In this time of coronavirus disruption, if work-from-home-setups, virtual conferences and Zoom happy hours weren’t confirmation enough that we’re living in the digital age, there’s this piece of news: According to eMarketer, in 2019 digital advertising outpaced traditional ad spend for the first time. The research provider reported that total digital ad spending in the U.S. grew 19.2% to $132.18 billion, or nearly 55% of total U.S. ad spending for the period. Our total reliance on digital technology to communicate with friends, family members, coworkers and clients has certainly accelerated the audience for digital advertising. But even after we’re all finished quarantining and social distancing, digital advertising is still poised to rise dramatically, by a total of almost 80% in the next three years.

“Getting the right message to the right person is key,” says Azher Ahmed, EVP and chief digital officer of DDB U.S., a global ad agency based in New York. “People are connecting with technology more and more, and most advertisers are simply following the flock. Digital media consumption is on the rise and we are a byproduct of that.”

“Across the board, more people are advertising through means of digital marketing,” says Angela Chryplewicz, CEO of Lasting Impressions Promotional Marketing (asi/249926), which offers digital marketing services to clients in addition to promotional products.

And it’s no secret what’s driving the biggest gains in digital ad spend: mobile. It accounts for over two-thirds of total revenues, reports eMarketer. “Mobile use continues to take over as desktop traffic drops each year,” Chryplewicz says. “People are constantly on their phones, scrolling through Instagram, Twitter and other social media with valuable ad space while they’re watching TV, waiting in line at the doctor’s office and throughout the day.”

“Everyone has a mobile device; the majority of searches across the board on are on mobile devices,” says Matt Erickson, marketing director of digital marketing firm National Positions. “And every device is like a thumbprint of its owner; it’s an opportunity to push targeted advertising via push notifications, pay-per-click (PPC), YouTube and audio and video streaming services.”

The growth in digital advertising has caused a decline in spending on traditional advertising; eMarketer reported a decrease of 4.5% in 2019 from 2018 for traditional media (comprised of TV, radio, print publications and directories). And while COVID-19 disruption has caused a 33% drop in digital ad spending booked for March-June, according to the Interactive Advertising Bureau, traditional media is being hit harder, with a 39% decrease.

As digital advertising grows and traditional drops, where does that leave the promotional products industry, which grew 20% from 2014-2019? The coronavirus notwithstanding, will the continued growth of digital advertising over the next few years affect clients’ promotional spend?

Why Digital?
Grapevine Designs (asi/212829) started in 2000, and has always offered a full-service suite of solutions, from promo products to creative design to kitting and packaging. Eight years ago, the distributor began pursuing a lucrative vertical market, and the effort proved so successful that, a few years later, Grapevine launched its own in-house advertising agency. Digital has been an essential and growing component for the inside agency.

“If companies don’t have a digital strategy, they’re missing out,” says Holly Robertson, who is director of agency services for the distributor and oversees a staff that’s grown from one to about 30. “It’s a cost-effective advertising medium – it has to be part of your marketing mix.” She says offering digital media services allows the company to sit down with the decision-makers and lead strategy conversations.

Grapevine isn’t the only distributor to see opportunity in the digital realm. Outreach Promotional Solutions (asi/396790) introduced Elevate, its data-driven digital marketing solution, two years ago. “Digital is front and center for most people, plus my passion is in helping build and execute marketing strategies,” says President and CEO Nevin Bansal, whose distributorship is based in Columbus, OH.

“In the past, we had been thought of as merely a product company, but we were looking to expand to a more holistic entity. We’ve been putting emphasis on creative and digital offerings,” says Bansal. “Most of our clients are investing in digital marketing.”

At Lasting Impressions, the Southfield, MI-based distributor has been offering email marketing for 15 years as well as SEO optimization and PPC for the past five. “The digital space is growing with our client base, and not just for the promotional industry,” says Chryplewicz. “We can also work with clients to find further tie-ins into digital campaigns.” The e-commerce space is also robust, she notes.

Why is digital advertising proving so popular? Beyond the fact that consumers spend so much time on their digital devices, there’s this fact: “Digital advertising allows for a data-driven approach to marketing,” says Jonathan Chan, head of marketing of Melbourne, Australia-based business coaching agency Insane Growth. “You can track everything from the amount of impressions a post gets to the number of conversions and sales it ultimately creates for your business. It gives marketers the ability to manage their marketing campaigns down to a micro-level and adjust accordingly.”

As Chryplewicz says, “You can track return on investment (ROI); you know what you’re putting into it and what you’re getting out. It helps identify what’s working and what’s not.”

That appeals to many of Grapevine’s agency clients who are direct response-focused because they can see an immediate ROI, says Robertson. She also notes brand awareness and direct-response strategies work well in tandem. “Apps are great for targeting specific audiences and offer valuable advertising space. We use the same strategy for mobile as we do with all media – they’re driven by outcome and audience,” Robertson explains. “If we target someone aged 70 versus 25, the media channel mix and messaging will be very different.”

Royal Oak, MI-based Premier Communications Group (asi/298496) has dedicated staff and resources to the digital space. “Our digital footprints are all unique but they exist, and there are many ways to follow those footprints; we can follow what people are searching for and their buying habits, and come up with language that speaks to that prospect,” says Mike Fossano, vice president of account services.

The company uses platforms such as Google Analytics, Search Console and other leading online marketing tech tools to continuously track and monitor how digital ads are working. “It helps us determine if our projects and campaigns are drawing in traffic, accurately tracking ROI and if we’re reaching a more targeted audience. It also helps us decide whether to pivot and shift ad dollars to a different area or stay the course,” says Fossano.

