Signs and Advertising Specialties

SIC 3993

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing electrical, mechanical, cutout, or plate signs and advertising displays, including neon signs and advertising specialties. Sign painting shops doing business on a custom basis are classified in SIC 7389: Business Services, Not Elsewhere Classified. Establishments primarily engaged in manufacturing electric signal equipment are classified in SIC 3669: Communications Equipment, Not Elsewhere Classified, and those manufacturing commercial lighting fixtures are classified in SIC 3646: Commercial, Industrial, and Institutional Electric Lighting Fixtures.

Industry Snapshot

A sign shop is an establishment that manufactures signs and advertising specialties. Sign shops are located throughout the country, with the greatest number of establishments located in California with about 2,235 in 2010. Traditionally, the largest number of shipments and greatest number of employees were clustered in the Midwest and eastern seaboard states, although that trend started to lag with the increased demand for electronic signs in the late 2000s. Furthermore, many sign shops expanded operations to serve a wider geographic base. This expansion was probably the result of a trend toward larger shops, whose greater output quantities and increased sales forces allowed them to serve larger areas.

The size of establishments ranged from single-person sign shops to multimillion-dollar corporations. In the late 2000s, an estimated 74 percent of sales were generated by fewer than 10 percent of all sign shops. This top-heaviness continued due to the increased volume of signs and the prevalence of quantity orders over custom or finely crafted work. The development of computer technology decreased the need for specialized skills and gave rise to rapid-sign franchises, which facilitated same-day construction of signs.

Total industry sales were valued at $11.9 billion in 2009, a figure that had increased steadily since the early 2000s. Electric signs accounted for the largest percentage of sales in this market. Moderately sized sign shops (those with between 20 and 100 employees) accounted for about 36 percent of total sales (approximately $4.2 billion) in 2009.

Throughout its history, the industry has fought against perceptions of signs as visual pollutants, which must be controlled or even banned except when conveying "vital information." These perceptions often were countered with new stylistic designs and aggressive government lobbying.

Background and Development

In the nineteenth century, signs and advertising displays were a common sight in both residential neighborhoods and commercial areas. Because electronic media was not yet developed, outdoor advertisements played a more crucial role in name recognition than they do today. Advertisements were often painted on empty brick walls, storefronts, or barns. The growth of cities reduced the amount and visibility of available space and necessitated free-hanging signs made of wood or metal. The advent of the automobile also increased the amount of road and traffic signs.

The public perception of advertising signs as eyesores was slow to develop. If it existed at all in the first half of the twentieth century, it was certainly not evidenced by the popularity of such cultural icons as the Burma Shave signs. With the ascendancy of television, the use of signs as part of nationwide advertising campaigns diminished.

Regulation and zoning were recurring trends throughout the latter part of the century. Long considered the province of local governments, limitation of signs became a federal issue during the Johnson administration, with the passage of the 1965 Highway Beautification Act. Additionally, in 1990, the introduction of the Visual Pollution Control Act by Republican Senator John H. Chafee of Rhode Island, which made it easier for governments to compensate owners, reflected a national desire to remove many highway signs. Under this legislation, funds earmarked for highway construction and maintenance were to be used for sign removal. Up to $428 million was allocated to the Federal Highway Administration to compensate sign owners who had erected signs before laws were passed that made them illegal. Federal regulation of sign display has been opposed by active lobbying, as well as by publications such as The Wall Street Journal. For the most part, control of sign proliferation remained on the community level. The potential negative impact to the industry caused by the reduction of advertising signs was offset by an increased demand for signs of other types.

