. SanMar (asi/84863) - $186 million
4. Leed's (asi/66887) - $165 million
5. BIC Graphic USA (asi/40480) - $153 million

These companies will likely be relying upon their abilities to simultaneously adapt to their customers' changing expectations while improving service, in order to continue propelling forward. 

Timothy M. Andrews, president of ASI, observed:  “The results reported in this year's Counselor State of the Industry survey are impressive.  Sales revenues have rebounded nicely from a low of $15.6 billion in 2002, the lowest sales volume reported within the last five years.  I believe focusing efforts upon improving customer service and keeping a watchful eye on economic factors will prove important as we prepare for the second half of 2005.”

To learn about more trends, successes and important issues facing industry companies and for the complete Counselor Top 40 Distributors™ and Top 40 Suppliers™ lists, read the full version of the Counselor State of the Industry report, available at www.asicentral.com/asp/open/news/soti/index.asp.  For more information about ASI research initiatives, contact Larry Basinait, director of marketing research at ASI, at lbasinait@asicentral.com.  

About ASI 
Advertising Specialty Institute is the largest media organization serving the promotional products industry, with a membership of 21,000 distributor firms (sellers) and supplier firms (manufacturers) of promotional products.  Supplier firms use ASI print and electronic resources to market products to more than 18,000 distributor firms.  Distributor firms use ASI print and electronic resources, which contain more than 700,000 promotional products, to locate supplier firms and to market services to buyers of promotional products.  It provides catalogs, informational directories, newsletters, magazines, websites and databases, and offers interactive e-commerce, marketing and selling tools.

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