Episode 347: Reframing Promo as a Marketing Channel with Drew Holmgreen (PPAI)

What if we reframed our entire industry in the minds of our buyers? Well, on today's show, we're exploring that with Drew Holmgren and his vision as president and CEO of PPAI and what he's learned in his first 8 months leading PPAI, including how his agency background is reshaping his perspective on promo, his goal to reposition our industry as a powerful media channel, and what it means for distributors and suppliers as we navigate the two biggest disruptors, AI and tariffs. Welcome to the SkewCast, the podcast for innovators and maverick thinkers in the promotional product space. My name is Bobby LeHew. I'm glad you're here. Drew was announced as PPAI's next president and CEO in December 2024. He's led across nonprofit trade associations and for-profit sectors, most recently serving as chief experience officer at Meeting Professionals International. Today's episode is brought to you courtesy of us at Commenscue. Over 900 distributors powering $1.8 billion in network volume rely on Commenscue's connected workflow. Process more orders, connect your team, and dramatically grow your sales. To learn more, visit commenscue.com. Now here's my chat with Drew. Drew, welcome to the SkuCast.

Thank you, Bobby. Happy to be here.

So glad you're here. So you're now about 8 months into your role as president and CEO. How has your perspective on the industry shifted now that you're seeing things from the CEO seat?

Yeah. So one of the big things that I've been impressed with is competition. And what I mean by that specifically is how competition, it exists, but it's extremely friendly and very collaborative. I don't know if I've ever seen anything like it before. And this is, you know, this comes from goodness, my days on the agency side. Competition was not friendly. It was, it was whatever the opposite of friendly is, that's what competition is on the, on the ad agency side. So, and some of the reason why I found my way out of it, I was sick of some of that because I, I did in two different agencies, I worked on business development and at both of those agencies, I found myself in multiple dogfights and in, in some, a couple of times I got kind of screwed over by some of my mentors. So, Yeah. So you don't see that here. Just last week I was, or two weeks ago, I was at Legacy Group. Yeah, great group. Yeah, it's awesome. And sitting around the table listening to their 11 partners and the CEOs of these good-sized companies talk about strategies they're using for their clients.

Yeah.

That doesn't happen. You don't see these are people who are technically competing against each other and They're talking about the strategies that are beneficial for their organizations and how they work with clients and best practices and things like that. And that happens on the supplier side too. It's just, it's a, it's a very competitive collaborative or collaboratively competitive industry. It's just, it's, uh, it was shocking to me, but it, it validates a lot of the reasons why I was interested in, in this role and the opportunity that I saw here is that it's communities that have a very, uh, industries that have very, very active and strong association. Are those that are typically the best to work within because it's a, it's a good working environment and it's good people and it just, it just proves itself. And every, everybody I meet with is positive and collaborative. So it's, it's pretty great.

You may have even answered my next two questions because one was about what you find energizing about the balancing advocacy and community and innovation. But the other was like, you started your vision in the industry with an article called A Vision of Joy. And I was going to ask you what that means for promo. And there's so many ways that can be interpreted, but what does that mean for you?

Yeah, it's interesting. So it does extend itself to the people a lot. When I really started digging into it, and this actually goes back to when I was interviewing. So I mean, again, I'm a marketing guy by trade. Like, that's— I've been interested in it since I was a little, little kid, although I didn't think it was marketing then. But that was— I used to— I had like my own lemonade stand. And in front of my lemonade stand, of course, I had, you know, a billboard. And then I also, I didn't think about this one. So I remember this promo that I did where like the 5th person to buy a lemonade got this little Ricky the Raccoon poster. I mean, I was doing my own marketing as like an 8-year-old. You're, when you create an emotional connection with the target audience, brands that do that see a 23% lift in campaigns that push forward that emotional connection. And I'm sitting there reading this article and we're actually going to reach out to the author at Adweek because there was no mention of merchandise. And we could easily go through 100 case stories from the past 12 months about merch campaigns that created an emotional connection. And ultimately, those lead to joy. So when I talk about joy a lot, I look at this industry. And when I was interviewing for the job, I thought about how we are the creators of joy, both in a very— in a marketing way, but then in also a very physical way. And so I love that about our business. And when you walk around the expo floor or I go visit, you know, Legacy Group or I promote you or SanMar or whoever, you see it and you feel it in the staff. Like everybody just has this happy feeling about them because they, they're all involved and bought into that sense of joy we create.

Going back to your agency and branding experience, particularly on the agency side, how does that creative and strategic agency mindset influence the way you work with people and how you think about promo?

