The market for promotional products just in Germany alone is worth around 3.5 bn. Euros – and has been for years. You would have thought that a dedicated marketplace would exist on the Internet by now. But that is not the case.
So, there are still business sectors in which digitalization is having difficulty catching on, or put another way, markets that are making heavy weather of digitalization. I have spoken with two committed people, who are driving a project for this specific market forward, that serves as a model for others. This project involves the creation of the mypromo eCommerce system, a platform that enables promotional product distributors to handle orders in a fully automated process via a white-label store. One of the people behind this venture is Heike Lübeck, CEO of Mypromo Service GmbH, a Geiger-Notes AG subsidiary, since October 2018. She was previously Head of Marketing and Product Management at Geiger-Notes, and is now responsible for the marketing and development of the new networking platform for the promotional products industry. She shares this responsibility with Jürgen Geiger, Chairman of Geiger-Notes AG.
Bernd Zipper: Ripper, these promotional products! But will they still be needed in the future? Why analog promotional products, when the promotional and advertising community is increasingly focusing on digital?
Jürgen Geiger: Promotional products happen to be the best method of delivering that personal customer approach without wastage. That’s because they can be enjoyed using all your senses. They are the only form that appeals to all the senses and are not just ephemeral advertising, but provide the recipient with a benefit over a longer time period. That is the reason why promotional products have enjoyed such enduring success.
Bernd Zipper: But it is a very highly competitive market, isn’t it?
Jürgen Geiger: Indeed so, this market is just teeming with so many players – promotional product manufacturers and on the other side the marketers. And then there is a huge number of consultants, because promotional products are often incorporated into full-blown marketing campaigns. Furthermore, we have a distinctly diverse product environment ranging from food to garments and textiles, electronic items, paper products etc. A bit of market knowledge is therefore required to enable you to find the right promotional product that is fit for purpose.
Bernd Zipper: And then there are the critics that say that promotional products help to increase the amount of plastic trash and demand: “Hey, the whole thing should be made more sustainable”. Are there answers to this issue?
Jürgen Geiger: We have been encouraging our customers to use “Made in Germany” paper products for a long time now. They are per se sustainable, because they can be recycled, and do not need to be transported over really long distances. Although not all customers share that view, there has again been a noticeable trend towards “Back to Germany” or at least “Made in Europe” in the last few years, especially involving products that do not necessarily have to be sourced from the Far East. Obviously, there is no manufacturer market in Europe for USB sticks or other electronic items. But there is actually no reason why a notebook has to be sourced from China.
Bernd Zipper: Notebook is a great cue. When I am searching for Geiger-Notes on the Internet, I inevitably come across sticky notes, notebooks and calendars/diaries. Will we still need calendars/diaries in this form in the future? And does this business still make commercial sense for Geiger-Notes as a producer of calendars/diaries?
Jürgen Geiger: We started producing calendars and diaries over thirty years ago, and nowadays they account for over 50 percent of our entire product range. Calendars and diaries as a proportion of the portfolio and calendar/diary sales even grew in 2017. What people generally understand by calendars/diaries – the classic appointments diary – is indeed no longer needed. It accounts for around 15 percent of our portfolio and is under considerable pressure. Yesterday diary, today Outlook, smartphone et al. But calendar/diary reality is different. The promotional calendar/diary is more alive than ever before. I mean organizational calendars that you hang on walls. They – and the advertising that goes with them – are always in view 365 days a year. Promotional calendars/diaries and notebooks continue to be some of the most popular promotional products, as far as advertising appeal and attracting attention are concerned. The fact that IT and high-tech businesses, of all companies, are reverting to classic notebooks instead of accompanying every meeting with an opened laptop is therefore neither a fairy tale nor a miracle.
Bernd Zipper: OK. But there are nevertheless initial attempts now to tackle the issue of digitalization. And you have come up with the idea of opening up a marketplace. Why on earth do we need a marketplace for promotional products?
Jürgen Geiger: Quite simply, because it doesn’t exist! Ours really is the first of its kind! The promotional products industry with its many small companies and diverse range of manufacturers is distinctly analog. The only thing that unites us is the application or intended purpose – the promotional product – otherwise every company does its own thing entirely. There are also no players that dominate the market, which is the case in many other business sectors. The “sluggishness” that our industry has exhibited in relation to digitalization has left the door wide open for non-industry players to enter the promotional products market. They are doing so increasingly successfully. Looking surprised has pretty much been the only reaction in our industry. I myself am on the Board of the “Gesamtverband der Werbeartikel-Wirtschaft”, the distributors’ and manufacturers’ association in Germany. My experiences within the association have demonstrated to me that an association is not able to handle the conceptual design, setting up and development of a marketplace. That requires entrepreneurial initiative – and I felt compelled to seize this initiative.
Bernd Zipper: And that’s why mypromo was established? How can you describe this in three or four sentences?
Heike Lübeck: What’s really new about mypromo is that a digital network is being extended across the entire industry. We are creating a platform that does not sell anything itself, but which digitally links manufacturers and distributors. That has not existed in this form to date. The idea of a marketplace is certainly not a new one, but we are now giving distributors the opportunity to reach out to their customers by digital means.