Electric Signs and Luminous Tubing.
At the end of the nineteenth century, luminous signs were a new phenomenon. The hazardous and expensive gaslight method of lighting quickly gave way to electricity. In 1898, Sir William Ramsay and Morris William Travers discovered neon. In 1910, French physicist Georges Claude experimented with sending an electric discharge through a neon-filled tube. The charge produced a bright red light whose color and luminosity could be modified by altering the current. The subsequent development of luminous tubing using inert gases provided a relatively safe method of lighting. Though too expensive for general purposes, its brightness made it ideal for advertising and other special uses. Increased production of hydroelectric power under the Roosevelt administration lowered the cost involved in electric sign manufacture and use and expanded the use of neon as an advertising tool and as an art form. Two of the best-known locales where neon is used, Las Vegas and the Times Square area of New York, were developed during this neon heyday of the 1930s and 1940s. Artkraft Strauss Co., the original manufacturer of virtually all Broadway's electric signs, continued to be the major supplier for the area for decades. The company also redeveloped and renovated signs that were considered historic landmarks (such as Times Square's famous Coca-Cola sign).

Neon reached the peak of its popularity in the 1950s. Regarded as an example of the opulent decadence of the previous generation, it gave way to inexpensive plastics as the advertising medium of choice during the 1960s. Electric signs in general, however, continued to thrive. Electric advertising displays with moving mechanical parts proved to be attention-getting point-of-purchase devices. Computer software also allowed the programming of changeable messages on road signs, advertisements, and architectural signs.

The industry was also spurred by changes in signs on roadways and other public places. As travel became easier and tourism from non-English-speaking countries grew, a trend toward universal symbols to replace or augment public signs increased demand. The National Park Service was at the forefront of the movement to make recreational signs easier to read.

The most important development in the industry in the late twentieth century was the introduction of computer technology into the manufacture of signs and displays. The ability to program sign design and manufacture through software greatly reduced turnaround time, often to less than a day. It also increased quantitative capabilities and reduced the amount of craftsmanship necessary in production. At the same time, however, there was a resurgence of hand craftsmanship in sign making, perhaps in response to the stylistic standardization caused by computer technology. Major consumers such as Disney and MGM ordered signs made of ornately hand-carved gold leaf. In addition, neon regained much of its former popularity.

Another important industry development was the response to the Americans With Disabilities Act (ADA). Its enactment in 1992 required that all public buildings display architectural signs (including exit signs, emergency instructions, and elevator signs) that are readable by disabled persons, including the blind and visually impaired. In practice, this entailed creating signs with raised characters at least three inches high that were accessible by touch. Because many architectural signs were originally engraved, replacing them with raised-letter signs necessitated complete retooling. However, businesses were slow to enact the required changes, and the federal government did not strongly enforce them. In the absence of a test case, the government was unwilling to provide its own interpretation of the act, so businesses, building managers, and architectural firms were uncertain as to exactly what changes were required. By the mid-2000s, the industry still had no clear-cut direction from the federal government.

Two of the most significant trends in the industry in the mid-2000s were the increased demand for bilingual signs and shared electronic billboards. With shared advertising, companies paid a lower fee than typically commanded for a billboard but shared the space with up to ten other companies, as the ads rotate continually. Clear Channel CEO Paul Meyer told Adweek that "we're selling time instead of space." The changing signs also offered advertisers the ability to change the message more frequently, something harder to do in traditional billboard advertising.

LED Signs.
While neon was still popular, the Signs of the Times 2006 Light Survey revealed that light-emitting diode (LED) lighting had dimmed the illumination share of neon for a third consecutive year. LED usage hit a high of 14.7 percent in 2006, with neon falling to a record low of 34.1 percent. LED lighting had been at 10.4 percent in 2005, when neon preference was at 39.7 percent. Fluorescent lighting remained a steady favorite among illuminated sign products at 44.5 percent in 2006.

Current Conditions

In the early 2010s, sign makers--especially those of electric and neon signs--dealt with increasingly stringent regulations from the federal and local government as well as pressures from environmental groups such as the Dark-Sky Association, which lobbied to decrease the "light pollution" created by electric signs. Traditional sign-makers were not exempt from the trend toward tighter restrictions and legislation: The Environmental Protection Agency (EPA) planned to require, all facilities that use spray paint with hazardous elements to train and certify their employees in the use of these products with a target implementation date of 2011.

