• by Joe Mandese , April 17, 2006

U.S. ad spending may have trailed the growth in the U.S. national economy last year, but another form of marketing - promotional products - grew faster than the GDP, and that ad industry too. Spending on promotional products jumped 5.1 percent in 2005 to $17.8 billion in 2005, according to estimates released Friday by the Advertising Specialty Institute, a trade group representing major distributors and suppliers of promotional products - everything from apparel to pens and mugs emblazoned with corporate logos and brand messages. By comparison, U.S. ad spending rose only 4.6 percent, according to Universal McCann's estimates; and only 2.9 percent according to ZenithOptimedia's estimates, the two leading chroniclers of ad spending on Madison Avenue.

Promotional products are only one component of an even larger consumer and trade promotion industry, which periodically vies with conventional advertising for share of marketing budgets. Based on ASI's new data, promotional product spending in the U.S. is now greater than cable TV ad spending, is twice as large as Internet display advertising and five times greater than outdoor advertising outlays. That comparison was drawn with TNS Media Intelligence's most recent 2005 ad spending estimates for those fast-growing media.

According to ASI, 2005 was the second consecutive year of record ad spending by promotional products marketers, and the third year of growth since the sector ebbed in 2002, following an overall marketing recession in 2001.