Why Global Companies Don’t Know What They Spend on Branded Products
TL;DR
Large multinationals spend between 0.2% and 0.5% of revenue on branded products, roughly €2m to €5m a year for every €1bn in revenue. Procurement typically sees less than half of it. The rest hides in three categories: local team purchasing, event-embedded spend, and employee-initiated reimbursements. Sectors face different structural pressures: financial services and pharma carry heavy compliance overlays, manufacturing struggles with supplier sprawl, tech shows the widest per-employee variance. The waste isn’t only orphaned stock. Centralised warehousing and cross-border shipping add cost, lead time, and carbon to every unit. Local production, against actual demand, removes those legs. Producing a real spend baseline is the first step toward control. Ciloo’s Promo Spend Calculator is the practical starting point.
Ask a marketing director at a 10,000-person multinational how much their company spends on branded products each year. Most of them will have no clue.
Not because the person is uninformed. Because the spend itself is structurally invisible. It lives across at least six different budget lines, is managed by teams across four continents, and arrives in the company’s accounting system under category codes that range from “print” to “hospitality” to “employee engagement” to “miscellaneous.” It also moves through a supply chain built around centralised warehousing and cross-border shipping, which adds cost, carbon, and lead time to every item that eventually reaches a recipient.
This article draws on Ciloo experience, covering multinational clients across financial services, technology, manufacturing, and healthcare, alongside published industry benchmarks, to produce the clearest available picture of what large organisations actually spend on branded products, and why that number is almost always higher than anyone expects.
The industry baseline
The US promotional products industry generated $27 billion in distributor sales in 2024, according to PPAI’s annual Sales Volume Report — the most authoritative longitudinal measure of the industry, conducted annually since 1965. Growth was 2.6% year-on-year, modestly ahead of 2023’s 2.2%, though still trailing the 2.9% US inflation rate for the year.
Global figures are harder to fix precisely. 2021 estimates placed the worldwide promotional products sector at $84 billion, but figures vary based on scope, methodology, and which supply chain tiers are included. This uncertainty is in itself informative: promotional products resist tidy aggregation, for reasons that become clear the deeper you go into how spend actually flows through large organisations.
The sector has grown every year since 2021 and is projected to continue expanding through the decade, driven by two structural forces: more in-person events and trade activity post-2022. The promotional product market size in 2025 is estimated at $97 billion, rising to an estimated $130 billion by 2033. This coincides with the rise of online branded merchandise platforms, which now account for 26% of US industry revenue ($6.8 billion in 2024).
That last figure is worth pausing on. A quarter of the US market now transacts online. In a sector that has historically operated through distributor relationships and printed catalogues, this is a significant, growing shift.
Why the number is always wrong
Large multinationals spend between 0.2% and 0.5%* of revenue on branded products, roughly €2m to €5m a year for every €1bn in revenue. However, when procurement runs an audit, they typically surface less than half of it. Procurement sees what flows through approved suppliers, formal POs, and tagged line items. The rest is buried in country-level marketing budgets, event invoices, HR gifting lines, and regional agency retainers, often paid in local currency and outside a single category code.
That remainder sits in three categories that a central procurement view rarely captures:
Local team purchasing. Regional offices, country managers, and local marketing teams regularly order branded merchandise directly from local suppliers, typically for events, trade shows, welcome kits, or seasonal campaigns. These orders are real, frequently off-brand, and paid in full. They do not appear in the central spending picture because the purchase never touched a central supplier or category code in the first place.
Event-embedded spend. The next layer hides inside a different budget line. Branded products ordered as part of a conference, trade show, or sponsorship activation are typically coded to the event budget rather than to a branded products or marketing materials line. That makes them invisible in category analysis but not in actual spend. A large organisation running 50 or more events a year can carry hundreds of thousands of dollars in branded product costs inside its events budget, never surfaced in a consolidated picture.
Employee-initiated reimbursements. The most fragmented layer sits in expense reports. In companies without a centralised branded products ordering platform, employees purchase items locally and claim the cost back. This spend is scattered across expense systems, carries no quality or brand control, and is rarely tagged for category analysis. It is also chronically under-reported: employees regularly absorb small purchases rather than file a claim, which means even the reimbursement data understates the true behaviour.
Spend by sector
The range of branded product spend is wide and depends on multiple factors. Within Ciloo’s client base, clear patterns emerge by sector.
Financial services and insurance firms spend heavily on branded products, particularly for client gifting, regulatory gifting programmes, and advisor-facing materials. Industry-specific regulation adds both cost and administrative overhead: FINRA caps broker-dealer gifts at $100 per recipient per year, MiFID II restricts and requires disclosure of non-monetary benefits to investment firms, and US state anti-rebating statutes limit what insurers can give customers. Every item needs to be logged against the right regulatory category, valued accurately, and in several jurisdictions disclosed to clients or regulators.
Industrial manufacturing companies operate with large field workforces and extensive partner and distributor networks. Branded workwear, safety-compliant equipment, and channel partner gifting drive significant volume. The challenge in this sector is brand control and the sheer number of suppliers: large manufacturers commonly manage 30 to 60 suppliers of branded products across their regions, with no consolidated view of pricing, quality, or brand consistency.
Technology and electronics firms show the widest variance. High-growth companies in expansion mode frequently push a higher per-employee spend. However, local teams often revert to local purchasing when central programmes fail to serve them quickly enough.
