First Quarter 2009 Sales Off 17.6%; Industry Sales Flat for 2008
TREVOSE, PA – April 24, 2009 - The Advertising Specialty Institute®, the largest media and marketing organization serving the advertising specialty industry, announced today that first quarter 2009 sales were off 17.6%.
In 2008, overall advertising specialty industry sales reached $19.8 billion, up 1.2 percent over 2007, as estimated in the January 20, 2009 edition of PromoGram from Counselor magazine.
In addition, the exclusive ASI first quarter sales report showed that the year-over-year decline represented a decrease of $700 million in ad specialty sales compared to first quarter 2008. Less than a quarter of distributors (24%) reported an increase in sales in the early months of 2009. Only two quarters ago, 40% had reported an increase in sales.
For the full year 2008, spending on advertising specialties, or promotional products – items and incentives branded with a company logo or marketing message – was 3% greater than radio advertising*, $12.8 billion greater than outdoor display ads** and ahead of the 2.6% estimated decline in overall U.S. advertising for 2008***. The industry increase also matched the 1.1 percent growth rate for the United States GDP for the same period.
“In this time of economic challenges, the estimate for advertising specialty sales in 2008 indicates a better year than what 2009 is shaping up to be,” said Timothy M. Andrews, president and chief executive officer of ASI. “We’re cautiously optimistic for 2009, but one of the smartest things businesses can do right now is increase their marketing and advertising to grab market share.”
“ASI invests $1.3 million each year to educate suppliers and distributors on how to market themselves more efficiently, network more effectively and reach qualified business partners,” Andrews said. “An exclusive ASI impressions study is also available that provides ROI figures that prove the value of advertising specialties in marketing campaigns.”
Reactions from industry distributors included ideas for growth and improving operations.
“You will lose business if you are not actively selling the idea that promotional products help customers get new business,” said Dan Welborne, vice president of promotional marketing for Top 40 firm WorkflowOne (asi/333647). “Companies need to align operating expense to their contribution line. For many companies in 2009, this may represent a significant decrease in operational expense.”
“Organic and green products are trending up,” said Anna Johnson, president, Super Embroidery Inc. (asi/339634). “Although many people say companies are spending less, they are still spending. Some companies are starting to buy more giveaways for their employees and customers to lighten the mood. We’re also finding customers prefer to use the Internet more and are purchasing products that have bright and cheery colors.”
“2008 started off strong for us, but turned into a challenge by the end of the year,” said Gary Tuchler, MAS, region vice president of Top 40 Distributor firm Brown & Bigelow (asi/148500). “Recent activity and order levels would indicate, however, that businesses are starting to shed some concerns and are realizing their business will go on and that a quality promotional products campaign is an investment in their future.”
Industry suppliers also voiced their opinions and advice for moving forward.
“2008 was a dynamite year for SnugZ USA and the best in our 20 year history,” said Brandon Mackay, Counselor Power 50 leader and chief executive officer of SnugZ USA (asi/88060). “With that said, lean and mean is the key to survival. We’ve found the glass-half-full approach to run and navigate our business through this economic storm and have become infinitely better at understanding our business.”
“The overall ad specialty market is relatively huge,” said Tom O’Boyle, president, Journalbooks/Timeplanner Calendars (asi/91340). “Companies with the right products, price and promotions are doing well. The trick in this economy is that all three of those cylinders must be firing. Most suppliers are focusing on only one of them, pricing, and if they were honest they would tell you that they are doing poorly.”
“In some respects, these are good times,” said Leigh Somers, owner, Say Thank You With Coffee (asi/85155). “The larger sizes of our individually personalized coffee packages, the 8-ounce and 4-ounce sizes in particular, were strong sellers in 2008. This year a year for evolution and we are working to build our brand in anticipation of 2010 and to take advantage of the economy as it improves.”
Industry companies are optimistic about 2009, but continue to watch several factors impacting the industry:
1) Volatile economic conditions in North America.
2) Increasing demand for “green” products, despite the recession.
3) Continuing fluctuations of prices for materials used in manufacturing.
To learn more about the annual sales analysis, click here, visit www.asicentral.com, or contact Larry Basinait, executive director of research services, at firstname.lastname@example.org.
Advertising Specialty Institute is the largest media and marketing organization serving the advertising specialty industry, with a membership of over 26,000 distributor firms (sellers) and supplier firms (manufacturers) of advertising specialties. Supplier firms use ASI print and electronic resources to market products to over 22,000 ASI distributor firms. Distributor firms use ASI print and electronic resources, which contain nearly every product in the industry from more than 3,500 reputable suppliers, to locate supplier firms and to market services to buyers. ASI provides catalogs, information directories, newsletters, magazines, websites and databases, and offers e-commerce, marketing and selling tools. Visit asicentral.com.
* Source: Radio Advertising Bureau. ** Source: Outdoor Advertising Association of America. *** Source: The Nielsen Company.
Methodology – This analysis from ASI is widely-acknowledged as the most accurate and most comprehensive estimate available, derived by a census of total advertising specialties sales from more than 26,000 ASI distributor members. Distributor members of ASI represent approximately 95 percent of all sales volume in the industry and an estimated valid median dollar value was assigned to the remaining relative five percent that are not members of ASI.