SIC 7312 Outdoor Advertising Services

 
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SIC 7312

This industry includes establishments primarily engaged in the preparation of poster displays and painted and electronic spectacular displays on billboards, panels, bulletins, and frames, principally outdoors. Such establishments may construct, repair, and maintain display boards and may post advertisements. Establishments primarily engaged in manufacturing electrical, mechanical, or plate signs and advertising displays are classified in SIC 3993: Signs and Advertising Specialties.

NAICS CODE(S)

541850

Display Advertising

INDUSTRY SNAPSHOT

Outdoor advertising was the first, and at one time the only, form of advertising in the world. By 1997, with the competing advertising media of television, radio, magazines, newspapers, and cable television, outdoor advertising — primarily billboards — made up less than five percent of total advertising expenditures in the United States.

Historically, outdoor advertising agencies have relied heavily on tobacco and alcohol advertising — at one point these accounts provided more than 50 percent of their revenue. However, in the past few decades outdoor advertising of these products has dropped substantially because of the public's increasing concern for health and safety.

With the decline in tobacco and alcohol advertising, outdoor agencies began to focus on attracting new business. Some advertisers were quite successful in doing so as the most popular billboard spaces, once dominated by long-standing tobacco contracts, became available. According to the Outdoor Advertising Association of America (OAAA), outdoor advertisers posted $1.4 billion in revenue in the first quarter of 2005, up 2.9 percent over the same period the previous year. This increase marked an 18 month trend of consecutive growth in the industry that was expected to continue into the late 2000s, as new technologies in outdoor advertising were being launched, including full-motion digital electronic billboards and signage with the ability to change copy almost instantly.

ORGANIZATION AND STRUCTURE

The outdoor advertising industry can be divided into two major classifications: on-premise and off-premise. On-premise advertising basically entails the use of signs to identify a business establishment. Off-premise advertising is a service in which outdoor displays are erected and maintained on property owned, leased, or controlled by a third party.

Off-premise outdoor advertising has generally been geographically subdivided — rural versus urban. The rural road sign tends to the immediate needs of the traveling public, such as food, fuel, and lodging. In urban settings, three kinds of off-premise advertising have historically been found. The first two, transit advertising and neighborhood point-of-purchase, have historically produced only a small volume of business, although by the late 1990s, the industry had begun to fully utilize advertising on mass transit buses, subways, taxicabs, and more. The third category of off-premise advertising — called a standardized medium, but better known as a billboard — has dominated the outdoor industry.

Bulletins are the largest kind of billboards and can be found in three sizes: 14 feet by 48 feet, 10.5 feet by 36 feet, and 20 feet by 60 feet. Usually these boards are found on interstate highways. The traditional billboard, sometimes called a 30-sheet, runs 12 feet by 24 feet and has been used for niche marketing. Relatively new to the industry has been the eight-sheet billboard, measuring 6 feet by 12 feet. Previously found in highly dense areas with limited space, eight-sheets are being used in suburban communities and have been especially popular for regional and ethnic marketing. At an average price of $100 to $150 per board in the 1990s, eight-sheets were significantly less expensive than the traditional posters, which sold for an average of $500.

New, technologically-advanced boards have also begun to show up in outdoor advertising. One example has been the Premier panel, created by Patrick Media Group. This type of board offers improved graphics by printing ads on vinyl using computer technology. The Premier panel also has 30 percent more space than a traditional 30-sheet because it stretches the advertisement around the board rather than...

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