Healthcare and pharma companies operate under the strictest gifting regulation of any industry. In the US, the Physician Payments Sunshine Act requires manufacturers to disclose any transfer of value over roughly $11 per item to physicians and teaching hospitals, published publicly on the CMS Open Payments database. The PhRMA Code effectively prohibits branded promotional items to healthcare professionals in the US, and the EFPIA and UK ABPI Codes apply similar prohibitions across Europe. Branded products for HCP-facing use (doctors, nurses, pharmacists) are therefore a narrow, heavily controlled category limited to educational materials and approved congress collateral. Running in parallel is a far larger unmanaged stream: internal employee onboarding, team events, patient-facing materials, and corporate gifting. Procurement typically sees only the compliance-managed slice, which is the smaller of the two.
Real estate and franchise networks represent a structurally different challenge. In franchise models, brand spend is often partially funded through co-op programmes, where franchisees draw from a central brand fund to purchase approved branded materials. Managing this spend requires a platform that can handle fund balances, approval workflows, and multi-supplier fulfilment simultaneously. Without that infrastructure, co-op funds are systematically underutilised.
Managing Waste
Volume and spend are the parts of a branded products programme that procurement can see. Waste is less visible and, over time, more expensive. As one procurement lead put it:
“The real metric is cost per item actually used, not cost per item ordered. Nobody does that calculation because the result is uncomfortable.”
Waste is hard to quantify at the industry level because pre-distribution waste is not consistently reported. Among clients arriving from prior warehousing-based programmes, initial audits have found residual stock representing between one and three years of ordering history, including items bearing out-of-date logos, discontinued product lines, and address details for offices that no longer exist.
Central procurement teams order against forecasts. Local events get cancelled or scaled back. Brand refreshes make existing stock obsolete. Products arrive after the campaign window has closed. The result is storage rooms in head offices, regional depots, and third-party warehouses, holding merchandise that will never be used. Orphaned inventory is a cost that never shows up in the per unit comparison. Many companies write off thousands of dollars in unclaimed branded products. Often, disposal carries an additional cost and with new reporting obligations, such as the emerging Digital Product Passport framework, disposal will become even more of an issue.
Better stock management addresses symptoms, but not the underlying issue. That requires a shift to on-demand local production, where items are produced against actual demand rather than forecast.
The industry is moving in this direction. According to ASI Research, 54% of US promotional products distributors now offer print-on-demand services. However, 78% treat it as an add-on rather than a replacement for bulk production. The model is shifting, but slowly.
A second structural cost sits in the supply chain itself. In the centralised model, items are typically produced in one country, often China or southeast Asia, shipped to a regional hub, and then re-shipped onward to the country of use. Each crossing adds freight, customs handling, lead time, and carbon to every unit that does eventually reach a recipient. Companies hold buffer inventory to insulate themselves from those long lead times, which becomes the orphaned stock.
“Orphaned inventory is a cost that never shows up in the per-unit comparison.”
Local production removes those legs. Producing the same item in the country of use, against actual demand, eliminates intercontinental shipping, customs clearance for stock that may never sell, and the buffer inventory built to compensate for distance. This is the operating model Ciloo is built on, rather than the add-on model the ASI data describes.
While the total unit cost for on-demand production is modestly higher, the total programme cost, including storage, logistics, write-downs, and waste, is consistently lower. Savings come from structural improvements: fewer units, fewer borders, fewer suppliers, and less admin.
What visibility changes
Organisations that achieve a consolidated view of branded product spend report consistent improvements across three areas.
Category intelligence
When all spend is visible in one place, procurement teams can negotiate from an accurate baseline. Supplier consolidation at scale routinely delivers 10–15% unit cost reductions without changing ordering behaviour.
Brand compliance
Local purchasing without central oversight introduces cost and brand risk. Off-brand items, incorrect logo versions, unapproved colourways, and non-compliant materials appear regularly in unmanaged programmes. Centralised programmes show a clear reduction in these issues.
Sustainability accountability
Distributed purchasing leads to distributed waste. Consolidated platforms can track total items produced, distributed, and stored. This data is increasingly relevant for ESG reporting and for procurement teams working toward scope 3 emissions targets.
Sustainable products already account for 13.8% of US promotional products sales ($3.69 billion in 2024, per PPAI), a 20% year-on-year increase. This is no longer a niche consideration.
Where to start
The question that opened this article — “how much does your organisation actually spend on branded products?” — is harder to answer than it should be. Not because the data does not exist, but because it has never been brought together in one place. That is one of the problems Ciloo was built to solve: a complete, accurate picture of where branded product spend goes, paired with an operating model that produces items locally, in the country they are used, against actual demand.
For most organisations, producing that baseline for the first time is the most revealing step. The audit usually surfaces two patterns: spend that has never been consolidated, and a logistics footprint built for a forecast-and-warehouse model rather than a distributed, on-demand one.
Ciloo’s Promo Spend Calculator is a practical starting point for teams who want to estimate their true annual spend before committing to a full programme audit.
*The 0.2% to 0.5% figure is triangulated from two benchmarks: enterprise marketing budgets typically sit at 4% to 7% of revenue (Gartner 2025 CMO Spend Survey; Deloitte CMO Survey), and promotional products typically account for 5% to 10% of marketing spend. The PPAI’s $26.78 billion US market size for 2024 is consistent with this range.
Christian Sæterhaug is the Co-Founder and Chief Revenue Officer (CRO) of Ciloo. He has extensive experience in go-to-market strategies for e-commerce, having held leadership roles at global tech companies, including Gelato, where he established the company’s presence in the U.S., and EasyPark. Christian has met with marketing teams at over 600 companies, primarily discussing how to manage events and branded products globally. He applies that experience at Ciloo, helping brands streamline local, on-demand production through one smart platform.