Monthly Archives: February 2012

Guest Column – Raving Fans, Or Brand Champions? Both!

I was browsing through my Google Alerts this weekend and came across the following column by Jay Deutsch is CEO of Bensussen Deutsch & Associates. I was especially moved by Jay’s powerful statement that, “Merchandise allows brands to create a relevant experience around the consumer and generate advocacy in a way no other marketing medium permits.” I couldn’t agree more.

Thanks to Jay and the folks at brandchannel for permitting me to repost his column in my Connections blog. Enjoy the read.

The Super Bowl Ads Most Don’t See: How Merchandise Turns Raving Fans into Brand Champions
by Jay Deutsch
February 10, 2012

The talk this week was which Super Bowl ads were the funniest and which flopped. Multimillion-dollar TV spots are certainly the most familiar and talked about form of Super Bowl advertising, but the sponsorship story doesn’t end there.

Those of us fortunate enough to attend or be in the host city of a Super Bowl, World Series, Final Four, Daytona 500, Stanley Cup Final or Olympic Games are exposed to another more tangible advertising medium. When done right, this branding vehicle transcends socioeconomic status and extends brand affinity across demographic targets and allows the “ad” to live well beyond the event.

That medium is branded merchandise.

From seat cushions to bobbleheads to branded apparel to limited-edition VIP gift bags, branded merchandise is a fixture at all sporting events. Merchandise allows brands to create a relevant experience around the consumer and generate advocacy in a way no other marketing medium permits. Unlike a $3.5 million 60-second TV commercial that airs and fades away to the annals of YouTube, engaging merchandise will live on in offices, cars, bedrooms, family rooms and man caves long after the season ends. And after all, you can’t wear a TV spot.

With traditional advertising, you can change the TV channel, you can turn the radio down and you can flip the page in the magazine. But with merchandise, the message doesn’t turn off.

The outcome of a strategic, targeted merchandise campaign is that consumers will actually embrace that relationship with the brand. It becomes an extension of who they are. Because the brand comes to life. It’s real.

This is the power of merchandise. It captivates and creates loyalty.

The world’s most iconic brands understand this and take effective merchandising opportunities very seriously with all of their professional and college sports sponsorships. Pepsi, FedEx, Verizon and many of our other Fortune 500 clients are fully engaged in 1-to-1 relationship marketing through branded merchandise activations. They’re successful because they treat these opportunities like their other marketing campaigns and work hard to ensure the merchandise delivers the right message.

The use of branded merchandise is growing. The Advertising Specialty Institute (ASI) reports the specialty advertising industry saw sales of more than $18.5 billion in 2011, up 6.2 percent from 2010. That’s on the heels of a 9 percent increase.

Consumer surveys conducted each offseason by SportsBusiness Journal and Turnkey Sports & Entertainment show that avid sports fans are loyal to the brands that support their favorite leagues and teams. Advertisers capitalize on this passion by giving fans products that allow them to show off their team pride.

The greatest sense of pride for a sports fan? Being able to say, “I was there!” Or, “Check out what I got!” Merchandise not only provides the proof, it establishes an emotional bond between the brand and consumer. In fact, the New England Patriots created a commemorative item by having us print “I WAS THERE” along with the Jan. 21 date and “vs. Baltimore Ravens” on the rally towels we provided for their AFC Championship Game, because they realize the power and pride generated by connecting fans to that pivotal moment.

Longtime Super Bowl sponsor Bridgestone also recognizes the impact of branded merchandise. On Super Bowl Sunday, the tire maker once again outfitted all 70,000 stadium seats with a custom Super Bowl Halftime Show seat cushion. The payoff is clear: Fans value a gift they can use again and again, which drives additional brand impressions. Bridgestone benefits from highlighting its brand association with the NFL via Super Bowl merchandise, while reinforcing its commitment to producing quality tires by providing a treasured promotional product to consumers. Every year, I watch fans covet their Bridgestone seat cushions. This positive association is at the core of enhancing overall brand affinity.

The Super Bowl is the biggest sporting event in the world, and the NFL and its sponsors understand merchandise ensures the game and fan experience are immortalized. What’s the first thing players from the New York Giants did Sunday night? Put on a Super Bowl XLVI champion T-shirt and cap, of course. Whether it’s retail sales or via promotional efforts, the power of merchandise was on full display in Indy.

