With marketing dollars increasingly moving away from traditional media, ad specialty distributors have a unique opportunity right now to gain a bigger piece of the advertising pie. Here are five steps distributors can take to lure dollars away from the big ad agencies.
Just imagine that simple text message that Billy texts to his girlfriend as the latest Foo Fighters song blasts from his commercial-free Sirius satellite radio. Next door, his younger sister is online reading the latest gossip about Britney Spears and instant messaging her friends about all of the new dirt she has discovered. Dad is huddled away in his den hopelessly addicted to finishing the Halo 3 video game on his Xbox 360. And Mom has just settled down to watch her favorite show, which she TiVoed an hour ago. Of course, she quickly skips past the commercials to get to the good parts.
A comment on the modern American family? No. This is the state of consumer media consumption today.
“There is a lot of money being left on the table because we are not really that good at positioning promotional products to replace forms of traditional advertising.”
– David Woods, Adventures in Advertising (asi/109480)
Long gone are the nights when families gathered around to watch “Must See TV.” Today, in the digital age, people are watching what they want, when they want or are not watching at all. Analysts call it media fragmentation; some marketers call it their worst nightmare.
Looking for alternatives to blasting the airwaves, marketers are shifting their dollars every which way in an attempt to break through the clutter. This raises new opportunities for promotional products purveyors and other marketing agencies beyond Madison Avenue, according to some experts.
Distributor Case Study: How We Became A Marketing Agency
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| Ace Marketing & Promotions (asi/103085) has taken the leap from being just a seller of promotional products to being a marketing agency that prides itself on its ability to provide marketing solutions to clients. “We like to say that we fit neatly between the ad specialty distributor and the ad agency,” says Michael Trepeta, president of Ace Marketing.
He says company executives decided to take the plunge when they realized how difficult it would be to grow the business. “As a pure promotional products distributorship it is a constant battle to look for new salespeople and new customers,” says Trepeta. He says the company saw it was vital to differentiate itself from other distributors in order to grow and attract quality salespeople.
The transformation didn’t occur over-night: It took Ace Marketing about a year to determine and then achieve the right solutions. The company evaluated the needs of clients and the initiatives of buyers. Trepeta says what they determined was that the buyers they were dealing with were also the decision-makers that directed many of the business decisions in other areas. “Our clients have always bought from Ace Marketing because of the value we put in the relationship,” says Trepeta. “We have earned their confidence over time. We felt it would be natural that the clients would rather work with a single vendor that can effectively provide the majority of their marketing solutions, as opposed to five or six vendors separately.”
An example is how the company recently began working with a new client in the commercial refrigeration field. Ace Marketing sat down with the company, discussed where the client saw themselves in the future and developed a corroborative road map for how to get there. “They obviously had a formula for how to operate and expand the business itself, but no idea on how to brand the business and market it,” says Trepeta.
So Ace Marketing created a new corporate logo for their future branding and marketing. This then evolved into the implementation and development of marketing ads, collateral material, a corporate Web site, promotional products and a database management solution. “A year ago, we would have only been providing them with a leave-behind for sales calls, and maybe an end-of-year gift for their employees,” says Trepeta.
Ace Marketing provides several primary services to clients, including direct importing, incentive solutions and rewards, printing and forms management, fulfillment and warehouse, e-commerce and Web design, database management and integrated marketing solutions. “We were careful to choose a logical set of solutions that all have the ability to complement each other,” says Trepeta. Year over year, Trepeta says Ace Marketing has seen a sales increase of about 20%. Great results are expected now when salespeople present to their client database, as the ability to promote and provide other services has enabled them to become “trusted advisors that provide promotional marketing solutions,” says Trepeta.
For other distributors looking to turn their companies into more marketing-type agencies, Trepeta’s advice is to have the ability to “provide true solutions. It is better to focus on services you can actually provide and are good at than to offer a solution you are not sure if you can handle. – Meghan Hurst
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“Never in the world of marketing has the playing field been so flat before,” says Richard Laermer, author of Punk Marketing and founder of RLM Public Relations, based in New York. “It is no longer just big agencies saying, ‘We’ve been in business 30 years, trust us.’ It is also, ‘We’ve been in marketing six months. Here is something you’ve never thought of before.’”
