1. The Confidence to Evolve
Paul Bellantone, CAE| President & CEO
Promotional Products Association International
August 2019

2. “Promotional products are welcome in places and spaces no other advertising medium can touch and deliver pass-along rates that are the envy of advertising industry.”

3. Our challenge as businesses, trade associations and industry is not about the obsolesce of promotional products as an advertising medium.

4. Our challenge as businesses, trade associations and industry is not about the obsolesce of promotional products as an advertising medium.
Our challenges and opportunities are commoditization and distribution of products.

5. The past 20 years have been transformational for our industry due to access and transparency.

6. The past 20 years have been transformational for our industry due to access and transparency. Our major value was the ability to procure product. Product procurement is now attainable by everyone.

7. The past 20 years have been transformational for our industry due to access and transparency. Our major value was the ability to procure product. Product procurement is now attainable by everyone. How do we develop and communicate our (next) value proposition?

8. “The pace of change will never be as slow as it is today.”

9. The reality
23,000 distributor companies.
3,500 supplier companies.
Same price.
Same customers.
No territories.
And the internet can serve 28 million businesses & any product, 24/7/365, for less.

10. It is not your customer’s
job to remember you.
It is your job to make yourself UNFORGETTABLE.

11. be the deciding factor… …when VALUE is equal to zero.
Price will
be the deciding factor…
…when VALUE is equal to zero.

12. PPAI

13. Discussion Points PPAI Industry and Marketplace
The Challenges and Opportunities
Buyer Research
Consumer Research
Questions and Discussion
Discussion Points

14. I am an optimist PPAI dates back to 1903
Promotional products predate the Association by at least 125 years
Our industry has withstood wars, depressions, recessions, manufacturing and technological revolutions, trends, culture
Promotional Products Work!

15. International Trade Association
PPAI
Based in
Irving, Texas, USA
Primary Members
Governance
Management
International Trade Association
Suppliers & Distributors, Business Services, Multi-line Sales Representatives
Board of Directors,
Committees, etc.
80 staff
Grow And Protect The Industry

16. PPAI Strategic Plan Drive meaningful member value
How we get members to love, trust, appreciate and engage with PPAI
Advocate for the industry
How we evangelize the power of promotional products and the profession
Develop and leverage strategic foresight
How we help PPAI, the members and the industry capitalize on market changes
Manage an efficient and progressive organization
How we continually retool PPAI to deliver second-to-none member experiences, interactions and engagement

17. Industry vs Marketplace

18. We define the INDUSTRY as the value of products that
MARKETPLACE
We define the INDUSTRY as the value of products that
are purchased through traditional suppliers and resold to buyers for distribution to consumers
We define MARKETPLACE
as the value of product
in the hands of
consumers regardless
of how it got there VS

19. Industry versus marketplace
Over the past 20 years, the MARKETPLACE is growing 2 to 3 times faster than the INDUSTRY.
YEAR INDUSTRY MARKETPLACE TOTAL
1998 $13.2 Billion $1.3 Billion $14.5 Billion
2018 $24.5 Billion $40-50 Billion $75 Billion

20. VUCA

21. Volatility. Uncertainty. Complexity. Ambiguity
VUCA
VUCA is an acronym used to describe or reflect on the volatility, uncertainty, complexity and ambiguity of general conditions and situations The term was first used in the 1990’s and derives from military vocabulary

22. Volatility
VUCA
The nature, speed and dynamics of change, change forces and catalysts

23. Uncertainty
VUCA
The lack of predictability and understanding

24. Complexity
VUCA
The multitude of forces and the confounding issues Non-linear and no clear or apparent cause-and-effect

25. Ambiguity
VUCA
The haziness of reality, the potential for misreads and the mixed meanings of conditions Cause-and-effect confusion

26. VUCA

27. VUCA

28. VUCA

29. Uber, the world’s largest taxi company, owns no vehicles
Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content, Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world's largest accommodation provider owns no real estate. Something interesting is happening.
-Tom Goodwin, 2015

30. The world’s largest taxi firm, Uber, is buying cars
The world’s largest taxi firm, Uber, is buying cars. The world’s most popular Media company, Facebook, now commissions content. The world’s most valuable retailer is now Amazon, and has more than 350 stores. And the world’s largest accommodation provider, Airbnb, increasingly owns real estate. Things change.
-Tom Goodwin, 2018

31. Mature Marketplace
Our industry must show the Confidence to Evolve.

32. Our industry must show the Confidence to Evolve.
Thoughtfully
Mature Marketplace
Our industry must show the Confidence to Evolve.

33. Our industry must show the Confidence to Evolve.
Thoughtfully
Courageously
Mature Marketplace
Our industry must show the Confidence to Evolve.

