SIC 7319 Advertising, Not Elsewhere Classified

SIC 7319
ADVERTISING, NOT ELSEWHERE CLASSIFIED

This classification covers establishments primarily engaged in offering advertising services, not elsewhere classified, such as aerial advertising, circular and handbill distribution, distribution or delivery of advertising material or samples, and transit advertising. Establishments primarily engaged in direct mail advertising are classified in SIC 7331: Direct Mail Advertising Services; those that write advertising copy, but do not place the advertising with media, are classified in SIC 8999: Services, Not Elsewhere Classified; and those that provide services in commercial art, graphics, or other creative advertising services, but do not place the advertising with media, are classified in SIC 7335: Commercial Photography or SIC 7336: Commercial Art and Graphic Design.

NAICS Code(s)

481219 (Other Nonscheduled Air Transportation)

541830 (Media Buying Agencies)

541850 (Display Advertising)

541870 (Advertising Material Distribution Services)

541890 (Other Services Related to Advertising)

The advertising services offered by this industry include coupon distribution; display service, except outdoor; independent media buying services; poster advertising, except outdoor; distribution of product samples; shopping news advertising and distribution; and sky writing. Approximately 2,246 establishments operated in this industry in 1998, employing 45,500 workers. Leaders by sales volume in the late 1990s included LM Berry and Company, SFM Media Corporation, and Heritage Media Corporation.

Historically, one of the most active sectors of this industry has been media buying services. These companies are independent of traditional advertising agencies and serve their clients only by purchasing media. Responsibilities of media buyers include monitoring media space and purchase availability; verifying the accuracy of ads placed; and calculating rates, usage, and budgets. These services charge 3 to 5 percent of the cost for the ad, as opposed to the traditional 15 percent charged by agencies.

As clients have become more cost-conscious, many have bypassed the traditional advertising agency and moved to independent companies to make their media purchases. For instance, more than 22 percent of the 201 agency executives responding to a 1992 Advertising Age Beta Research Corp. survey reported that their clients use independent media services. As of 1998, media buying services handled 6 percent of all advertising.

Western International Media led this industry with more than $2.3 billion in media billings in the mid 1990s. Since 1989, many accounts have moved to independent media services like Western International. These include the $90-million American Isuzu Motors account, the $90 million Nike account, the $70-million Reebok International account, and the $50-million Bally account. In 1996, this trend continued when Bell South Corporation awarded its $185-million plus account to Western International Media. Efficiency of service and the power of media buying consolidation have been two reasons cited for the switch to independents.

Promotional items and services make up another active segment in this industry. This segment has been especially successful in grocery stores. In the past, marketers of packaged goods have used kiosks that dispense coupons, along with advertising on supermarket floors and shelves to promote their products. The industry, however, has been developing a new generation of promotional services that capitalize on technology. In 1997, for example, J.C. Penney, Toys "R" Us, and Boston Market offered coupons from an Internet site called Cool Savings. Developed by the Interactive Coupon Network (ICN), customers retrieved proprietary printing software that allowed them to customize and print their own coupons locally. Encoding assured that coupons were authenticated. McDonald's and Domino's participated in another online experiment called Smart Save in 1997. Using the Internet and a "smart" card, consumers visited the Smart Save site, browsed for coupons, and transferred the information to the "smart" card for later use.

Transit advertising was expected to be another growth area for the industry. Gannett Outdoor Group operates transit displays in six major markets including New York and Los Angeles. Gannett's subsidiary in Canada, Toronto-based Mediacom, also has predicted a growing market for transit advertising and recently added about 500 new travel shelters throughout Canada. In 1996, Outdoor Systems of Phoenix agreed to buy Gannet Outdoor Group for $690 million. Meanwhile, Patrick Media Group operates bus shelters in Orange County, California and Miami. The company also provides transit advertising in the Bay Area Rapid Transit (BART) system throughout the San Francisco Bay area. Patrick Media was sold in 1995 to Eller Media for $518 million.

Advertising employment was expected to grow rapidly through the year 2006, due to increased competition between other industry competitors and the need for more effective marketing.

Further Reading

Bugge, Bary. "Media Buying Services." Screening for Profit Digest, 3 July 1998.

Cleland, Kim, and Chuck Ross. "Bell South Makes $185 Million Call to Western International Media." Advertising Age, September 1996.

Darnay, Arsen J. Service Industries USA. Detroit: Gale Research, 1999.

Dun's Census of American Business 1995. Bethlehem, PA: Dun & Bradstreet Corporation, 1995.

Hudis, Mark. "All the Signs Point Up." Mediaweek, July 1996.

LaMonica, Paul R. "Double Discount." Financial World, June 1996.

Media Buying Services. Cool Fire Technology, 2000. Available from http://www.cftech.com.

Scally, Robert. "Cybercoupons Open the Door to One-On-One Marketing." Discount Store News, November 1996.

U.S. Department of Labor. Bureau of Labor Statistics. Employment Statistics. 2000. Available from http://www.bls.gov.

U.S. Department of Labor. Bureau of Labor Statistics. 1998-99 Occupational Outlook Handbook, 2000. Available from http://stats.bls.gov.