As a marketing tool, the medium of branded merchandise allows fans to proudly express their affiliation, loyalty and passion for their favorite brands. The right piece of merchandise turns spectators into brand ambassadors. It has a chance to become part of their everyday environment and live on in the hearts and homes of fans.

Think of all the brands we interact with each day. It is a branded world and merchandise brings brands to life. Just remember, watch your TV—live your merch.

Jay Deutsch is CEO of Bensussen Deutsch & Associates, Inc., and co-founded the company with his best friend, Eric Bensussen, in 1984. Since their first order with the Seattle Seahawks, Jay and Eric’s mission has been to help Fortune 500 companies from every industry and major sports leagues successfully engage consumers and fans through the medium of branded merchandise.

Reposted with the permission of brandchannel.com.

PPAI Distributor Quarterly Sales Barometer – 2011 4th Quarter – PREVIEW

As a subscriber to this blog I am providing you with a preview of the PPAI Distributor Quarterly Sales Barometer – 4th Quarter 2011.  If you have any questions about this or any PPAI research, please contact Saritha Kuruvilla at sarithak@ppa.org or 972-258-3043. Or, logon to the Research section of the PPAI website

Fourth Quarter Results

A survey of 502 distributors, both members and nonmembers of PPAI, revealed growth of 6.85 percent in the fourth quarter of 2011 compared to the same period in 2010. The median increase was 9 percent. In looking at the entire group of distributor responses, we find that 68.6 percent of distributors saw an increase in fourth quarter performance over the same time in 2010, while approximately a fourth (26.48 percent) of distributors saw a decrease and only 4.66 percent saw no change. Almost six out of ten distributors (or 58.7 percent) reported achieving their sales targets for the fourth quarter, while 41.3 percent did not. Those that did not meet their sales targets cite troubles with fewer corporate orders, lagging holiday sales, increased energy costs, less recognition orders and high overheads.

Profitability and Year over Year

When asked if they had a profitable fourth quarter, 81.5 percent distributors responded with a resounding yes. All of this is indeed a sign of a turnaround.

Also encouraging were the answers we received when we asked distributors to look at total 2011 promotional product sales with that of total sales in 2010. Distributors reported an average increase of 6.67 percent and a median increase of 7.00 percent (i.e. 50 percent saw an increase of 7 percent or more and 50 percent saw less than that). A solid 70.41 percent reported that they saw an increase, while 27 percent saw a decrease and 2.59 percent saw no change. Note that the respondent make-up consisted of 85.2 percent of members and 14.8 percent of nonmembers.

Fifty-three percent of distributors reported an increase in the number of units shipped for the fourth quarter over the same period in 2010. Fifty-one percent reported seeing an increase in number of orders written and 41 percent saw an increase in average order size. These numbers were almost identical to third quarter results. More importantly, 53 percent of distributors saw an increase in profits for this quarter compared to the fourth quarter in 2010.  Number of employees on payroll held steady with 65 percent reporting that there was no change compared to the same time in the previous year. Also holding fairly steady compared to the same time last year were G&A and Marketing and Advertising Expenses with 67 percent and 62 percent of distributors reporting that there was no change since 2010. These are signs that distributors increased profitability by keeping their expenses to the minimum.

Outlook for Q1 2012

So what is the outlook for the next quarter?  Fifty-eight percent predict an increase in sales for the first quarter of 2012. Distributors report breaking into new segments, more orders in the pipeline in late December, new clients and a steady trend in increased business. Most are optimistic after seeing continuous growth in the last four quarters.  Only 11.5 percent predict a decrease in sales for the first quarter of 2012. For distributors, 30.4 percent predict that the first quarter of 2012 will be about the same as the last quarter of 2011.

Distributor Concerns

For seventy-four percent of distributors, the immediate threat on their mind is the economy. For 69 percent it is the client’s budget that they worry about. Restricted spending on the part of buyers, plus the fact that they want a lower unit cost and reduced quantities are of top concern to distributors.  “Other” concerns voiced by distributors are increased competition from the internet and big box retailers.

Overall, most distributors seemed to think that conditions are improving and they look forward to a busy first quarter in 2012.

