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The ROI of quality swag


We've all got them: desk organizers filled with logo-inscribed pens, junk drawers overflowing with branded key chains and many other types of promotional items known as swag. Some of us seek out these goodies at tradeshows and other conferences, while others hope to avoid yet another industry gift.

Regardless of swag preferences, there is no denying it's big business. In fact, spending on business-to-business promotional marketing alone reached $44.76 billion in 2007, a jump of 4 percent over the previous year, according to PROMO magazine, which tracks promotional marketing.

But how do marketers at interactive companies figure out which types of swag will stick for their audience? The truth is, promotional marketing remains an unperfected art. But a few recent campaigns undertaken by tech businesses have achieved remarkable, measurable and sometimes astounding success.

As first reported in BtoB Magazine, online marketing company ValueClick turned a spur-of-the-moment  investment of $784 worth of cupcakes into hundreds of thousands of dollars of additional business. The cupcakes were part of ValueClick's 10-year anniversary celebration.

Tony Winders, ValueClick's vice president of marketing, says the company decided to celebrate its decade of business with emails to 30,000 clients and a print ad in April featuring a photo of a cupcake and a single lit candle under the heading "ValueClick turns 10."

Click to enlarge

Winders' sales teams originally planned to hand out cupcakes at the April ad:tech conference in San Francisco, but the company soon realized that idea wasn't workable within its budget. But the concept stuck with the San Francisco sales team, which, along with its cohorts in New York, Chicago and Los Angeles, struck out into their territories on the Monday preceding ad:tech to hand-deliver the baked goods -- topped with a single candle -- to key clients. (The cost of employee hours and transportation isn't included in the $784 number.)

Winders hadn't initially planned to track whether the cupcakes would lead to any deals, but on a whim, he created a "cupcake" field in Salesforce to see what popped up. He says he was surprised to realize the cupcakes led to eight deals totaling $214,250. His conclusion: "It was the thoughtfulness of being in somebody's office with food that prompted a conversation." 

Winders also struck green with the branded digital picture frames ValueClick distributed to approximately 200 clients as holiday gifts in December. That gift generated 12 deals totaling $251,222, or an ROI of well over 300 percent. But Winders says he doesn't think of gifts in terms of ROI. The main focus, he says, is on being creative and impressing his clients.

Rove Mobile, an enterprise software company that develops products for handheld devices, also conducted a successful swag campaign this year. John Angelo, director of the marketing and communications firm Abelson Group, which works with Rove, says the mobile company took excellent advantage of its opportunities as a sponsor of May's Wireless Enterprise Symposium.

As a sponsor, Rove was entitled to contribute an item to the giveaway bag distributed to all conference attendees. Rove handed out a key attached to a card that invited attendees to visit the software company's booth to see if it fit into a safe stationed there. Five of the keys distributed would unlock the safe, resulting in a cool $1,000 for the key's owner.

At last year's safe-less, key-less conference, Rove generated 500 sales leads. This year the company had three times as many walk-ups to the booth and left the conference with 1,700 sales leads.

Promotional products company ePromos says its swag work for Earthlink helped the internet service provider slash a staggering new hire churn rate.

To help Earthlink welcome new hires, ePromos produced a welcome kit in the company's orange logo color that included a letter from Earthlink's CEO and a logoed water bottle, baseball cap, mousepad and drawstring backpack. ePromos' director of marketing, Mark Yokoyama, reports that the swag resulted in a reduction in employee turnover of 50 percent.

Despite these studies in swag success, some marketers say swag has lost its overall sexiness. David Libby, president of Two Pins Public Relations, which represents interactive clients, says there was a time several years ago when having the best swag was something to which all tech companies aspired. He says the goal was to have swag so cool it wouldn't really matter that the brand name was on it because a person would remember the company name based on the uniqueness of the gift.

