March 23, 2005 – Trevose, PA – Advertising Specialty Institute®, the largest member organization in the promotional products industry, said its annual analysis of industry sales trends indicates revenues increased to $16.9 billion in 2004, The highest figure ever recorded and up 4.7 percent versus 2003. Distributor firms also are optimistic for a strong 2005.
ASI’s fourth quarter Industry Sales Survey estimates that 61 percent of ASI distributor member firms indicated that revenues in the fourth quarter 2004 were higher than the same quarter for 2003. Most remaining distributors reported sales that were unchanged from one year ago.
In the exclusive survey conducted by ASI, distributor firms cited two principal reasons for experiencing a solid year in 2004: 1) the use of promotional products are becoming more widely accepted and integrated into an organization’s marketing mix and 2) the overall economy in North America continues to strengthen.
“This year we’re seeing the industry’s highest annual revenue ever,” said Timothy M. Andrews, ASI’s president. “After a sales downturn that began in 2001 and continued in 2002, we’ve now rebounded to this new record of $16.9 billion. Fourth quarter 2004 statistics are strongly suggesting that the industry is healthy and sales are continuing on an upward swing for 2005.”
For 2005, nearly three-quarters of distributor firms are forecasting that business will increase at least five percent, regardless of distributor firm size. Only eight percent are predicting flat or revenues below 2004.
ASI distributors offered a number of explanations for the 2004 performance.
“Systemwide sales in 2004 topped $118 million, making it the best year in our company’s history,” said David Woods, CEO of AIA (asi/109480), a company ranked third on the Counselor ® magazine Top 40 Distributors™ list and a wholly-owned subsidiary of 4imprint Group PLC of the UK. “We feel the economy was quite strong in 2004 – probably better than many people thought. We are particularly pleased that 2005 is off to a very strong start and we are already expecting another great year.”
“We had a record year, with sales of $73.1 million, up 17 percent over prior year,” said Kevin Lyons-Tarr, president of 4imprint, Inc. (asi/197045), also a wholly-owned subsidiary of 4imprint Group PLC of the UK.
“Proforma’s sales grew almost 20 percent in 2004,” said Greg Muzzillo, founder and Co-CEO of Proforma (asi/300094), a company ranked seventh on the Counselor ® magazine Top 40 Distributors™ list. “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. But, I have heard many of the success stories from our owners, and I know some of the business they are winning is new business. Companies are looking for new, more effective ways to spend their marketing budgets, as many are discovering that advertising on satellite radio, TiVo television or the Internet is not as effective as it once was.”
There may also be the beginnings of a trend that shows that printing, graphic design and other industry-related shops are expanding into promotional products.
“I’ve sold screen printing for nearly fourteen years now and am new to ASI products,” said Sandra Rodriguez of Graphic Impressions, dba D and S Designs (asi/212952). “So, I am seeing tremendous growth, as both new and existing customers find out we can meet their needs for promotional products. Most of my customers are still spending on them and so must be seeing a good return on their investment. I expect to see continued good growth for my company.”
Although bullish for 2005, distributor firms are citing two concerns they are wrestling with: 1) increased pricing competition, and 2) stiffer competition from overseas firms.
To learn more about this survey or other ASI research studies, contact Larry Basinait, director of marketing research at ASI, at [email protected].
Advertising Specialty Institute is the largest media organization serving the promotional products industry, with a membership of 20,000 distributor firms (sellers) and supplier firms (manufacturers) of promotional products. Supplier firms use ASI print and electronic resources to market products to more than 17,000 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. Visit www.asicentral.com.