Some news in from PPAI – Governor Jerry Brown of California has issued a Memo directing all California state agencies and departments to immediately stop purchasing “free giveaway and gift items—such as key chains, coffee mugs and squeeze toys”.   This is part of the States “continuing efforts to cut costs and tackle the state’s budget gap.”   Are other advertising mechanisms next?

This is not the first time we see blanket bans on promotional products.  Examples….

  • Govt. Imposed – One of the major industries which used Incentive Promos in the past was the Cigarette industry.  Smoking promos proved very popular in building Tobacco brands and encouraging smoking so this was phased out in most markets around the world given the health implications.
  • Self Imposed – More recently, Pharma companies in the USA phased out much of their promotional product spend.   Here, companies saw that they could not compete for market share if their competitors were using promotional products – a good example is the cluster/bandwaggon effect you can see on Contact Lens Solution/Beer Promos etc….   Industry grouped together to reduce costs by collectively deciding not to compete through promos.

In California, Promotional Products are targeted specifically, whereas other advertising is left untouched.   This is completely unfair and hopefully will not be copied by other Govt. agencies!  Given that Online, print and other adverts do not leave a residual utility benefit we feel this is a poor decision.

Case Study – Imagine an AIDS prevention campaign case study.  A Condom Case has utility and long term branding effect.   Compare this with a TV advert.   I tend to agree that mugs & pencils are maybe not so interesting, but custom or tailor made ODM Promotional Products can have a big impact.

The Specialty Advertising Association of California (SAAC), Promotional Marketing Association of Northern California (PMANC) and Promotional Products Association International (PPAI) will reach out to the Governor and state legislators to remind them that while a prohibition on the purchase of promotional products may yield some short term savings, in the long term, this prohibition may unintentionally diminish the good work of those agencies.

If state agencies cannot use promotional products, individuals and businesses may not utilize the state government’s services to the extent they could, or be as informed about their rights and responsibilities under state laws and regulations.

Good luck to our partners in California getting around this Memo..