Yeah, sure. So one thing that on the agency side, you know, my role, I did business development, but when I was doing that, a lot of that was new business pitching and, um, 17 years of my career and even dating back into college, my focus was on the business side of it, but really the strategy. So I was in account service. I was account director, account executive, all of those account-oriented jobs. So the, when you're working with your clients and this applies really well to both suppliers and distributors and business service providers, regional associates, everybody in this industry is being consultative, asking the question. And that's one of the things that I think we've got a big opportunity to apply within this industry currently. We've got this bad perception of being tchotchkes and trinkets and stuff like that. I overheard, I was at Geiger Galleria. They were talking about how back in the day, somebody who was, who was on stage was talking about how their dad would walk into a room with a bag and just empty a bunch of pens on the table.

Right. Right.

That's the bad stigma that we get. The reality is that we are, we have the opportunity to go to our target and go to our client and say, you know, who's your stakeholders? What message are you trying to convey? What are you trying to actually accomplish by this campaign? How can we link this to other efforts? How can we make this bigger than what it already is? That's the consultative nature that you see good agencies do. Good agencies will go out there and we'll do a creative brief. We'll do a marketing brief. We'll do a full-on strategic brief. Do. I mean, I can't tell you how many brand workshop sessions I did with clients. Those are the good agencies. Those are the people who are being smart about how they're trying to work alongside their clients and accomplish a strategic objective. That's the opportunity that we have within the merch space. I was on a call yesterday with ladies in promotional products, and we were talking very specifically about this and about how one of the ladies who was on the call said, you know, she recently went to a client and the client said, you know, I just really need some pens. And she said that I might not be the right person for you. That's great. That's the right stance to take. I mean, yeah, bring the value back up in what we do.

You speaking of value, it always felt— I always felt like agencies did a great job of selling value, whereas we always sold product cost and with a markup. And agencies would sell something, a creative solution, and they would say, you know what, this company is going to earn 10x on this campaign. So we are going to charge what's going to be worth the value of this to the brand, not the cost of goods sold plus a markup. And it's— that's always been an interesting, like, blue ocean opportunity, I think, for our industry. It requires, like, a major reset for our industry if we do that. But do you feel like the industry needs this fairly large brand reset?

I don't know if it's so much of a reset as it is kind of a reframing, maybe a little bit of a repositioning. That's, that's also something that when I came on board, I started thinking about a lot. And I've been talking a lot to folks within our industry. I'm fortunate in that I get the opportunity to stand on stages and meet in large virtual groups to talk about strategies for the industry. And that reframing is a lot of what we are in the process of starting to do. I see it the way that I view merch now, and I didn't back in the day. I view merch as a marketing channel. It's no different than TV. It's no different than digital, than radio, you name it. Advertisers, marketers, CMOs, chief brand officers, brand managers, creative directors, you name it. They don't think of merch as a marketing channel. They think of it as this cool thing that we can do to get our logo on somebody's cap. They don't see it as a strategic mechanism to get that message out there. So that's really, that's, that's that kind of reframing. We're, we're hiring some really good people, people who are far smarter and better than me to do the right things for it. So we hired Melissa Ralston as the Chief Marketing Officer. We hired Christopher Chaney as Chief Operations Officer. We just brought in Kathleen Burr is our director of marketing. We just brought in Kyle and dang it, now I'm forgetting his last name because he's got a complicated last name like mine, but he's our creative services manager. We're bringing in all this great talent purposefully to help drive that reframing. So Melissa and the marketing team, along with, you know, Josh Ellis and the media team, they are really working up a strategic marketing campaign to help reframe merch, to help position it as a marketing channel. To invest our resources and collaborate with some of our members to get this campaign lifted off the ground and get it out into the public. This is what I mentioned a second ago. You know, we're approaching it the same way that we would as an agency. We're going to outsource it to an agency, do a full marketing brief, be very strategic in how we identify our stakeholders, how we align the messaging with those stakeholders, and then get into execution mode.

So to recap, so there's a CMO that I love. She actually lists merch as a pillar of a brand now, not as a by the way, right?

Those are few and far between.

They are few and far between. So, so now that I can recap what you just said, basically using merch or creating merch as a channel because we've seen especially digital advertising, how much money is spent in digital advertising and how much if we can compete on that level, we need to create this own transformation. You've brought the team together to do that and then we need to be able to take a good story to our clients. To be able to sell that. How does, how does PPAI plan to leverage, like, you're sitting on this goldmine of data and these relationships in the industry to strengthen that position. How else do you see that unfolding as we move along?

