2. Today’s Discussion Informal Discussion Regarding: – Size and Scope of Industry – The Power of Promotional Products – Promotional Products Awareness and Usage Study – Creating Value and Differentiation Product Safety PPAI Benefits and Ways to Use Them

3. Who is PPAI 10,700 members 6 dues-paying categories $15,000 – $400,000,000 1 – 1,000 of workers Varied go-to-market strategies 28 decorating/imprinting methods Make, decorate or sell or help make, decorate or sell Visibility Viability Credibility Community

4. The Trends Industry growth –Good news | bad news –3 years growth –2010 = $16.5 billion –2011 = $17.7 billion –2012 = $18.5 billion –23,096 distributor companies 96% at $9 billion 4% at $9 billion

5. 2011 Supplier Revenue 76% report less than $1 million –49% less than $250,000 –26% between $250k – $1 million –20 % between $1 – $10 million –Only 5% more than $10 million –96% of all supplier members report less than $15 million dollars –4% report 38% of the industry revenue

6. 2011 Distributor Revenue 91% report less than $1 million –81% less than $250,000 –14% between $250k – $1 million –4 % between $1 – $10 million –Only 1% report more than $10 million

7. The Trends Products –Wearables rule 29% –Bags 8.73% –Writing instruments 8.63% –Drinkware 7% –Calendars 3.5% –Computer products and accessories

8. The Trends Programs 1.Brand awareness (2) 2.New customer generation (1) 3.Trade shows (4) 4.Public Relations (3) 5.Dealer/distributor programs (8) 6.Employee relations/events (5) All between 12% - 9%

9. The Trends Top Buyers –Education: schools, seminars –Financial: banks, brokers –Not for profit: charities, churches –Healthcare: hospitals, clinics –Construction: building trades

10. Other Media Promotional Products Work! –Growing faster than 11 of 14 other competitive media Cable TV Mobile Phone Internet

11. Media Method20112012% Chg Direct Mail50.051.12.2 Television45.249.710.0 Newspaper20.718.9-8.5 Internet31.736.615.0 Point-of-Purchase*28.530.57.0 Cable TV23.524.43.4 Consumer Magazines21.721.1-2.9 Promotional Products17.718.54.4 Radio14.114.31.5 Sports Marketing12.213.06.0 Business Magazines7.97.6-4.8 Billboards6.46.74.6 Product Placement4.34.811.4 Mobile Phone Advertising1.63.4111.0 Total304.3320.311.9 * Estimated

12. PPW! Week 2014 - April 21 – 25

13. The Power of Promotional Products 2012 ‘airport’ intercept study –Follow-up to 1992, 1999, 2004 –Adult travelers at LaGuardia –Own one promotional product received in past 12 months

14. The Power of Promotional Products 2012 ‘Airport’ Intercept Study –Promotional Product Recall Types and number of promotional products recalled –Promotional Products Usage Number of promotional products owned Why, how long and where and how often –Relationship to Advertiser & Business Impact How are promotional product received Impressions about advertisers before and after receipt of promotional products

15. Frequency of Use 53% use promotional products once a week or more often

16. Length of Use 60% keep promotional products for up to two years

17. Where They’re Kept One in four walk around with a promotional product on or with themselves

18. Frequently Used 35% have referred to promotional products for contact information This is in addition to 100% Brand Awareness

19. Impact on Perception 59% had a more favorable impression of the advertiser after receiving a promotional item 22% Significantly More Favorable 37% Somewhat More Favorable 37% Neutral 1% Somewhat Less Favorable 0.4% Significantly Less Favorable

20. Business Impact 55% Had done business with the advertiser BEFORE receiving promo item 55% Had done business with the advertiser BEFORE receiving promo item 45% Had NOT done business with the advertiser BEFORE receiving promo item 45% Had NOT done business with the advertiser BEFORE receiving promo item 85% Have done business with the advertiser AFTER receiving promo item 85% Have done business with the advertiser AFTER receiving promo item 11% Have done business with the advertiser AFTER receiving promo item 11% Have done business with the advertiser AFTER receiving promo item of these of these Promotional products have a positive correlation with customer retention and acquisition

21. Value vs. Price Control the conversation –Price should only be the deciding factor when risk is equal to ZERO Program design Effectiveness Safety Delivery Product quality

22. 1.Preparation: Do your homework. They resent questions that can easily be found on the web 2.Simplicity: Make buying simple without being simplistic 3.Creativity: They have their own ideas. They want new ideas that don’t exist in their world 4.Loyalty: They risk their companies by doing business with you. They want you vested in success 5.Accessibility: They want you to get back with them immediately 6.Accountability: The buck starts and stops with you Contrary to popular belief, customers are less interested in price than in these six things. B2B customers want the following six things from the people who sell to them:

23. Product Responsibility In the Promotional Products Supply Chain

24. This information is being furnished for educational and informational purposes only. The Promotional Products Association International makes no warranties or representations about specific dates, coverage or application. Consult with appropriate legal counsel about the specific application of the law to your business and products.