Potential Drawbacks
Digital advertising isn’t a magic bullet, and there are pitfalls to be aware of as more companies incorporate it as a marketing strategy. “Not every digital avenue is going to work across the board – brands need a marketing ad channel shoe that fits,” says National Positions’ Erickson. For example, a fashion line will benefit more from a video ad on YouTube than a cost-per-action, and B2B brands will likely find more success using pay-per-click than Facebook ads, he explains.

Fossano says digital may not be right for every client in all situations, but it can be effective when looking for a targeted audience.

“Digital advertising is a single tool – a powerful tool, but a tool nonetheless,” says Chan. As marketing becomes increasingly complex, it’s up to brands to understand where and when digital advertising best fits into their overall marketing strategy.

There’s also the specter of digital overload. “There’s a dilutive effect to digital as more platforms provide opportunities to get in front of more people,” says Terry McGuire, senior vice president, vendor relations and communication for HALO Branded Solutions (asi/356000). “It’s difficult to get your message to be seen and resonate with an individual because they’re bombarded with so many ads.”

An example? “Banner blindness,” which is when people don’t even notice the banner ads, as the digital ad space gets more crowded, says Gautham G. Vadakkepatt, assistant professor of marketing and director of retail innovation center, School of Business, George Mason University.

Digital advertising can often be quite affordable, but its lower cost per lead may not convert to a sale at the same rate as radio, TV or other traditional methods, according to Grapevine’s Robertson. “You pay more for a TV ad, for example, but the conversion rate could be higher,” she says. “Bottom line: You need a healthy, holistic mix of marketing tactics.”

Like any advertising medium, there’s more to digital advertising than just writing a message and dropping in an image, Erickson cautions. “Everyone’s in a race to use the next tool or technology without really wanting to put in the work,” he says. “If you go this route, you’re much more likely to blow your ad budget faster, and worse, not really know why.”

It’s also important to remember that adopting a digital strategy takes time. “Many clients can be impatient for quick results; they want to be on page one of Google’s landing page in a month,” says Chris Mackler, digital marketing specialist for Outreach Promotional Solutions. “People need to get to know you online, and if you haven’t done digital before, it’s going to take time, as other companies that have been at it a while will have a more visible online presence.”

Clicking on an ad is only one part of the solution. “If you click and land on a poorly designed website, you won’t get the business or the result you’re looking for,” Mackler says.

That click may not even matter. Click-thru rates (CTR) and Facebook likes are often regarded as “vanity” metrics that can be manipulated or be a false indicator of demand, Vadakkepatt notes. “It might be more effective,” he suggests, “to look further down the conversion funnel to see how many clicks actually end up purchasing the product.”

The Impact on Promo Spend
Robertson can end the suspense: While digital marketing continues to draw advertising dollars, there’s still a place for promotional products. “Branded merchandise yields high brand recall, it’s an excellent awareness tactic and can be used to help improve conversions if used as an incentive,” she says.

“It’s a rising tide – there’s room for both digital and promo,” says Fossano. “As revenues increase, there’s more opportunity for creative ideas.”

It’s a sentiment echoed not just by those who work in the promotional products industry. “There’s no denying that traditional marketing methods like direct mail, print ads and event marketing are still incredibly powerful channels for generating brand exposure and developing a positive relationship between the brand and the customer,” says Chan of digital marketing firm Insane Growth.

Chan notes “the ability to physically touch a branded item or participate in a brand-sponsored event, for example, cannot be replaced with digital marketing.” Successful marketers, he says, incorporate the best of both worlds and are able to create a seamless experience for their clients. “Customers want to be able to have a relationship with their brands of choice, one that goes beyond a simple transaction over a screen,” he says, “so we can definitely expect to see more brands exploring different strategies and tactics to connect with their customers offline.”

Lasting Impressions uses both traditional and digital marketing methods. “We do lean heavily on digital, but there’s definitely a place for traditional tools,” Chryplewicz says. “I think digital will increase more as buyers are getting younger. They’re constantly online, and that’s where you want to be.”

Plus, digital and promotional don’t have to exist in their own bubbles – distributors can find smart ways to integrate the two. Chryplewicz suggests a number of methods: industry products with built-in NFC technology; promotional items decorated with hashtags to allow a social campaign to gain traction; and even promo items in the tech category with digitally geared slogans. “You can use promotional items as the incentive to accomplish your digital campaign goal,” says Chryplewicz.

Grapevine’s Gaunce says the promo industry is getting better at integrating marketing tactics: “When we walk the trade show floors, we’re seeing different experiential merchandise and interesting products with NFC technology, 3-D holographic apps with back-end reporting, and traffic data-collecting devices coming into the marketplace.”

Although most of HALO Branded Solutions’ larger clients employ digital as part of their ad spending, “We haven’t seen a migration from promotional products spend to digital, as our products provide a longer lasting emotive response than digital can ever provide to an advertising recipient,” says McGuire.

Even though digital has replaced many traditional advertising vehicles, formats like print are far from dead. HALO offers both print and digital versions of its top marketing tools, and according to McGuire, the company’s print runs have increased in the past three years. “In our case,” he says, “digital seems to be increasing the demand for print with buyers who want a more comprehensive view of buying/product options.”

“Promo products are successful because they’re a powerful standalone medium, yet also enhance other forms of advertising, whether traditional or digital,” says McGuire, adding, “It’s not only possible to utilize both digital and dimensional advertising to add impact to your message, it should be recommended.” 

Jean Erickson is a contributing writer for Counselor.