Certain marketing tactics are controversial.  Some are not.  Putting your firm’s logo on a gift or other promotional item falls into the latter category.  Here’s research on the effectiveness of and trends in the use of “schwag.”

A study conducted by the Advertising Specialty Institute (ASI), which admittedly has a dog in the fight, claims that promotional products have a favorable return on investment with a low cost per impression and high recall among recipients.

“… Interviewers surveyed 465 business people in New York, Chicago, Los Angeles and Philadelphia on behalf of ASI regarding promotional products they had received. The purpose of the interviews was to understand how advertising specialties influence end-users’ purchasing decisions; determine the number of impressions of popular advertising specialties; and analyze the Cost Per Impression (CPI) of advertising specialties compared with other popular advertising media.

“An online panel survey was conducted among recipients of advertising specialties to augment the non-wearables sample from the in-person interviews. There were 213 completed Web based interviews, for a total of 618 completed surveys for this study.

“Respondents were asked if they had received any promotional products in the last 12 months.  Most respondents were business/professional people (84%) and all were age 21 or older.

“Summary of Conclusions:

• Instant recall: More than 8 out of 10 (84%) respondents remembered the advertisers of the promotional products they’re received.
• Impressionable: 42% of respondents had a MORE favorable impression of an advertiser after receiving the item. And nearly a quarter (24%) said they are MORE likely to do business with the advertiser on the items they receive.
• It’s all business: Most respondents (62%) have done business with the advertiser on a promotional product after receiving the item.
• Pens are in: Writing instruments are the most-recalled advertising specialty items (54% of respondents recall owning them), followed by shirts, caps and bags.
• User-friendly: The majority (81%) of promotional products were kept because they were considered useful.
• Staying power: More than three-quarters of respondents have had their items for more than 6 months.
• Bag it!: Among wearables, bags were reported to be used most frequently with respondents indicating that they used their bags an average of 9 times per month. They also deliver the most impressions: Each bag averages 1,038 impressions per month.
• Most impressive: The average CPI of an advertising specialty item is $0.004; as a result, marketers get a more favorable return on investment from advertising specialties than nearly any other popular advertising media.”
• Most other reports we’ve been able to find support ASI’s conclusions.  One says: “Large corporations have known for a long time the benefits of giving gifts to their clients. Although their gifts are quite a bit more expensive than what the small business owner can offer, the message is still the same. They appreciate the business and loyalty they receive from their customers and this is their way of saying ‘thank you’.”

Another: “The use of promotional products has grown into a huge industry over the years, and when you use them to advertise your business, you know you are using a time-tested, proven method of promotion. When you give items to your customers that have your company logo and information on them, they will be using them and promoting your business on a daily basis at a much lower price than advertising in newspapers, magazines, television and radio.”

In a presentation we do on marketing and ethics during the holidays, we cite other research about the role of gift giving.

• “A fundamental form of communication.  Exchanged between members of tribes, business acquaintances or heads of state, gifts are tokens of status, respect and appreciation.”  Handler in Psychology Today.
• “They create and cement alliances, allegiances and partnerships.” Cialdini, The Psychology of Persuasion

We recommend all firms keep a stable of gifts available at all times to recognize referrals and retentions.  You should also keep a list of to whom each gift is given to avoid giving the same gift twice.