34. Our industry must show the Confidence to Evolve.
Thoughtfully
Courageously
Mature Marketplace
Our industry must show the Confidence to Evolve.
Quickly

35. Trends

36. 2018
$24.5 Billion
+5.5%
US Industry trends

37. US Industry trends 9 consecutive years of distributor growth
Sales Volume
2007 $ %
2008 $ %
2009 $ %
2010 $ %
2011 $ %
2012 $ %
2013 $ %
2014 $ %
2015 $ %
2016 $ %
2017 $ %
2018 $ %
9 consecutive years of distributor growth
Uneven and inconsistent based on company size, structure and geography

38. US Industry trends Distributor sales volume
Less than $2.5 million 22,721 $9.8 billion %
More than $2.5 million $13.5 billion %
Industry total 23,564 $23.3 billion +5.5%

39. US Industry trends
The disparity between large and small distributors continues to grow. Large distributors now account for 56% of industry sales.

40. US Industry trends
Distributor sales from non-industry suppliers increased by 11% over to $3.7 billion.
Annual Growth
+20.8%
+4.8%
+10.6%

41. US Industry trends
2018 online sales are estimated at $6.0 billion (24% of total sales) up from $5.4 billion (23%) in 2017.

42. US Industry trends

43. US Industry trends
Distributor member size breakdown (2019):
Less than $250, %
$250,000 – $1,000,000 3%
$1,000,001 – 10,000,000 2%
$10,000, %
97% of distributors report less than $1 million in promotional products sales volume.

44. US Industry trends Supplier member size breakdown (2019):
Less than $250, %
$250,000 – $1,000, %
$1,000,001 – 10,000,000 19%
$10,000, %
75% of suppliers report less than $1 million in annual promotional products sales revenue

45. By Product Category Wearables 34% Drinkware 9% Travel 8% Writing 6%
Technology 6%

46. Distribution Services
16%
Brand Awareness
12%
Business Gifts
By Program
Category 9%
Trade shows 8%
Employee recognition 7%
Distribution Services

47. Why buyers (marketers) use them
Buyer trends
55% Create brand and product awareness
42% Retention and appreciation
41% Generate conversation and referrals
25% Drive traffic
Why buyers (marketers) use them

48. Buyer trends How buyers (marketers) use them.
79% In stand-alone campaigns
69% In conjunction with other media
72% With social media
60% With
58% With internet
54% With sales promotions

49. Buyer trends Powerful Results
96% say promotional products are effective
88% moderately / extremely effective

50. Consumer findings
Travel
Technology
Date & Time

51. Consumer findings

52. Consumer findings

53. Consumer findings

56. Consumer findings

57. Consumer findings

58. Consumer reaction to promotional products
Consumer findings
Consumer reaction to promotional products
79% research the brand
87% of Millennials research the brand
83% more likely to do business with the brand
88% of Millennials are more likely to do business with the brand
80% like receiving them
71% want to receive them more often

59. Where do consumers keep them
Consumer findings
Where do consumers keep them
48% keep them on or with them
48% keep them in their kitchen
34% keep them in a vehicle
32% keep them in bathroom
Nearly one in three Millennials use them at all times.

60. Consumer findings What do consumers say?
89% recall receiving a promotional product in the past 6 months 100% of Millennials recall receiving them 85% recall the branding 76% recall the messaging 71% recall the call to action

61. 88% of Millennials had a more favorable impression of the advertiser
Consumer findings
88% of Millennials had a more favorable impression of the advertiser
What do consumers say?
82% had a more favorable impression of the advertiser after receiving a promotional product

62. Consumer reaction to other advertising
68% avoid online video ads 66% don’t watch TV commercials 57% ignore digital ads | 38% block mobile ads 50% discard direct mail 48% skip print ads 46% delete marketing 46% don’t listen to radio commercials Less than 20% discard or pass-along promotional products
Consumer reaction to other advertising

63. So what now?

64. B2B
Business to Business

65. B2B
Business to Business
B2C
Business to Consumer

66. B2B
Business to Business
B2C
Business to Consumer
H2H
Human to Human

67. Volatility
Uncertainty
Complexity
Ambiguity
VUCA

68. Volatility
VUCA
The nature, speed and dynamics of change, change forces and catalysts
Be RELIABLE in volatile situations

69. VUCA Uncertainty The lack of predictability and understanding
Be TRUSTWORTHY in uncertain situations

70. Complexity
VUCA
The multitude of forces and the confounding issues Non-linear and no clear or apparent cause- and-effect
Be DIRECT in complex situations

71. Ambiguity
VUCA
The haziness of reality, the potential for misreads and the mixed meanings of conditions Cause-and-effect confusion
Be UNDERSTANDABLE in ambiguous situations

72. The Power of your brand

73. Power of Promotional products
The most valuable forms of marketing are consumed voluntarily. You can no longer market at people. You must market with them.
- Seth Godin

74. Thank you! Paul Bellantone CAE| President & CEO
Promotional Products Association International