SIC 7313 Radio, Television and Publishers' Advertising Representatives

 
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SIC 7313

Establishments primarily engaged in soliciting advertising on a contract or fee basis for newspapers, magazines, and other publications or for radio and television stations. Separate offices of newspapers, magazine, and radio and television stations engaged in soliciting advertising are classified as auxiliaries.

NAICS CODE(S)

541840

Media Representatives

INDUSTRY SNAPSHOT

Companies included in this industry are called "rep firms." They sell advertising time or space on radio, broadcast television, cable television, and in print. Most rep firms specialize in a single medium. Company leaders per medium dominated their respective industries, as rep firm consolidation occurred throughout the 1990s and 2000s.

According to the Radio Advertising Bureau (RAB), radio advertising topped $20 billion in revenue in 2004, up 2 percent from the previous year. Approximately $3.5 billion came from national spots, $15.5 billion from local spots, and the remaining $1 billion from network advertising. However, radio comprised only about 7.4 percent of the $263 billion advertising industry in 2004.

In contrast, television — broadcast and cable — brought in about $67.8 billion in annual advertising revenue in 2004, accounting for a 25.7 percent share of all advertising.

Meanwhile, newspapers and magazines achieved more than $58 billion in annual advertising revenue — approximately 22.4 percent of the market in 2004. Direct mail and other media sources accounted for the remaining percentages.

Of the $263 billion spent for advertising in the United States in 2004, approximately $167 billion was spent on national spots. This represented about 63.4 percent of all expenditures. The media rep firms listed in this industry are responsible for the placement of these national ads, which can run in any market or combination of markets.

ORGANIZATION AND STRUCTURE

Most television stations, radio stations, and newspapers have their own personnel to handle sales within their respective markets. However, national media representatives are called in to sell commercial time or print space to clients outside a local market. This sales arrangement has been based on economy, since it would be too costly for every television station, radio station, and newspaper to have its own sales staff in every major market across the country.

Radio networks are arranged in a fashion similar to their television counterparts, such as ABC, CBS, and NBC. The network provides programming to stations throughout the country and receives advertising time in exchange. Unlike national spots, network ads run simultaneously on a particular network throughout the country.

Media reps sell national spots that can be placed in any market in any combination of U.S. markets. Other kinds of advertising include local spots and network ads. Local spots are advertisements that usually are solicited by the local staff of a television station, radio station, or newspaper. Network advertising refers to those ads that run on network television or network radio.

BACKGROUND AND DEVELOPMENT

The media rep business began with the original form of mass communication in the United States, the newspaper. Emanuel Katz started one of the first rep companies in 1886. At the request of William Randolph Hearst, Katz went...

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