Because They Work!
According to Forbes Magazine, "A 2016 study from the ASI (Advertising Specialty Institute) shows everything you need to know about how effective promotional products can be in branding and advertising. According to the study, most people keep the products for an average of eight months. Meaning that your advertisement is sitting in front of someone longer than a simple pop-up on a website or other online methods." 
Image: Statistics on Tote Bag Promotional Products 
Most people who receive a promotional product are also more likely to have a positive impression of the company that gave it to them. Essentially, you have a good branding message just by giving away some free products.
Bret Bonnet (CEO of Quality Logo Products) says, "Promotional products are as effective today, if not more, than 10 years ago. Promotional products have always, and continue, to show strong growth." 
Promotional products, unlike other forms of advertisement, are physical. Customers that receive a promotional product are more likely to return to the company that gave them one, because they have a near constant reminder. Pens, hats, tote bags, and shirts are products that they can receive and use any, or every, day that they choose. The United States Federal Trade Commission states that, "Under the law, claims in advertisements must be truthful, cannot be deceptive or unfair, and must be evidence-based." 
According to the study from before, 85% of consumers remembered advertisers who gave them a shirts or hats. Another study by Identity Works showed that 71% of trade show members remembered the name of the company that gave them a promotional product, with 76% of attendees leaving with a positive attitude toward the companies 
Finally, in addition to being physical, people love promotional items because they are free. It is a way of telling a customer that they matter and that your company doesn't solely exist for its own profit. Before they purchase anything, they have already received the promotional item and, through that, have a sense of your dedication to quality. 
It is one of the easiest ways to establish a name for yourself and solidify a good perception in the mind of your customer when it counts the most - as soon as they interact with you.
1. Delta Marketing Group, "What Are the Most Popular Promotional Items? [Infographic]", https://www.godelta.com/blog/what-are-the-most-popular-promotional-items-infographic
2. Forbes Magazine, "Branded Giveaways And Other Promotional Products: Do They Still Have An Impact?", https://www.forbes.com/sites/allbusiness/2017/12/14/branded-giveaways-and-other-promotional-products-do-they-still-have-an-impact/#39b1deec7790
3. DesignHill, "5 Reasons Why Promotional Products Are Crucial for Any Business", https://www.designhill.com/design-blog/reasons-why-promotional-products-are-crucial-for-any-business/
4. LogoTech, "WHY PROMOTIONAL ITEMS ARE IMPORTANT FOR BUSINESS", https://www.logotech.com/blog/promotional-items-important-business/
5.The United States Federal Trade Commission, "Advertising and Marketing", https://www.ftc.gov/tips-advice/business-center/advertising-and-marketing
6. Small Biz Daily, "2019 Promotional Product Trends", https://www.smallbizdaily.com/2019-promotional-product-trends/