Promotional Products in the US Industry Market Research Report from IBISWorld has Been Updated

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The industry will get a boost during the economic recovery, when improvements in corporate profit and sentiment are expected to create renewed demand for promotional products. In response to growing competition from low-cost manufacturers that deal directly with clients, operators will try to differentiate themselves by using greener materials in their products or by increasing their web presence to enhance client interaction. For these reasons, industry research firm IBISWorld has updated a report on the Promotional Products industry in its growing industry report collection.

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The industry has benefited from a move toward integrated advertising campaigns.

The Promotional Products industry has begun to turn the corner following the financial crisis, posting gains the past three years. In 2012, industry revenue is expected to increase 4.1% as marketing budgets expand and the industry benefits from promotions associated with the 2012 Olympics and presidential election. However, despite positive growth in four of the five years since 2007, IBISWorld estimates industry revenue will decline at an annualized rate of 0.8% to $13.2 billion as a result of a decline in media expenditure and the loss of a key downstream market. “In 2009, pharmaceutical companies introduced self-imposed rules prohibiting the distribution of noneducational promotional items, removing themselves as industry clients,” says IBISWorld industry analyst Anna Son. This loss, combined with decreased advertising dollars, drove revenue down 14.4% in 2009 as the pharmaceutical market had accounted for 11.0% of industry revenue.

The majority of industry revenue is generated through the distribution of specialty advertising products. Operators specializing in this service do not manufacture products; they purchase “blanks” from industry suppliers and customize them according to client needs. Unfortunately, industry globalization has made it easier for client to go directly to the manufacturers, skipping industry firms altogether. In addition, consumer safety laws, such as the Consumer Product Safety Improvement Act of 2008, have increased the cost of insurance and product testing. According to Son, these trends have caused the industry to experience some consolidation and pushed some firms out of business; industry enterprises have declined at an average annual rate of 0.6% to just more than 8,000 in the five years to 2012. Office-supply store Staples has became the industry's larger operator when it acquired American Identity in 2007 and Corporate Express in 2008. As businesses have begun to expand their advertising budgets, the industry has benefited from a move toward more integrated advertising campaigns. With audiences becoming more fragmented, clients are being forced to diversity their marketing efforts. In addition, promotional products expose a user to a brand or product name throughout their use, making them more cost effective than a magazine or television ad that may be only viewed once. Consequently, industry revenue is forecast to grow during the five years to 2017.

IBISWorld estimates that no firm in the Promotional Products industry holds great than a 3.0% market share. Furthermore the top four operators are estimated to represent just 9.2% of industry revenue, indicating this industry has a very low level of concentration. The industry consists of a large number of small, niche operators that focus services on local and regional markets. Consequently, more than 85.0% of industry firms have fewer than 10 employees and only 1.5% has more than 100. Recently, industry concentration has increased marginally due to some firms being acquired or leaving as a result of a poor operating environment. For example, Staples acquired American Identity and Corporate Express. For more information, visit IBISWorld’s Promotional Products in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in this industry provide promotional products, such as key chains, magnets and pens. They also provide a variety of advertising-related services, including promotional product distribution, sign lettering and window dressing. This industry does not include: advertising agency services, public relations agency services, media buying agency services, media representative services, display advertising services, direct mail advertising services and marketing consulting services.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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