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Changes in the advertising market

The advertising object market is both well structured and highly atomized.

Published on 01/10/2018

The advertising object market is both well structured and highly atomized.

In its structure, it is a distribution with 2 intermediaries plus the end customer:

  • Wholesalers/storers and factories
  • Distributors who are their customers
  • Advertisers or end customers who buy from distributors

Distributors are responsible for the final marketing of promotional items manufactured, imported and stored by factories and wholesalers.

In some cases (for about 3% of the market), the wholesaler also distributes the products. This is rare and is not the rule in this highly structured market where each level corresponds to a specific role and job. In an even smaller proportion (0.5% of the market), factories (very often Chinese) sell directly to advertisers.

The distributors are about 3000 in France and share a cake of one and a half billion euros of turnover.

Only about twenty players achieve more than 5 million in turnover and the market leader achieves 25 million; which remains quite low compared to the turnover of the sector. It is surprising that there are not one or two distributors who each achieve 5 or 10% market or between 75 and 150 million in turnover.

Talking to colleagues, we say that there are almost as many business models as there are promotional companies – at least for the top 20 of the list

Each with its own personality and specificities: some have very traditional sales models with itinerant salespeople and sample suitcases, others focus on key accounts and catalog management, some are distance selling specialists (VAD / VPC), others are very present on the web either via very complete online catalogs with tens of thousands of objects or with smaller selections customizable directly online. This comparison of advertising company gift companies can be enriched by the catalog of business gifts and goodies offered: Some are the subject of direct import with tailor-made manufacturing, others are already manufactured advertising objects to which a logo is affixed, others are part of an ecological industrial policy linked to sustainable development and CSR, Some are made in France and highlight the "made in France" label.

It is likely that the online trade in promotional items will continue to grow. It is even a natural phenomenon. The whole economy is digitizing. We must therefore prepare for changes in our business and automate everything that can be automated (quotes, models, BAT, purchase orders, etc.) while keeping a human eye for the control of graphic elements. The automation of personalization is only partially automatable. It seems irresponsible to launch a production without having humanly controlled the quality of the files provided and their positioning on the objects.

The digitalization of the advertising object will make it possible to significantly grow a market that excludes for the moment small B2B orders (between 100 and 450 €). The profitability of processing these orders is not obvious in a traditional sales model but becomes so in a digital model.

It is already possible on several websites, including Vcomlab.com, to make models online. We can perfectly imagine, in the not too distant future, that it will be possible to manufacture tailor-made goodies online in series, by industrializing the 3D printer process. It will also be possible to industrialize individual markings (name and surname for example) on advertising objects that have previously been personalized with a logo.

Benoît Vernon, founder of Vegea

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