To deal with these types of issues, the International Sign Association (ISA) created the Energy Subcommittee and the Environmental Subcommittee, and chairperson Troy Crocker noted the green movement's importance in the sign industry in the ISA's July 2010 Monthly Report. One of the trends the ISA was investigating was the use of solar power as a source for lighted signs, although Ed Shenker of PVI noted "We don't believe solar-powered signage will ever replace traditional signage" because it was "made for a specific opportunity." Other environmentally compliant measures the ISA was considering in 2010 involved using new types of LED lighting, new paints and adhesives that were low in VOCs (volatile organic compounds), and recycled materials.

LED lighting represented the fastest-growing technology in the sign industry in the early 2010s, and new applications and technologies contributed to its growth. The Glowrite Write-On Write-Off Illuminated sign, for example, allowed business owners to write their message on the surface of the sign, which was then illuminated by LED lights in a choice of seven different colors. To change the sign, users simply wiped off the previous message and wrote a new one.

Industry Leaders

One of the industry leaders in the early 2010s was Clear Channel Outdoor Holdings, Inc. of Phoenix, Arizona. The company had 840,000 display spots in the United States in 2010. Its parent company, CC Media Holdings Inc., had 29,000 employees and 2009 sales of $5.5 billion. Phoenix, Arizona-based CBS Outdoor, a subsidiary of CBS Corp., was another one of the largest makers of billboards and other outdoor media displays in the world. Annual sales for CBS Outdoor in the mid-2000s were around $2.0 billion. Lamar Advertising Company of Baton Rouge, Louisiana, rounded out the top three billboard operators with sales of $1.0 billion in 2009.

Workforce

The industry as a whole experienced reductions in total number of employees, payroll, and production workers in the 1990s, partly due to increased automation. On the other hand, sales per employee increased, which indicated that many companies were focusing on streamlining their work force and on outsourcing. After falling from approximately 89,000 in 2000 to about 80,000 in 2005, employment numbers held fairly steady throughout the rest of the decade, even increasing to 82,495 in 2008.

Research and Technology

American industry started the revolution in computer-aided sign making in 1983. The most important innovation gave an operator the ability to key instructions to a CAD-based knife plotter, an instrument that cuts a pressure-sensitive design (such as a logo or lettering) from a sheet of perforated vinyl. This vinyl substrate (the material on which the actual sign information is contained) could then be attached to a signboard or directly to another surface, such as a store window or truck door.

Most large and mid-sized sign companies had computerized systems, and by the 1990s, up to 90 percent of hand lettering jobs had been taken over by computers. Startup costs for computer systems ranged from $6,000 to $35,000, but the increased speed of production reduced turnaround time and employee hours. Orders that previously took six weeks to complete were now done in a single day. The demand for quickly made signs spawned a number of rapid-sign franchises. Fastsigns, a national vinyl-graphics franchise, had 165 stores nationwide in mid-1992. By 2000, it had expanded into the industry's leading quick sign and graphics franchise with 420 stores in the United States and abroad, including the United Kingdom, Canada, Mexico, Argentina, Brazil, and Columbia. In Australia, the company was known as Signwave.

Advances in the area of luminous sign manufacture served primarily to increase safety. A solid-state transformer was developed that replaced the core-and-coil construction previously used in neon lighting.

In response to a growing public concern over the rights of disabled people, a "talking sign" was developed to help satisfy the requirements of the Americans with Disabilities Act. This small, hand-held device, when pointed in the direction of a sign, activated a sensor that converts the sign's information to a voiced message. The talking sign's limitation was that it only worked with signs equipped with the sensors. However, it had applications in public arenas, government offices, rapid rail systems, and other large venues.

Into the second decade of the twenty-first century, the sign industry continued to apply new technology to update and personalize signage. In Japan, for example, digital billboards could discern a passerby's age and gender and adjust messages accordingly. According to a spokesperson quoted in Brandweek, "The camera can distinguish a person's sex and approximate age...if he or she looks at the screen for a second." In North Carolina, advertising agency Birdsong Gregory created a scented billboard for Lion Food LLC to promote a new line of meats. The sign, which featured a picture of a "appetizing slice of beef," as stated in Private Label Buyer, emitted scents of grilled steak to commuters during the morning and evening rush hours on the River Highway in Mooresville, North Carolina.

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