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By Alan Gottesman





Double-edged Pendulum For much of the '80s and '90s, ad folks watched as an increasing share of client marketing budgets slipped out of advertising and into various promotional channels. A couple of years ago, the pendulum seemed to be returning, with conventional advertising outgrowing sales promotion and regaining some of its lost share. Well, that sort of happened, but also sort of didn't. 'Promotion' covers a lot of territory, including special deals for retailers and incentives for salespeople. This incentives category, the largest sub-group within the promotion field, appears to have expanded only 4 percent in 1995 from the year before. (The 1996 figures won't be out until midsummer.) Couponing, another promotional mainstay, declined in the same period. Softness in these two areas limited the promotion industry's overall growth. But sponsored events, fees paid to promotion agencies, in-store marketing and spending on interactive promotions all rose faster--sometimes much faster--than advertising; and all of these categories drew a billion dollars or more out of the total market mix. --Alan Gottesman (westendal@pobox.com) is principal of West End Consulting.





THE GOTTESMAN FILE





Spending increases in sponsored events, in-store marketing and interactive projects helped the promotion industry expand by nearly $5 billion.





1994 1995 Change





Premium incentives $20.0 $20.8 4.0%





Point-of-purchase displays 11.1 12.0 8.3%





Coupons 7.0 7.0 -0.6%





Sponsored events 4.3 4.7 10.6%





Interactive 1.1 1.5 36.8%





Promotion agency fees 0.8 1.0 20.0%





In-store marketing 0.8 1.0 19.4%





Sampling 0.7 0.8 9.9%





Other 19.8 21.2 7.2%





Total 65.7 70.0 6.7%





Source: West End Research. Dollar figures in billions





Copyright ASM Communications, Inc. (1997) ALL RIGHTS RESERVED





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