Libby has noticed a recent shift away from tchotchkes and toward clothes, such as branded jackets and hats. With those items, the key becomes quality. "It comes down to the lasting impression: How does this piece of swag really speak to my brand?" he says.

ePromos' Mark Yokoyama says swag given out by tech companies tends to cast a wider net than swag from brick-and-mortar businesses. Yokoyama says interactive companies usually focus on simply getting attention from their peers at tradeshows and other events. For startups still struggling to define their business models, it may be important for a brand to get more recognition or more popularity among people who could evangelize or promote the service.

After all, he points out, startups need to spend their venture capital somewhere, and initially success is whether you're going to generate PR among the right group of people, either among the press or in the blogosphere, Yokoyama says.

By contrast, David J. Reibstein, a marketing professor at the University of Pennsylvania's Wharton School, says simply seeking attention through swag is a misguided goal. Reibstein argues that "The only reason you're interested in building the brand is because that's going to help you generate sales or a higher price over time."

To help achieve that end, Reibstein suggests focusing energy on developing creative campaigns and also doing test runs. "See what the particular reaction [to your campaign] is and what the repeat purchase rate is, and that will allow you to determine whether or not it is good and worthwhile," Reibstein says.

Online media sales company Gorilla Nation Senior Vice President of Marketing and Corporate Communications Frank Simonelli offers a cautionary tale about swag. Two years ago, Gorilla Nation embarked on a press campaign in which it sent gorilla bedroom slippers to 50 editors at various publications.

"We figured it was unique, endemically branded merchandise," Simonelli says.

Perhaps, but the gift also made several editors uncomfortable enough to call and lecture Simonelli not to send future gifts. Most publications have company policies that prevent them from accepting gifts from clients they may write about, to avoid conflicts of interest or the appearance thereof. But Simonelli, who previously worked for such PR giants as Burston-Marsteller, says 10 years ago the climate was different and editors rarely refused gifts. Now, he says, the line on ethics keeps moving.

Moral of the story? Make sure you know your audience, Simonelli says.

Leah Messinger is a freelance writer.

Leah reports on technology, health, science, and other topics for a variety of publications.Prior to her work in journalism, Leah worked for many years as editorial director of a nonprofit organization.Leah lives in Southern California...

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to leave comments.

Commenter: Diane Nudelman

2008, July 16

Great article, Leah. Hope you don't mind that I linked to it from my blog (link below). It's nice to see someone from outside the swag-selling industry addressing the topics of quality and ROI.

A related topic near and dear to my heart (and blog) is Eco-Swag - my slang term for swag made from recycled, biodegradable or sustainable materials. Since so much swag does ultimately end up in landfills (and the schwaggin wagon can't recycle it all), we encourage earth-friendly choices whenever possible for our clients.

Oh, and to answer Uriahs's question:
SWAG = acronym, 'Stuff We All Get'
Schwag = slang term - low grade marijuana


Commenter: Uriah Av-Ron

2008, July 03


Great piece about swag. I'm a publicist and I have never been a big believer in Swag (unless it's really unique), but providing food like cup cakes in a timely manner sounds like a great marketing idea.

Question for you -- Is there a difference between Swag and Schwag?

Oasis PR

Commenter: Leah Messinger

2008, July 03

Thanks for the additional links, Kevin and Daniel. I love the idea of the Schwaggin' Wagon--people actually putting stuff that might be destined for the landfill to good use!

Commenter: Daniel Hartman

2008, July 03

Edible swag is a great concept, as is anything memorable and eco-conscious. While swag is key for brand awareness and is not going anywhere, it should also be discarded responsibly by advertisers and consumers alike. On Earth Day 2008, The Schwaggin' Wagon set sail for the Web 2.0 Expo in San Francisco to collect unwanted schwag and donate it to charity. The Schwaggin' Wagon is continuing its mission and welcomes discussion about sustainable schwag. http://www.SchwagginWagon.com

Commenter: Kevin Doohan

2008, July 02

my favorite swag