Dollars have been steadily draining out of TV and other forms of traditional media. For the first nine months of 2007, the top-10 advertisers spent $700 million less on TV, according to Nielsen Monitor-Plus. Overall, measured media dollars sank 0.1%.
In turn, many end-users are exploring different channels in which to invest these dollars. This includes newer options like the Internet, where spending was up 24%, as well as some old favorites like freestanding insert coupons (up 37%) and Sunday newspaper supplements (up 33%). It also includes ad specialties. One good reason: Consider the fact that event marketing, trade shows, direct mail and other “high touch” tools are now getting long looks by decision-makers. All of these channels offer promotional products providers a chance to steal dollars away from traditional advertising budgets.
“Mass media, television and radio are losing audiences. It is becoming more fragmented, and as people get saturated with more advertising, they are also paying less attention,” says Mark Yokoyama, director of marketing for ePromos Promotional Products Inc. (asi/188515). “Promotional products are one of the last really effective ways to push a message to people in a way that they are receptive to. If you were to make an argument for promotional products to be a larger part of ad budgets, just look at the cost effectiveness, reach and cost per impression. Ad specialties are received in a positive way versus commercials, which are interruptions that are annoying and take time out of your life.”
So, how can you take on the big-time ad agencies and grab a bigger chunk of marketers’ advertising budgets? Here are five steps to take that will surely help to expand your revenue sources this year.
Change The Way You Sell
To take money from the ad agencies and begin to garner a piece of the advertising dollars available today, ad specialties distributors must think like an ad agency. It isn’t about just taking orders for the next thousand pens or the regular corporate gifts at Christmastime. It is about helping the client pick a product with purpose. “[Distributors] need to really understand who the customer is, what they want and what the clients’ goals are,” says Nancy A. Shenker, principal of theONswitch, marketing consultancy, Thornwood, NY. “Promotional product vendors are sitting on a gold mine to the extent that one of the realities is everyone loves free stuff. Their challenge is how does it become free stuff with a purpose, free stuff that solidifies a brand and creates customer interaction? Very few promotional products people will ask me what my goal is. They just ask, ‘What’s your budget?’ I say, show me what you are proposing and how it will help me grow my business.”
David Woods of Adventures in Advertising (asi/109480) says that distributors need to fundamentally change their mentality and their approach to the market. “We have to start thinking like ad people instead of promotional products ad people,” he says. “There is a lot of money being left on the table because we are not really that good at positioning promotional products to replace forms of traditional advertising. Too often we think like ad specialties salespeople and do not position them as part of the overall advertising mix. It really requires creative thinking, and the really creative distributors will jump in and take market share.”
Laermer agrees. “If you know how to promote it well, you will rise above all of the rest.” Years ago, he represented an inflatable furniture company. He mailed out pitches with an inflatable wastepaper basket with the message, “We know you’re going to throw this out. Let us help you with it.” Of course, it also included the firm’s phone number and the client’s logo. The response was overwhelming, “because it rose above the noise,” says Laermer. “You have to be a little wild and crazy.”
Rally Around ROI
Return on investment continues to be one of the chief concerns among marketers. With the average tenure of a chief marketing officer lasting roughly three years, proving the effectiveness of a marketing effort is paramount. That’s why creating a call-to-action can make all the difference.
For example, a message and text address can invite skiers to get rates and weather conditions just by texting via their mobile phones. The text address can be featured on any number of promotional items, whether it’s a coaster or lip balm or a USB drive. “That makes it easy to track back,” says Yokoyama. “You can tell how people are interacting with the promotion without worrying about them forgetting about it by the time they get back home. With the mobile phone, they can take action then and there.”
Driving people to a Web site with a code that enables them to earn further premiums is also effective. Todd Singleton, owner of The Singleton Company, Los Angeles, recently sent out a direct mail piece to 100 key customers that presented an offer to register online for one of 25 free products. This included a free sports bag and Swiss Army flashlight. He had 42 responses in 24 hours, and would have had more, “but my server blew up.” By using the Web, “you can show proven results,” he says.
Other opportunities to track consumer interaction include offering Sudoku booklets and providing the solutions on a Web site. “If premiums are being used properly as part of a campaign and being tracked with real goals and metrics the same way you would with a media buy, you will learn how effective they really are,” says Yokoyama. “The more fully integrated a campaign is that can be related with ROI, the more they will believe it when they see results.”