Bernd Zipper: Does anybody have to be asked twice, or is the understanding of what the platform is all about so great that it is readily accepted?
Heike Lübeck: Of course, we won’t be able to persuade every promotional products consultant. But there is a growing awareness of the fact that just selling the analog way has no future. The psychological stress that consultants, distributors and suppliers are under is also fostering the mypromo idea and the business model behind it. For instance, it enables a promotional products consultant to showcase products on a tablet. We regard it as really really important that the store also functions on mobile terminal devices.
Bernd Zipper: But that is an incredible investment – on the one hand setting up the marketplace and doing the marketing for it to ensure there is a critical mass and on the other hand tackling the issue of digitalization too – that’s quite some parcel you’ve to deliver.
Jürgen Geiger: That parcel has long since morphed into a large package! At the start of the project we were thinking in much smaller dimensions, but the whole thing is now taking on 40ft container proportions. To be perfectly honest, to start with we underestimated the investment of time, energy and money required. But acceptance in the industry has convinced us to say “we’ll manage it”. Our major advantage is that we as a mid-sized enterprise with Geiger-Notes to back us up are in a position to take the odd risk, which a start-up, which is entirely debt financed, would probably not be able to take. We are a part of the promotional products business and a thoroughly visible one at that – that increases mypromo’s credibility. That is entirely different compared to a wise guy from outside the industry, who thinks they need to develop something and then tell promotional product providers how it works. No, mypromo is a product of the industry for the industry.
The promotional products industry is showing how it should be done – it doesn’t always have to be biros, it can also be food, garments, electronics and, yes, paper products. Even print providers should give this some thought. That’s because print departed from the two-dimensional height times width formula long ago. And it’s not just paper and cardboard that can be printed on, but anything that doesn’t have a pulse. – Bernd Zipper
Bernd Zipper: You have now been occupied with mypromo for 18 months, from the initial idea to getting it up and running – what lessons have you learned?
Heike Lübeck: The biggest learning was how many partners and components you need to bring together. We consider it vital that mypromo turns out to be really good. There are enough inchoate, half-baked and badly thought-out solutions out there in the market. mypromo in contrast aspires to excellence. That also means that we have virtually selected the market leader in each segment for every component that mypromo covers, ranging from eCommerce system via payment system to print data checking. Technically speaking, marrying these components together and communicating to all those involved what we actually want and what objectives we want to achieve was the most challenging aspect. Planting that in everybody’s mind was definitely a challenge.
Jürgen Geiger: What did I learn? That everything turned out completely differently to what I thought. Operating a marketplace of this kind means you are a focus of attention even from competitors and people that don’t like the idea at all. But we have a trusted advisor and we listened to him and the result is definitely not too shabby.
Bernd Zipper: A project of this kind has an external impact, but of course as internal one as well. Do you sense any effects on your employees? Is it enthusiasm or rather rejection along the lines of ‘they’re doing something online now, so we’ll be history soon’?
Jürgen Geiger: Both. But it’s less about the employees being concerned about losing their jobs, rather the notion that we are focusing more on projects of the future and a bit less on day-to-day concerns. Yes, that it so! On the other hand, the employees however also recognize that we are now playing a pioneering role, and not just in the paper advertising media segment. We are now on the path to becoming an innovation leader, as far as digital advertising media marketing is concerned. That of course is reason to be a bit proud.
Bernd Zipper: So, here’s the question again – will wall calendars exist in 20 years’ time? And do you believe that we will still need promotional media 50 years from now, or will everything be virtual by then?
Jürgen Geiger: Something entirely different is going to happen. Because so many things will become virtual, the haptic experience, i.e. what you can experience with the senses, will even gain in importance. Notebooks and biros will still be around in 50 years’ time. There will probably be completely new promotional products on the market that we don’t even dare to contemplate right now. For that reason, I am certain that the promotional product still has a very bright future as an advertising medium.
Heike Lübeck: Although nowadays we are already inundated with advertising messages. It’s becoming increasingly difficult to move into the spotlight. This “I don’t really know what I want to do, so I’ll do something with biros, because you can’t go wrong with biros” attitude will recede. Promotional products need to be utilized more consciously instead. They need to be geared much better to the target audience, to the intended purpose and to the communication experience to be associated with them.
Bernd Zipper: Then thank you for this informative chat and the best of luck with mypromo!
My take: The fact that advertisers invest 3.5 bn. Euros annually in promotional products and want to maintain or even increase their level of expenditure is pretty impressive. So, it’s high time there was a platform like mypromo. And you don’t really need to worry about the state of the promotional products industry if promotional products are popular with and used by the recipients and achieve the highest recall values of any means of communication. Those who should be worried are those who are not waking up to the fact that online print providers like Flyeralarm, Onlineprinters et al have spotted how attractive this market is and are really stepping on the gas. That’s because customizing industrially mass-produced products by putting a logo on them is unadulterated mass customization. But we only just looked at that last week (Custom-made from the production line).