PPAI Supplier Quarterly Sales Barometer – 4th Quarter 2011 – PREVIEW

As a subscriber to this blog I am providing you with a preview of the PPAI Supplier Quarterly Sales Barometer – 4th Quarter 2011.  If you have any questions about this or any PPAI research, please contact Saritha Kuruvilla at sarithak@ppa.org or 972-258-3043. Or, logon to the Research section of the PPAI website.   

A survey of a sample of promotional product suppliers, both members and nonmembers, revealed growth of 5.04 percent in the fourth quarter of 2011 over the same quarter in 2010. The median increase was 6 percent.

Fourth Quarter Results

Fourth quarter results were slightly higher than the third quarter performance that showed a median increase of 5 percent. The good news is that almost six out of ten suppliers (58 percent) reported meeting their sales targets for the fourth quarter of 2011. Those not meeting sales targets reported that they were down significantly from 2010 and that the fourth quarter simply fell off the map. Some reported that some of their very large orders were not repeated in 2011.  For others the fourth quarter, business just simply dried up.  Still, when we take a close look at the fourth quarter performance, it showed that 68 percent of suppliers saw an increase in sales, 4 percent stayed about the same and 28 percent saw a drop in sales in the fourth quarter compared to the fourth quarter in 2010.

Profitability

When it came to profitability in the fourth quarter, 80.6 percent of suppliers stated it was a profitable fourth quarter.  Some of them cited higher gross margins and others said it was due to seasonal business. However, when looking at other indicators, we find a pattern that shows that it may not be just seasonal business because six out of ten suppliers reported an increase in units shipped, five out of ten suppliers saw an increase on number of orders written and 46 percent saw an increase in profits. G&A and advertising and marketing expenses remained the same.

Year over Year

While suppliers were up 5.04 percent for the quarter over last year, it was still better news when looking at the entire year. Looking at year-to-year comparisons, suppliers reported an average increase of 7.20 percent. The median increase reported was 7 percent. When looking at the distribution of numbers reported, we find that 76.7 percent of suppliers reported an increase for the year, 2.33 percent stayed the same and 20.93 percent saw a decrease.

So what is the outlook for the first quarter of 2012 in comparison to the last quarter of 2011?

Fifty-four percent predict that they will see an increase, 21 percent anticipate they will see a decrease and 25 percent think it will be about the same. With more than half of the suppliers predicting an increase for the first quarter, we find that their reasons for optimism are many. Some see a trend in upward movement of sales, while others took in hefty orders and pre-bookings in December for the first quarter. Still others have expanded their product lines and shored up their marketing plans for the year and hope to reap the benefits in the first quarter.

Supplier Concerns

The economic climate remains the main concern for 72 percent of suppliers. However, this figure is down from the 84 percent that were concerned about the economy in the last quarter.  Raw material costs continue to plague suppliers with 54 percent of them citing this as major competitive threat.  Forty percent of suppliers worry about lower cost competitors and approximately 35-36 percent of them have concerns about increases in overseas product costs and shipping and handling costs.

Other concerns voiced by suppliers were those about distributors going direct, internet sources and slow paying or delinquent customers.

A Million Dollar Birthday Gift

Thanks to Sara Besley, PPEF Foundation Manager, for her contribution to this post.

In 1978, the employees of the Walter W. Cribbins Company had a simple idea. They wanted to honor their boss, Carl Rosenfeld, by establishing an educational fund in his name. That simple birthday gift resulted in $10,000 in contributions dedicated to educational purposes. In order to ensure the continuation of the fund, Mr. Rosenfeld wisely contributed the fund to SAAI (the predecessor to PPAI) and the promotional products industry’s Education Foundation was born.

The first Four-Year college scholarships were awarded in 1989 under the guidance of the CAS/MAS Alumni Association. That year, six recipients were awarded $2,000 scholarships with $500 payments to be received for four years.

Flash forward to 2012 as the Promotional Products Education Foundation will go over the $1 million mark in cumulative scholarship awards when this year’s scholarships are announced in May. For more information about the $100,000 to be awarded this year, visit www.ppef.us before the March 15th deadline.

I’m guessing that Carl Rosenfeld would be amazed at this news. I’m sure that many of the thousands of people who have supported PPEF with donations over the years are also amazed, thrilled and proud! I know I am. Whether you have bought a raffle ticket, participated in a golf event, joined the Century Club or contributed to the Tomorrow Fund, YOU have made a difference to the industry and its families.

This brings to mind the following quote by Margaret Mead:  “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”