Promotional items, promotional merchandise and promotional gifts
The successful advertisement messenger
Pens, key rings, calendars, umbrellas, lighters, cups and printed bags: there is an almost infinite number of promotional items. With turnover in excess of 3 billion Euros1, they have high relevance in marketing communication and the trend is on the increase.
Around 10% of communication and advertising works through advertising material. More money is invested in so-called object advertising than in external advertising, radio adverts and online advertisement put together. It ranks second in the most popular advertising media in Germany2, directly behind printed advertisement. And it is justified. Whether they are promotional items, advertising materials or incorrectly referred to as promotional gifts - they are undisputedly efficient tools for marketing and sales.
"Ducks lay eggs discreetly, on the other hand a chicken makes noise so the whole estate can hear. What is the result? The whole world eats chicken eggs, just few use duck eggs." Henry Ford
However, the effect and versatility of advertising materials are still underestimated. They can be seen, felt and experienced. They are bright, subtle or elegant. They are practical, funny or simply pretty. But they should always be friendly and individual. Then they remain a positive memory and association of an
event, a company or a brand – presuming the quality and benefits are right. As one of the leading companies in Germany in the area of promotional items, we at HALFAR® want to provide you with some basic information on the use of promotional items.
1 Market data from the General Association of the Promotional Items Industry, or GWW for short.
2(Michael Scherer, Klaus Stallbaum (Hg.): Haptische Werbung. Praxishandbuch für Werbeartikel, Paderborn: WA publishers, 2009).
What is a promotional item?
Definition of term
Promotional items are items of use that are provided with an advertising message, with the aim of achieving an advertising effect. In the broadest sense, samples, bonuses and advertising materials are also referred to with this term. As a communicative product, promotional items are in competition with the classic advertising forms of print, TV and radio or are effectively combined with them.
Many companies and organisations prioritise promotional items above the classic media. The reason is that these advertising mediums can be used flexibly and convince with a targeted, long-term address, likeability and comparatively low costs. Promotional items can achieve their best effect in cross-medial use. This means promotional items and classic media are strategically and intelligently linked with each other.
Promotional items have an exclusive advantage over other forms of advertising: only promotional items can claim to achieve a haptic effect. The physical experience of a product heavily supports its recollection as advertising. Advertising materials also have other advantages, which only come into play with targeted and strategic use.
Classification of promotional items
Promotional items can be classified into two groups of items and value groups.
Give-aways are used most often. Give-ways are understood as rather inexpensive items (below 10 Euros in Germany), which are distributed to any recipients in large quantities. The advantage of give-aways is that they reach lots of possible potential customers and existing customers. The classic choices are lighters, matches, pens, balloons or sweets.
The premium takes the top position. Premiums usually have a higher value and are used more specifically. We do not just rely on the quality of the actual items, but also on more elegant or subtle print application. Good examples for uses are premium programs, individual customer presents or high quality gifts.
Promotional bags are very appropriate. They can be perfectly coordinated to suit brands, have a long-term benefit and also reach people associated with the target group in a likeable manner.
THE PROMOTIONAL ITEMS MARKET
It is not known exactly when promotional items were first used or when commercial use began. But we can assume that the basic concept of the promotional item is as old as civilisation itself. One person gives another person an object as a thank-you and memento of a service.
The first promotional items were very probably provided with names or initials. Evidence exists from the Middle Ages that businesspeople gave customers or potential customers personalised gifts. The professional use of promotional items got underway in the 19th Century with industrialisation. This means some company from the promotional
items sector can look back on more than one hundred years of company history. Competition grew and, with it, the necessity for differentiation with original advertising. The first professional approaches emerged in Germany mainly in the 1960s. However, it was a long way off the promotional items market we know today.
The market and sales today
Only in Germany estimated 5,000 companies now belong to the promotional merchandising sector and employ around 60,000 employees. The sale of promotional items is usually organised vertically in 2 stages: manufacturers and importers provide items. The classic trade as well as advertising agencies deal with selling to end-users and organisations.
The specialised trade and its services
Specialised trade is usually much more than a seller of promotional items. It responds to the needs of its customers as a specialist, advisor, developer and logistics specialist. Examples of services are as follows:
Alongside consultancy and procurement, the specialist trade also carries out logistics for promotional items. The advertising companies are often companies that need their products in large quantities at various destinations and support the retailers with logistics and shipping but also program design and IT applications.
Premiums & loyalty programs:
Many companies reward regular customers with so-called premiums or loyalty programs. Particularly individual and high quality premiums like notebook bags or backpacks can come into play, which are compiled in a program and are available to customers as sustainably as possible.
