Promotional Products in Canada Industry Report-2017

Canada in Promotional Products

Industry Report

MAY 2017

Industry Report

Promotional Products in Canada

2 About this Industry

2 Industry Definition 2 Main Activities 2 Similar Industries 2 Additional Resources

3 Industry at a Glance

4 Industry Performance

4 Executive Summary 4 Key External Drivers 6 Current Performance 8 Industry Outlook 10 Industry Life Cycle

12 Products & Markets

12 Supply Chain 12 Products & Services 14 Demand Determinants 14 Major Markets

16 International Trade 17 Business Locations

19 Competitive Landscape

19 Market Share Concentration 19 Key Success Factors 19 Cost Structure Benchmarks 21 Basis of Competition 22 Barriers to Entry 22 Industry Globalization

23 Operating Conditions

23 Capital Intensity 24 Technology & Systems 25 Revenue Volatility 25 Regulation & Policy 26 Industry Assistance

27 Key Statistics

27 Industry Data 27 Annual Change 27 Key Ratios

29 Jargon & Glossary

ibisworld.ca | 1-800-330-3772 | info@ibisworld.ca

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About this Industry

Promotional Products in Canada May 2017 2

Industry Definition

Operators in this industry provide promotional products, such as key chains,

of advertising-related services, including promotional product distribution, sign lettering and window dressing. This

industry does not include advertising services, public relations services, media buying services, media representation services, display advertising services, direct-mail advertising services or marketing consulting services.

Main Activities

The primary activities of this industry are Advertising specialty (e.g. keychain, magnet and pen) distribution services (except direct mail) Merchandise demonstration services Display lettering services Sign lettering and painting services

The major products and services in this industry are Desk and office accessories Wearables Writing instruments Drinkware, housewares and other home products Other items and services

Similar Industries

Advertising Agencies in Canada Establishments in this industry create advertising campaigns and place them in print or electronic media.

Public Relations Firms in Canada Establishments in this industry design and implement public relations campaigns.

Billboard & Outdoor Advertising in Canada Establishments in this industry provide outdoor display advertising services.

Direct Mail Advertising in Canada Establishments in this industry provide direct mail advertising services.

Additional Resources

For additional information on this industry Advertising Specialty Institute

Promotional Product Professionals of Canada

Promotional Products Association International

psi- The International Network of the Promotional Product Industry

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Industry at a Glance

Promotional Products in 2017

Promotional Products in Canada May 2017 3

Key Statistics Snapshot

Revenue

$1.8bn

Profit

$177.0m

Annual Growth 12-17

2.3%

Wages

$478.4m

Annual Growth 17-22

1.5%

Businesses

4,516

Market Share

There are no major players in this industry

p. 23

Key External Drivers Total advertising expenditure Number of businesses Corporate profit Demand from retail trade

% change $ trillion

Revenue vs. employment growth

10

5

0

-5

-10

-15 Year 09 11 13 15 17 19 21 23

Revenue

Employment

Products and services segmentation (2017)

8.3%

Writing instruments

13.3%

Desk and office accessories

Total advertising expenditure

17 16 15 14 13 Year 08 10 12 14 16 18 20 22

SOURCE: IBISWORLD

39.1% Wearables

14.3%

Drinkware, housewares and other home products

p. 4

25.0%

Other items and services

Industry Structure

Life Cycle Stage Revenue Volatility Capital Intensity Industry Assistance Concentration Level

Mature Low Low Low Low

Regulation Level Technology Change Barriers to Entry Industry Globalization Competition Level

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 28

SOURCE: IBISWORLD

Medium Low Low Low High

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Promotional Products in Canada May 2017 4

Industry Performance

Executive Summary | Key External Drivers | Current Performance Industry Outlook | Life Cycle Stage

Executive Summary

The Promotional Products industry generates revenue through the distribution of specialty advertising on everyday items, such as mugs, magnets, calendars and t-shirts. Industry operators do not manufacture these products, but imprint and distribute a client's advertising message on "blanks" purchased from manufacturers and industry suppliers.

Rising consumer spending and wider

processing have made it easier for clients to go directly to manufacturers, bypassing industry operators altogether. In addition, consumer safety laws, such as the Canadian Consumer Product Safety Act of 2011, have increased compliance and insurance costs for industry operators, as all promotional products, including pens, key chains and jewellery, must be free of health and safety dangers.

boosted advertising budgets over the past

this industry's services. Additionally, an

Growth has been constrained by rising external competition, especially from online sources

increase in the total number of Canadian businesses expanded the industry's

commonly use promotional products to market their businesses, products and services. Due to these positive factors, Promotional Products industry revenue is expected to increase modestly at an annualized rate of 2.3% to $1.8 billion

2.2% projected growth in 2017 alone. Nevertheless, industry revenue growth

has been tempered by rising external

Online cataloguing, ordering and

Promotional Products industry will continue to face strong external competition, which includes a continued increase in corporate expenditures on substitute forms of advertising, such as internet, mobile and email marketing.

a move toward integrated advertising campaigns, whereby promotional products are used in conjunction with other forms of advertising as part of a coordinated marketing campaign. Companies will continue to favour

the advantage of repeated, tangible exposure and potential brand name recognition. Furthermore, steady growth in corporate profit and total advertising expenditure will boost industry demand during this period. Consequently, industry revenue is expected to increase an annualized 1.5% to $1.9 billion over the five years to 2022.

Key External Drivers

Total advertising expenditure

Changes in media advertising and other promotional expenditure directly affect this industry. An increase in advertising expenditure and marketing budgets will have a positive effect on industry performance. Total advertising expenditure is expected to increase in 2017.

Number of businesses

An increase in the number of businesses nationwide adds to the industry's pool of potential customers, as promotional products are an outlet for advertising and brand awareness for many new businesses. Consequently, a rise in the total number of Canadian businesses generally leads to an increase in industry

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