Sitting at the top of PPAI’s recently debuted five-year strategic plan is a goal and a vision: to establish and showcase that branded merch is the premier marketing channel that Powers Lasting Connections.

And yet still that does not preclude the fact that it exists within a larger marketing ecosystem. Branded merch and promotional products may operate as their own industry, but distributor clients and end buyers are considering them within a range of other advertising possibilities from which to make up their marketing budget.

PPAI Research conducted surveys with PPAI 100 distributors and suppliers to get a better sense of how they feel their end buyers perceive branded merch. The data presents a window into potential gaps and opportunities for the industry to consider going forward.

Distributor Reaction: Tactical … But Underweighted In Budget

PPAI 100 distributors are reporting that the branded merch market is moving toward being perceived by most end buyers as a core marketing channel. About 47% of distributors suggest consistent use by end buyers, with another 25% claiming they see it perceived as important but tied to specific campaigns.

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Of course, the remaining segments can’t be overlooked, as pointed out by Alok Bhat, market economist and PPAI’s research and public affairs lead.

“Nearly 30% of usage remains tactical or event-driven, indicating that while merch is gaining strategic relevance, it is not yet consistently embedded across all marketing strategies,” Bhat says.

How distributors see end buyers perceiving branded merch:

The word “tactical” has a bit of a marketing sheen in its own right. It is, of course, positive that end buyers associate branded merch with specific strategic plans to increase visibility, but it also implies a lack of ubiquity that would come from an advertising stream that’s understood on a larger sale for its true value. Distributors seem to have competing perceptions of how end buyers perceive its value.

  • 41% of distributors feel end buyers see branded merch as a tactical add-on or a “nice-to-have.”
  • A competing 35% see it perceived as a high-impact marketing channel.


Distributor categorizing end buyer descriptions of branded merch:

Perhaps the most crucial and relevant factor that distributors are able to speak to is where merch falls within end buyers’ marketing budgets. According to them, only about a fifth (21%) of end buyers see branded merch as a core part of their marketing budget. More commonly, 40% see it as a moderate portion, followed by 30% who see it as a small portion.

How distributors see branded merch fitting into end buyers’ budgets:

“This indicates that despite increasing usage, merch has yet to secure a consistent position as a primary marketing investment,” says Bhat.

  • The primary barriers to broader adoption of branded merchandise that distributors are seeing end buyers claim are ROI clarity and procurement constraints.
  • 50% cite difficulty proving ROI.


Supplier Reaction: Lack Of ROI Clarity Keeps Branded Merch Behind Digital

Suppliers seem to bring an even broader perspective of their end users. They report that only 18% see it as a core marketing channel, while 28% consider it important but tied to specific campaigns, and 30% look at it as a tactical add-on.

How suppliers report their end buyers perceive branded merch:

Following that logic, most suppliers feel that end users consider branded merch is either an important but secondary marketing tool or a tactical promotional tool. Only 16% of suppliers feel that end users see branded merch as a strategic marketing channel that is as crucial as digital or events.

Supplier categorizing end buyer description of branded merch:

So, if only 16% see branded merch as that essential marketing channel, then what is holding it back? According to suppliers, there are three core issues. The biggest detriment reported is that marketing budgets are limited and digital channels seem to be eating up a core part of that budget, whether that is a smart strategy or not. Lack of measurable ROI (especially compared to digital) and a (perhaps outdated) perception as low-value “swag” are also weighing it down in end buyers’ perception.

“Together, these factors keep merch positioned as tactical rather than strategic,” Bhat says.

What suppliers report is holding branded merch back among end buyers:

Suppliers are also able to speak to the advantages that branded merch holds over other advertising mediums. Long product usage and brand visibility is the most common response that end buyers understand, but a list of balanced benefits stands out, which suggests that suppliers know that end buyers who work within the channel are well-versed in its many benefits.

Benefits of branded merch over other mediums:

It’s suppliers that have the keys to the future when it comes to what the future products look like in the branded merch industry. It will be up to them to determine what drives the channel forward. Perhaps unsurprisingly, they have a variety of different opinions concerning what type of innovation will bring the industry to the next level. Product innovation and quality (65%) is the most common response, but suppliers are collaborating while bringing different priorities to the table, which makes the future uncertain and exciting.

Supplier opinions on what will drive the industry forward: