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Changes in the advertising market

The advertising market is both well structured and highly atomized.

Published on 01/10/2018

The advertising market is both well structured and highly atomized.

In its structure, it is a distribution with 2 intermediaries plus the final customer:

  • The wholesalers/stockers and factories
  • The distributors who are their customers
  • Seers or end-customers who buy from distributors

The distributors ensure the final marketing of promotional items manufactured, imported and stored by factories and wholesalers.

In some cases (for about 3% of the market), the wholesaler also distributes the products. This is rare and is not the rule of this highly structured market where each level corresponds to a specific role and work. Even smaller (0.5% of the market), factories (very often Chinese) sell directly to advertisers.

The distributors are about 3000 in France and share a cake with a turnover of one and a half billion euros.

Asle about twenty players have more than 5 million turnover and the market leader achieves 25 million; this is still quite small compared to the turnover of the sector. It is surprising that there are not one or two distributors who each achieve 5 or 10% market or between 75 and 150 million turnover.

In discussions with colleagues, we think that there are almost as many business models as there are advertising companies - at least for the top 20 on the list

Chacune with its personality and specificities: some have very traditional sales models with itinerant salesmen and suitcases of samples, others focus on large accounts and catalog management, some are specialists in distance selling (VAD / VPC), others are very present on the web either via very complete online catalogs with tens of thousands of objects or with smaller selections customizable directly online. This comparison of the gift companies of advertising companies can be enriched by the catalogue of business gifts and goodies offered: Some are subject to direct import with custom manufacturing, others are advertising objects already manufactured with logo markings, others are part of an ecological industrial policy linked to sustainable development and CSR, some are manufactured in France and highlight the "made in France" label

It is likely that the online trade in advertising objects will continue to grow. It's even a natural phenomenon. The whole economy is digital. We must therefore prepare for the changes of our profession and automate everything that can be automated (quotes, models, BAT, orders, etc.) while maintaining a human eye for the control of graphic elements. Automation of customization is only partly automatable. It seems irresponsible to start a production without humanly controlling the quality of the files provided and their positioning on the objects.

The digitalization of the advertising object will significantly increase a market that excludes for the moment small B2B orders (between 100 and 450 euros). The cost-effectiveness of processing these orders is not evident in a traditional sales model but becomes so in a digital model.

It is already possible on several websites, including Vcomlab.com, to make his models online. It is perfectly conceivable, in the not too distant future, that it will be possible to manufacture custom-made goodies online in series, by industrializing the 3D printer process. Individual markings (e.g. first and last name) can also be industrialized on advertising objects that have previously been customized with a logo.

Benoît Vernon, founder of Vegea

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