Yeah, actually, you nailed two pieces of it. So as we reframe and get this message out there, the strategic marketing campaign is one piece of it. Data is another piece. So we've been, we're undervalued as industry, significantly undervalued. When I first, when I was at Expo on day number 3, I got to stand on stage and address our audience, which was fantastic. And I asked for a couple of data points that I could share about things that are going on with our industry. And one of them was $27 billion. That's the size of our industry in the United States. And I remember being handed that number and thinking, I mean, I just came from the Association for Event Professionals and that was a $1.1 trillion industry. Yeah, there is no way that the events market is that much bigger than the, the merch market. And so again, to it, that $1.1 trillion isn't— that's not revenue, that's direct economic impact globally. So that is a data point we don't have. That's a data point that we're now in market to go get, right? So we're collaborating with BPMA, with PPPC, with AFA, with potentially ASI, uh, with EAC, with the American Marketing Association. All of these groups are going to come together to help both fund and deliver this global economic impact study. So just imagine that if the meetings industry is $1.1 trillion, and I know for a fact that it is a fraction of the size of the merch industry, when you start to connect all of those points from the cotton producer, in whatever country to the manufacturing, where it's the manufacturing plants, to the warehouse, to the shipping chains, to the recipients on the other end, all the way to your end user. That's a lot of hands. That's a lot of, a lot of dollars exchanging hands. That's a lot of people. So the global impact of this industry is huge. Once we get that, those numbers, we'll have them defined by country. And so now we've got a great not just advocacy mechanism for this industry, but, you know, when you're approaching a client and they're like, well, I don't really know if merch makes much of an impact. Oh, by the way, it's an X trillion dollar global impact. Yeah, it's phenomenal. Yeah. So that along with sustainability data, uh, Liz Wimbush is our director of social responsibility and who is awesome. She is fantastic. And I'm very lucky that she, she's one of my direct reports. So I get to hear every single day, all the cool stuff she's doing. But she, of those cool things, she's working on a carbon footprint study. She's continued to, continuing to do benchmarking studies about different associations and how they approach sustainability. So getting all of those data points and then Josh Ellis and his team, the research team do a great job here of getting return on investment numbers, how, how merch resonates with a particular target audience, or we can continue to amplify those. So you just get all of those pulled together and you've got, you know, you've kind of got that bulletproof shield to put in front of you when somebody's asking you about what, you know, what can this mechanism really do for me?

Yeah, absolutely. Great, great stuff to take to our clients. You visit a lot of industry companies. What trends or behaviors are you sort of seeing among distributors and suppliers that you think are signals of like big industry shifts?

Yeah, I mean, first of all is sustainability, true green initiatives. I think that I see distributors doing a lot with it. I see suppliers doing a ton. Ensuring that, you know, whether it's the shipping that they do and the materials that they use, ensuring sustainability there all the way to automation to keep things very, very efficient. I mean, just, this was interesting and this is a distributor, but I was at Overture a few weeks back and Tesh was showing me this new light system that they put into their warehouse area. These are the little things you don't think about. So now it's not only is it all automated based on motion sense, but it turns on and turns off. Fairly quickly. And he said it's saving tens of thousands of dollars just based on a small change like that. If you go to Geiger's facility, Geiger's got a massive solar field. It's the largest— I want to say it's the largest solar field in Maine, and it powers something like 90% of all of their facilities. So you see the sustainability not just on the product side, but then on the operations side. Yeah. But one of the things that's actually blown me away and you'll never hear any of our members actively tell the story, so it's kind of our job to tell it for them, is the inclusivity that our members do, going all the way to, um, you know, specially abled individuals. So I was at 4imprint, and I didn't even ask the question because I didn't want to embarrass Kevin or Suzanne or Brian who were giving me the tour, but they had an entire section of their facility that was differently abled individuals. I just thought that was exceptional. And then same thing over at Overture. So this was one of my favorites. So we're walking through Overture. I'm with Tesh, their CEO, and their VP of operations, Mike. And we're walking through their facility and all of a sudden a guy like walks over to us, points right at me, says, who's that guy? And Tesh says, well, this is Drew Holmgren. He's the CEO of one of our industry associations. And this guy just kind of eyed me up and down and said, okay. And he said, well, welcome. And I was like, all right, thanks, man. And we just kept walking. I said, Tesh, tell me about that. And he said, well, You know, we, we really like to help the local community. And so we bring differently abled individuals into the shop to work here. And he said, so I think that guy's name was Matt. He said, so we have a very firm policy around not being on your, your device while you're walking around the manufacturing floor because things happen. Tesh is the CEO. Okay. Matt runs over to him one day, apparently says, you're not supposed to be on your device. And Tesh says, you're right. I'm not. These are great stories. Our industry is doing great things like that. They're not telling the stories because they're not going to. And that's also just another great indicator of the personalities and people's—

Yeah, people. Absolutely. Two big shifts that are happening right now, AI and tariffs. And back to you visiting a lot of companies, what are you hearing? Those are two big topics. So forgive me for throwing that in. It's an open-ended question at the end here. But what are you hearing from distributors in terms of AI and what are you hearing and suppliers and what are you hearing in terms of tariffs, especially right now? As we record this, it's Tuesday, August 12th. And so who knows what the tariff conversation will be like next week or tomorrow even. But what are you hearing in regards to both of those? How do you feel about those and how they impact the industry?