Distributor Case Study: How We Expanded Our Services
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| Promopeddler.com (asi/300367), an online company, decided to incorporate more marketing-oriented services into its business because the term “ ‘promotional product company’ is too limiting,” says Dale Kirby, director of marketing at Promopeddler.
She says that what Promopeddler does is already very similar to the role of a marketing company. They compete in a keyword- and category-driven market, while as an industry they market products and services and brand companies and ideas. “What most marketing firms charge big bucks for, we offer for free; branding and marketing advice from a seasoned marketing professional,” says Kirby.
Promopeddler sponsored the Portland Business Journal’s Power Breakfasts for a year in order to market to select business decision-makers. Every month they put a new and interesting promotional product on the table in front of the attendees to demonstrate Promopeddler’s skills and why they should be the “go-to company” when branding is needed. This, says Kirby, shows how Promopeddler really is a marketing firm rather than just a promotional products distributor.
To make itself stand apart from the crowd even further, Promopeddler has been offering free online videos for the past two years that focus on different marketing problems and questions people pose to the company. As the “Branding Ideas Guru,” Kirby receives questions through an online form that describe a company’s branding objective, price point, audience and other relevant information. “I look at their company’s Web site, sometimes asking them further questions to fine-tune my selections, and then send links to the promotional products I have chosen,” says Kirby.
Promopeddler’s “ask and we’ll help” marketing concept is what sparked the idea to feature the actual questions and answers, making them a very open and valuable source of information and guidance.
To get its message to customers, Promopeddler uses e-mail, marketing programs, blogging, sponsors local events and, of course, utilizes its Web site. “We have had to build our brand, back it up with follow-through and prove ourselves in the marketplace,” says Kirby. “Saying it and doing it are two completely different concepts. Buyers want to know they are getting advice from someone who understands branding.”
With the successes they have had in exercising these practices, Kirby says Promopeddler is on track to have its best year ever in 2008. And that follows being ranked as number 977 last year on the Inc. 5000 list of the fastest-growing companies in the U.S. In fact, Promopeddler increased its revenues from $1.3 million in 2003 to $7.6 million in 2006, a 362% three-year growth rate.
“Our revenue,” Kirby says, “reflects our success of establishing our brand.” – MH
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Highlight High Touch
As the old ad slogan goes, most marketers want nothing more than to reach out and touch someone these days. While TV, radio and other formats may or may not touch the recipient – a promotional product can.
Don’t approach them and say buy my product versus an ad, says Karen Scherer, owner of A Flamingo Glass & Engraving Co. (asi/101733). “You try and tell them, ‘You need to make it more personal. Instead of buying an ad which they might not see, put something in their hands which they will keep. That is personal.’ ”
Because measurable marketing buzzwords like ROI and consumer engagement are so popular right now, high-touch marketing programs are often the perfect solution. “It is easier than ever to pitch promotional products because of the additional clutter in the overall media and advertising mix,” says Terry McGuire, senior vice president of marketing of HALO/Lee Wayne (asi/356000). “Ours is the only ad medium that is tangible. If you buy 250 calendars, you know 250 clients received your message. You can mention how many times the recipient will see the advertisement, how long it will last and so on. When you hand someone a product with an ad on it, the results are direct and immediate.”
Of course, ad specialties can be equally effective when sent through the mail, says Ken Goldman, owner of Goldman Promotions (asi/209700). “ ‘Lumpy mail’ seems to have more importance and teeth to it than in the past.”
Boxes, brightly colored carrier envelopes and tubes are generally the first thing a recipient will open. Goldman says even trivial items like expanding sponges, rubber dollars “that promise to stretch your money” and the like are effective “in getting their attention. Then offer a premium item to move them into action.” He has seen strong results with offering MP3 players and digital photo albums in exchange for making a purchase or answering a survey.
“Direct marketing is important for relationship building,” he says. “Targeting key buyers and prospects with promotional products has always made sense, but it does even more so today. Traditional media is so diverse and spread out; it is hard to reach them that way.”
Stress Longevity
Unless it is Wendy’s “Where’s the beef?,” Coca-Cola’s “I’d like to teach the world to sing,” Budweiser’s “Wassup!” or any of a handful of other timeless ad slogans that managed to resonate with consumers, broadcast ads tend to come and go.