25. Why should you embrace product responsibility? We are in the brand protection business Compliance with Federal and state regulations is not optional It can be a strategic advantage and increase your value to your customer

26. When distributors become suppliers… A distributor who sources direct is considered a manufacturer A distributor uses a contract decorator would also be considered a manufacturer

27. “All substances are poisons—the difference is in the dose.” Paracelsus (1493-1541), a Swiss alchemist

28. 2007: Big problem with the dose

29. To protect the children and control the dose… In 2008, Congress passed the Consumer Product Safety Improvement Act (CPSIA)

30. Know the Basics of the CPSIA Mainly Pertains to Children’s Products Children Toys Child Care Articles

31. Know the Basics of the CPSIA All children’s products need third party testing for: – Lead in substrate – Lead in paint and surface coating

32. Know the Basics of the CPSIA For children’s toys and child care articles – Six phthalates regulated – Toy Safety Standard now mandatory

33. Know the Basics of the CPSIA A Children’s Product Certificate (CPC) is required for all children’s products and must be created by the manufacturer or importer

34. Know the Basics of the CPSIA Permanent Tracking Labels – Mandatory for all children’s products – Children’s apparel requires two if decoration done at different time or by a different vendor – Distributors responsible under CPSIA for same requirements and obligations as “manufacturer” if they purchase blank garments and have them imprinted.

35. Compliance beyond CPSIA Federal regulations: – FDA (particularly drinkware) California Proposition 65 State regulations – Cadmium – Packaging International standards And more…

36. Product Responsibility

42. No drawstrings on children’s upper outerwear! Other Considerations…

43. When you work with a contract decorator, you become a manufacturer – ask the right questions! Other Considerations…

44. Think before you include a picture of a child interacting with the item on your website or in your advertising Other Considerations…

45. Even if the item is a general use item, there may be regulations beyond CPSIA Other Considerations…

46. Resources PPAI: www.ppai.orgwww.ppai.org Product Safety powered by PPAI: http://www.ppai.org/inside- ppai/product-safety/ http://www.ppai.org/inside- ppai/product-safety/ Consumer Product Safety Commission: www.cpsc.gov; www.recalls.govwww.cpsc.gov www.recalls.gov PPAI contact: Anne Lardner- Stone, AnneL@ppai.orgAnneL@ppai.org

47. What We’re All About PPAI is the industry’s preeminent not-for-profit trade association Our focus is on the strength of suppliers and distributors, their interest, and the overall health of the industry Our goal is to help you grow your business, expand your knowledge, and provide you with the opportunities to be a part of the bigger picture

48. We’re About Growing Your Business PPAI Research - Distributor and Industry Sales PPAI Publications Professional Development and Certifications Industry Events Savings on Business Services

49. PPAI Research Industry Sales Information Business Practices within the Industry Buyers of Promotional Products Research Videos and Flyers You Can Use End-Buyer Initiatives at www.Promoideas.orgwww.Promoideas.org

50. PPAI Publications PPB Magazine – The Industry Magazine PPB Newslink – Weekly Electronic Newsletter Promotional Consultant Today – Daily Electronic Newsletter Geared for distributors PPAI Navigator – Digital Industry Directory including a Value Book of Supplier Coupons

51. PPAI Certification (at a glance) DesignationExperience Required Points Required Exam Required Recertification Required Designation Awarded TAS (Trained Advertising Specialist) <3 Years25NNCertificate of Completion CAS (Certified Advertising Specialist) =3+ Years75YYCertification MAS (Master Advertising Specialist) =5+ Years175YYCertification MAS+ (Master Advertising Specialist Plus =7+ Years225NNCertification

52. PPAI AllStar Lineup

53. More PPAI Events NALC–North American Leadership Conference Chicago, IL - August 11-13, 2013 PPAI Product Safety Summit Chicago, IL - August 14-15, 2013 WLC–Women’s Leadership Conference San Diego, CA - July 8-10, 2013

54. PPAI Business Partner Programs Spend less-Save More! Average distributor-savings of $3,200 per year! Visit www.ppai.org for a full listingwww.ppai.org Shipping Services Artwork Services Travel Services Healthcare Financial Services Office Services Marketing Services Product Testing

55. Power of Two – Power to You PPAI Members get a $495 credit to access SAGE Online and other SAGE products Best part…it’s every year! Not a PPAI member? Join today and receive a $495 credit to access SAGE Online or other SAGE products

56. Join PPAI Today, and Receive the SAGE Seminar Series Special 3 for Free Three months of your first year’s membership free Or 2 For 1 PPAI will pay for your first year’s membership with your Regional Association

57. Questions ?