In another sign that the promotional products industry has embraced the digital revolution, more than half of PPAI 100 distributors and suppliers are currently using artificial intelligence (AI), according to the latest survey from PPAI Research.

  • Furthermore, more than three quarters (78%) of PPAI 100 distributors and half of PPAI 100 suppliers report some level of positive impact from implementing AI in their business.

“AI’s role in promotional products companies is undeniably growing, with a predominant positive tilt,” says Alok Bhat, market economist and senior manager of research at PPAI. “However, the varying degrees of this positive impact underline the importance of strategic, well-informed AI adoption and the continuous evolution in its application.”

Political Priority

Considering the promo industry traditionally skews older, the data surprises Mark Mancini, founder and CEO of Givenly.com (PPAI 698869, D1), a Chicago-based distributor that uses a gift catalog generator powered by a proprietary AI algorithm.

“The numbers are much higher than I expected,” says Mancini, who told PPAI Media in September that AI adoption in promo will come more from platform providers selling to firms rather than firms adopting the technology themselves. “It’s just not going to happen outside of companies like Givenly.com, OrderMyGear and others who can supply the technology to the distributor to do their jobs more effectively,” he said.

Earlier this week, President Joe Biden issued an executive order that establishes new standards for AI safety and security. Among Biden’s goals with the executive order are:

  • Prioritizing federal support for accelerating the development and use of privacy-preserving techniques 
  • Developing principles and best practices to mitigate the harms and maximize the benefits of AI for workers
  • Catalyzing AI research across the United States through a pilot of the National AI Research Resource and expanded grants for AI research in vital areas, like healthcare and climate change.


How Promo Firms Are Leveraging AI

The AI adoption rate amongst PPAI 100 distributors and suppliers is 59% and 55%, respectively, according to PPAI Research.  

The majority of both groups (78% of distributors and 75% of suppliers) rely upon AI for content generation for marketing materials. “It makes sense that the highest adoption of AI is in large language models for content generation, as that’s the most user-friendly application with ChatGPT, Bard, etc.,” says Eric Hamlin, head of swag at New York City-based distributor Snappy (PPAI 816234, D6).

Adrienne Barker, former corporate vice president at Cheshire, Connecticut-based distributor Barker Specialty Company (PPAI 102001, D7), agrees. The industry veteran now serves as a business consultant to promo firms, using ChatGPT to create her clients’ LinkedIn posts and incorporating AI-generated artwork for their newsletters. 

“The heavy use of AI in content generation is evident and underscores the value AI brings to marketing tasks,” Barker says.

While a quarter of suppliers incorporate AI in their fraud detection and counterfeit prevention strategies, only 11% of distributors do the same.

  • More suppliers (25% for each) than distributors (11% for each) also use the technology for product recommendations, international market translations and virtual sampling.

Conversely, more distributors (22%) than suppliers (17%) employ AI-powered chatbots, which can enhance brand responsiveness by providing 24/7 customer service.

  • More distributors (22%) than suppliers (8%) also use the tech for generating design ideas.
  • Meanwhile, AI assists in logo and artwork creation for 22% of distributors, too.

Whereas a quarter of suppliers use AI for customer engagement, 17% incorporate the tech in customer data analysis and campaign performance. Only 8% of suppliers use it for inventory management and price optimization.

Challenges With Implementing AI

Not everyone is seeing the benefits of AI.

One-third of PPAI 100 suppliers and 22% of PPAI 100 distributors have experienced no significant impact after implementing the technology, according to PPAI Research.

  • Meanwhile, 17% of suppliers aren’t sure of the impact, which might point to a lack of metrics or understanding to evaluate AI’s influence accurately.

Bhat, who worked on building solutions around AI and generative AI for the past decade at Accenture before joining the Association in August, says there might be challenges in implementing AI effectively, or perhaps the tools and technologies these firms have adopted aren’t fully aligned with their business needs.

“Addressing these challenges requires a combination of skill development, change management and possibly a shift toward more tailored AI solutions,” says Bhat, adding that this segment of respondents might benefit from a reassessment of their AI strategies, better training or selecting different AI tools.

The majority of respondents (63% of distributors and 60% of suppliers) report a lack of AI expertise as their most significant barrier. “Most of us are trying to figure out the best way that AI can help our business,” says Molly Beavers, CAS, vice president of marketing and communications at Bankers Advertising (PPAI 101972, D8). The Iowa City, Iowa-based distributor currently uses ChatGPT to assist with content creation for social media, blog posts, newsletter articles, flyers and marketing materials.

Additionally, 60% of suppliers (compared to just 13% of distributors) find integrating AI with their existing systems to be an obstacle. “The challenge of integrating AI into existing systems can’t be understated,” Barker says. “It indicates the need for more seamless, plug-and-play AI solutions tailored to industry-specific needs.”

More than one-third (38%) of distributors report that resistance to change within their organization is a major hurdle when adopting AI. Conversely, only 10% of suppliers blame organizational resistance, which could stem from the perception of high costs or unclear ROI.

  • In terms of cybersecurity, one in five suppliers cite data privacy concerns compared to just 13% of distributors.


Register Now For The PPAI Expo

On Monday, January 15, The PPAI Expo 2024 kicks off with The PPAI Expo Conference, a one-day educational event with a curated slate of experts from both within and outside the industry to enlighten promo professionals and spark conversation throughout the rest of the four-day event.

Futurist Anat Baron will open the conference with a session on human and AI collaboration, explaining how it will help us succeed in a world where we need to connect, predict and adapt in real time to meet customers’ needs.

Register early for discounts on select hotel accommodations. For more information on The PPAI Expo 2024, visit expo.ppai.org.

To register, click here.