A good promotional product, however, has a much better chance to create a lasting impression for days, months or years, says Scherer. “One of the big things we do is to ask people who are sitting at their desk to look and see what they have kept,” she says. “We all get little trinkets every day, and people do keep them. It just has to be different, creative or meaningful. A radio ad is nice, but between a stoplight and wherever you’re going, you’re going to forget it.”
Ad specialties offer durability, says Singleton. “What we do is fun,” he says. “You know how many times I hear, ‘Dude, you gave me that thing four years ago and I still have it!’ ”
Win Oppel, president of Ad-Merica (asi/107275), says the problem with spending $2,000 on a half-page ad or $500 for a business lunch for top clients is “Who remembers?” However, “a logoed attaché case with their initials on it, they’ll keep that for two or three years. Take the same dollars and direct market it,” says Oppel.
When done right, an ad specialty item lasts so long that it can offer countless more impressions than Joe Isuzu ever did.
Integrate With Traditional Media
Despite the many advantages of promotional products, the reality is traditional advertising is still the sexiest, easiest way to reach a large audience. It is highly unlikely that automotive, airline or even air freshener brands will abandon TV, radio, print or outdoor in favor of ad specialties. That is why distributors need to embrace the idea of integration. The ol’ if-you-can’t-beat-them-join-them attitude is essential in this day and age, as marketers look to create “360-degree programs.”
One of the keys for distributors is to get in early on the planning process. “That’s where the juice is,” Singleton says.
He points to a “gig we did for the Hollywood Reporter’s 75th anniversary.” Because Singelton was involved from the beginning, he was able to leverage the many assets of the overall campaign for the promotional products push. This included creating “Mogul mugs” using caricatures of eight of Hollywood’s greatest moguls including Walt Disney. Rate sheets were also sent out with a box of bagels. “As long as we’re in on the planning session, we know how everything fits together.”
If ad specialty items are part of a larger program, “they can be incredibly valuable,” Shenker says. She was involved in a high-end promotion with Citi that involved free diamond earrings. “We were targeting female physicians who could obviously spend a lot.”
Recipients received one earring and were invited to make an appointment with a financial advisor to receive the other. “It fostered involvement and interaction. Any company can just buy mugs; you need to come up with items that the cleaning lady won’t end up taking home.”
Any marketer who is just looking at ads “needs to do the math,” says McGuire. “If you come up with a plan to get the most exposure out of your investment, just look at the pennies per exposure. It’s an easy sale when you compare ad specialties against any other ad medium.”
Kenneth Hein is a freelance writer based in New York
Ad Agencies: Know Your Competition
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| If distributors are going to gain a bigger piece of marketers’ ad budgets, then they better be intimately familiar with their true competitors. Ad agencies face more challenges than ever. For many large clients, ad agencies were the end all for all things marketing. A company like Coca-Cola would hitch its wagon to one holding company and use all of its related services.
This means if it chose the Interpublic Group of Companies’ McCann-Erickson as its agency to create its TV, print and radio ads – it would also likely use McCann’s sister agencies like Draftfcb for direct marketing, Weber Shandwick for public relations and so on.
Today, however, many brands are offering jump balls to a slew of agencies – letting the best idea win rather than allegiance to a holding company. What’s more, media has become so fragmented that big Madison Avenue agencies are having a hard time being all things to their clients. This opens the playing field significantly for ad specialty distributors. “One-stop shopping was what clients wanted,” says Simon Sinek, president of Sinek Partners marketing consultancy in New York. “What’s happening now is clients are looking for a team of small agencies. They want the best of the best.”
This has caused large agencies to form or acquire specialized agencies. Draftfcb, for example, recognized that event marketing is exploding, so it formed 361 Experiential late last year. Most agencies have their own promotional arms or dedicated companies. And some, like Carlson Marketing Group, are actual ASI distributors in and of themselves. Depending on the circumstance, they can also outsource. Drew Livingston, owner of TrashTalkFCM, Los Angeles, will often be tapped by ad agencies looking for his expertise in nontraditional and event marketing. “Eighty percent of my business is from agencies’ media buying companies owned by the large holding companies.”
He says he works with ASI distributors and will buy direct as well. “I recommend unique, targeted items,” he advises. “I use my best judgment as to who will deliver the goods on time and give me the best quality for my client.” – KH
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