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Scapegoats Of Spending Scrutiny
By: Jen Alexander McCall
Issue: June 2010

When budget decisions go under the microscope, how can we show end users that promotional products aren’t the bad guy?

Corporate America has taken a hard hit to its collective image in the the past couple years, and in light of the bankruptcies, bailouts and job cuts, the public has increasingly scrutinized how the powers-that-be spend their money—including through advertising and marketing budgets.

The criticism is evident in news stories splashed across papers nationwide: a fire chief steps down after his purchase of promotional products is deemed excessive and useless; the U.S. Census Bureau is questioned for its use of foreign-made products to promote a domestic effort, and a city’s spending on promotional calendars comes under fire.

How can a promotional consultant fight the perception that products are a waste of money? Is it a never-ending battle, or are there ways to successfully and profitably show end users and their critics that promotional products have a tangible, measurable value?

Teri Ray, MAS, president of Houston-Texas based distributor AdPrint International, Inc. (UPIC: adprint) and Joseph G. Scott, MAS, vice president of Scott & Associates, Inc., Chanhassen, Minnesota-based distributor, Scott & Associates, Inc., (UPIC: SCOTTASC), have both helped educate the public about the value of promotional products through their work with PPAI’s Regional ADvocate program. Promotional Consultant magazine asked them what they would have done to prevent some real-life spending snafus, and they also gave us their top tools for showing clients that promotional product are an invaluable investment.

MUNICIPAL SPENDING
PC: Sioux Falls, South Dakota, is facing budget shortfalls, and critics of the city's administration say their decision to spend more than $37,000 on promotional calendars in the past two years is irresponsible in light of economic conditions. Additionally, an engineering firm's purchase of 500 construction cone-shaped stress balls for the city, at a cost of $600, has been questioned. If you were the promotional consultant helping either the city or the engineering firm select these types of promotional products, what would--or could--you do to help your clients avoid or counter this type of criticism?

Teri Ray: If I were the promotional consultant for the city, I would suggest an educational focus for the calendar that could include community events, city safety issues, department phone numbers or some other useful information. Or it could go to a more personal level and include home and gardening tips or pet tips. The recipients will quickly develop an attachment to the calendar if it has a purpose beyond just the date. A gift like a calendar is an inexpensive way to help the city develop a relationship with its people and create a positive feeling.

A calendar will be displayed for at least 12 months and looked at many times during each day, making the cost per impression approximately $0.002. This is one of the least expensive advertising methods that creates a positive impact at the same time. The city can create good will, save money on advertising and provide a useful item.

The engineering company could use the same concept with the stress reliever. If an educational focus is used on the imprint, then it is not just a giveaway item. If it has a safety message or reminder, or if it has a 24-hour emergency contact number on it, then it is a useful tool that is soft and rubber but has a purpose.

A gift of this size is very inexpensive compared to the good will it will create and the number of people it will reach for $1.20 per person. A flyer or printed document will get thrown away, but an interesting piece like a stress reliever will stay around for years. And they are viral—they will get passed around, so more than 500 people could come into contact with this advertising message. In addition, the engineering company is able to target the specific people they want to reach so their advertising dollars are not wasted.

GOVERNMENT SPENDING
PC: The U.S. Census Bureau spent millions of dollars this year on promotional products to educate residents about the Census. Besides the issue of cost (the Census’ total advertising budget was more than $300 million), there has been criticism that the products aren’t made in the United States. If you were working with the Census Bureau, how would you—or could you—prevent these two major criticisms?

Joe Scott: First, I would offer an explanation of how expensive it is to send an interviewer to a residence when Census forms aren’t returned by mail. (According to Rich Gerdes, assistant regional census manager, it costs $25.)

The letters the Census Bureau sent in advance of the survey increased Census form returns by six percent (7.56 million = 126 million US households x 6 percent). If an interviewer is sent to these households to follow up, it will cost $189 million (7.56 million households x $25).

What the Census Bureau should have done was to include a U.S.-made refrigerator magnet in with the mailing. If the response rate had increased to 12 percent, they could have saved another $189 million.

VALUE OF PROMOTIONAL PRODUCTS
PC: If you have a client who wants to purchase promotional products for a campaign or project but is unsure how to justify this purchase, what three sales/educational tools would you use to help them understand and communicate the value and ROI of promotional products?

Teri Ray: To justify the purchase of promotional products, the tools that could be used are statistics and studies done by PPAI, case studies from my own experience and creative ideas that are unique and different that will help the client stand out from the crowd.

Statistics and studies done by PPAI are on their website and easily accessible. Case histories from my own experience would include the ones where we were able to measure the results and where the client was able to achieve their objective.

The creative ideas are going to be different for each client, but the ideas include helping the client achieve a specific objective, the cost per impression and a way to measure the results. It could also include a way to use promotional products to enhance the other forms of advertising or promotion the client is using. It requires getting to know as much about the client as possible and showing how to achieve results and save money by using promotional products.

MEASURABLE ROI
PC: Oftentimes, the end user making the purchasing decision must convince someone else that promotional products are a necessary component of the project or campaign they are working on. What sales/educational tools do you provide end users who need to show that promotional products have value and measurable ROI?

Joe Scott: No one is better at convincing people as to the power of promotional products than we (promotional consultants) are—the issue is the level at which the contact is made. If we present promotional products as an advertising medium and compare the effectiveness in terms of number of impressions (CPI), our medium compares favorably with any other advertising expenditure.

We have to ask our clients how much they are spending on advertising and show them a better way. We only use one tool: Our OAR/MTV process:

Outcome: What does the client want to achieve?
Analysis: What will the outcome mean to their bottom line?
ROI: What are they willing to invest to generate the outcome?
Message: What do you want people to know about your product/service?
Target: Who do you want to get the message?
Vehicle: Promotional products

Jennifer Alexander McCall is a freelance writer based in Hinesville, Georgia. She is a former associate editor for PPB magazine.