Yeah, I mean, for each, our stance is remaining informed on both and to not fear either one of them. And I'll start with AI. So we're doing a good job. We think we can always do better. We're doing a good job of developing training and information and content around AI. It is the constant question everywhere you go. What I've seen is that where I think we can be better, there are a lot of our members who are good case stories and how they're using it, whether it's, you know, distributors using it for some of their operational needs or suppliers using it for automation. There's really good stories and the size, the size doesn't matter. So big to small distributor, you see really good stories there. Our board chair Denise at Fareware, she's got one of her staff members who's using ChatGPT to do custom queries. So it helps inform her salespeople. As soon as a lead comes in, bam, it just pops in there, gives all the information that they need, and they can follow up very informed and educated as soon as they want to reach out to that contact. So you see things like that, different ways that our, that our membership is using it. And when I say be informed and not afraid, it's, I think we can be better about informing those kinds of case stories and bringing real-world application to light. But I don't want— our community shouldn't be afraid of this. This is an exceptionally strong tool. I mean, I use it multiple times throughout the day to aid me in different developing content or even asking questions about things that I should probably know. On the tariff side, again, informed and not afraid. The reason not to be afraid, this is not going to be comforting, but we don't have control over it. So you can't fear it. Be informed about it so you can be prepared. I will say that we do an exceptional job, again, giving Josh and Alok and Rachel and John and Johnny and the rest of the team, giving them all of the credit for content development. If you're not watching our media channel, follow our media channel very tight because they are on top of it. Also giving Alok and Rachel credit, we are doing quite a lot in terms of advocacy. So we've got a lobbyist firm called Thorn Run Partners that we just hired this past November in DC. They do a wonderful job of ensuring that our voice is out there. And we have our big event that took place in April where we took 100 delegates there. We're also doing a smaller event here in November where we're going to talk to actual policymakers. So just stay informed, follow us, and then we've got toolkits that we put through the regional association so you can then advocate on the— at a local basis. So our members can be doing that. Change starts locally, and we could— and we can then take it to the national level.

We will link to all these resources that we've been talking about, PP Media and the others in our show notes. So just go there to check it out. One last question for you, Drew. Is there anything, I know you have a town hall coming up and we've talked about a lot here. So is there something that you want to unpack or share that PPAI is doing or heads up or anything as this last question? Or maybe even is there something that PPAI does for members that's important, but it's so low visibility, but incredibly crucial?

Yeah, I'll give two things, Bobby.

Okay.

One thing I mentioned, we don't, we're not doing a great job right now of telling some of these case stories in AI. We, we do that to a fairly solid degree in our in-person education. I think we can start finding more ways to incorporate it into webinars and things like that. What we are doing an exceptionally good job, and I don't, I, I hear this in visits, is we have exceptional education that's available to all of our members on the website, and the majority of it's free. We just launched a new learning management system. That platform launched August 1st. The education team led by JGR, Jessica Gibbons Rausch, they are doing a fantastic job of getting great resources out there. I tried out the system. I got my TAS. I'm starting my CAS here pretty soon. The content is great. It's engaging. Uh, each of our instructors does a really good job of making it relatable, especially for somebody like me coming from outside the industry. It's like so many things just clicked as soon as I watch any of our education. So that's one thing that I don't think our community takes enough advantage of. The second is we do have a nonprofit called the Promotional Products Education Foundation. So that foundation this year will give out, I want to say, $325,000 in scholarships. Wow. Every single— in total, and I don't know how many years this goes back, but in total we've given over $4 million back to the community. This year we have already reached a record level in donations. We can always do better. We raise somewhere in the area of about, uh, $400,000 to $500,000 a year. That could easily be tripled and we can start to give back so much more. So I've seen it, we're taking much more amplified measures to get our community aware of PPEF, but there's so much more that we can do. I'd love to see us expand that to bigger scholarships, to research grants, to grants for regional associations. But in order to do that, we need this industry to give back a little bit more.

Drew, thank you so much for your time. I have so many more questions. We're gonna have to do a part 2 because I have so many questions I wanted to ask you. We'll link to everything that Drew talked about here today. Also, it's probably time to start making those Expo plans. So we'll link to all of those things in the show notes. But Drew, thanks for spending time with us here today, my friend. Absolutely.

Happy, happy to do it, Bobby.

Thank you.