After discontinuation of the discount law in Germany, several companies now use product bonuses in order to plan, organise and distribute.
Trade fairs, exhibitions and roadshows
The leading European promotional items trade fair, which is only open to professionals, is the PSI in Düsseldorf. It takes place each year at the beginning of January. There are other leading worldwide exhibitions alongside the PSI: USA, PPAI, ASI, Hong Kong, Household and Giftshow. In Germany there is a range of smaller, local trade fairs, which are usually in-house trade fairs by promotional item retailers, as well as a roadshow organised by the BWL (Federal Association of Promotional Items Suppliers of Germany) each spring.
How do promotional items work?
Why advertise with promotional items? Advantages
Whether, when and how promotional items are used for advertising solely depends on the communication aims, contents and budget. General advantages of promotional items over classic advertising mediums are:
- Increased range (depending on the budget, product type and quantity)
- Higher advert recollection, higher contact rate when used
- Can make a more original impression
- Better "likeability"
- Higher recommendation rate
- Increased perception of customer orientation and quality
Source: Study on the effect of promotional items, commissioned by GWW, carried out by DIMA market research: www.gww.de/ueber-werbeartikel/studien/
Criteria for selection
The effect of promotional items differs from the effect of classic advertising mediums. The phases are behind the advertising effect3:
- Learning and memory
- Image and attitude
- Preference and intention to purchase
- Buying behaviour and buying
Different explorative measuring techniques are available in practice for the individual areas.
The decisive difference between promotional items and classic media is based on the fact that the physical elements of touch (haptic) are exclusively achieved by 3D advertising materials. As proven by studies from the field of neurological science, haptic experiences lead to a much better ability to recollect.
Furthermore, promotional items have a much more positive effect due to the following circumstances:
- Positive memory of the person giving the promotional item (image factor)
- Higher appreciation
- Better benefits (promotional items)
- Longer retention period
- Possibly a higher transfer rate
In summary, we can say that promotional articles can achieve a stronger effect than classic advertising media if they are used professionally, meaningfully and systematically.
It is not primarily about heating up the competition among advertising media, but it is more about pooling the positive effect of promotional items with classic advertising.
Advertising campaigns that are planned and carried out cross-medially generally achieve a much more predominant effect.
Studies and reports
Objective investigations with respect to the advertising effect of promotional items have not existed for long. However, more extensive studies have been commissioned by recognised institutes in the past years.
The lack of objective studies meant that promotional items were at an unfair disadvantage to classic media from a research and economic point of view. The fundamental criteria imposed
on media from the area of advertising, e.g. the range, communication performance and production requirements, have been proven by studies for the very first time in Germany.
How are promotional items used?
Areas of application and tasks
Promotional items are used with the following aims in modern communication:
- Customer loyalty
- Increase of likeability or image
- Improved awareness
- Generation of business contacts
- Internal or external reward for work (premiums or loyalty programs)
- Flanking, supporting sales promotion programs
For lots of smaller companies, promotional items offer an exclusive and affordable alternative to classic advertising with understandable advantages. Furthermore, we need to see if the advantages of promotional items are being fully used
from case to case and whether promotional items should ideally be used in combination with other media in terms of a cross-medial strategy or whether promotional items should be exclusively used.
List of most popular promotional items
The "ranking" of the most popular promotional items and mediums varies from year to year:
4 Influential factors for advertisement recollection
Print application – the techniques
Professional logo application is one of the four main influencing factors for advertisement recollection. Alongside the practical benefits, the quality and originality of the item, a clear advertising message from the sender is required.
Exceptions can be premiums or gifts. Only a high quality advertising message integrated in the overall communication concept enables promotional items to achieve their full effect.
Depending on the motif, item and value, there is a whole range of methods that allow the advertiser to implement a high quality and professional print application method. The following technologies are at the forefront:
Legal guidelines and principles for promotional items in Germany
Extracts of current regulations:
- WEEE (waste electrical and electronic equipment)
- RoHS ( Restriction of the use of certain Hazardous Substances in Electrical and Electronic Equipment)
- GPSG (Equipment and Product Safety Act)
- REACH (Registration, Evaluation, Authorisation and Restriction of chemicals)
- LFGB (Food, Consumer Goods and Feed Code)
Legal tax view of promotional items
The options for offsetting promotional items against taxes are regulated with various laws in Germany. The Gesamtverband der Werbeartikel-Wirtschaft provides an overview of them.