Academic journal article Monthly Labor Review

Occupational Trends in Advertising, 1984-90

Academic journal article Monthly Labor Review

Occupational Trends in Advertising, 1984-90

Article excerpt

As employment in advertising grew during the 1980's, the industry's occupationalpattern changed; professional and technical occupations lost employment share, while sales occupations gained

Like so many other industries, the advertising industry felt the impact of the mergers and acquisitions prevalent in the 1980's. Outside the industry, takeovers created debt-ridden businesses that were forced to tighten their budgets. Many firms accomplished this by cutting their advertising expenditures. To advertising executives, reduced spending translated into declining revenues for their agencies. Meanwhile, many of these executives were already burdened with debts their own agencies had incurred through mergers within the industry. Cost management became a primary concem for agency managers.

These and other economic changes that affected the advertising industry during the 1980's were reflected in changes in the industry's occupational structure. While industry employment increased by 26.5 percent from 1984 to 1990, occupations showed proportionately different employment patterns. For example, the number of workers in sales and related occupations in the industry grew 57 percent during the period, and employment in managerial and administrative occupations increased 36.5 percent. Professional, paraprofessional, and technical positions, however, showed a much slower growth rate, increasing only 11.5 percent.

To analyze occupational staffing patterns in the advertising industry during the 1980's, this article uses data derived from the 1984, 1987, and 1990 Occupational Employment Statistics (OES) surveys. The OES survey is a Federal-State cooperative survey of nonfarm establishments designed to develop current occupational employment data on wage and salary workers by industry. The survey is conducted over a 3-year cycle: manufacturing industries and hospitals are surveyed during the first year; mining, construction, finance, and service industries during the second; and trade, transportation, communications, public utilities, education, and government services industries during the third. The survey is based on a probability sample and is stratified by industry, geographic area, and size (number of employees) of the firm?

Industry developments

The advertising industry comprises establishments that prepare advertising and then place it in various media (for example, television, radio, magazines, and newspapers) for other business establishments. Firms engaged in soliciting advertising for different publications or for television or radio stations on a fee or contract basis and firms that furnish other advertising services, such as aerial advertising, distribution of coupons, and distribution of handbills, are also included in the industry. However, businesses primarily involved in direct mail advertising and those that create advertising but do not place it with media are not part of the industry.(2)

Advertising agencies dominated the industry, employing 72 percent of all advertising workers in 1990. The remaining employment was in outdoor advertising services (6 percent); radio, television, and publishers' advertising representatives (10 percent); and miscellaneous advertising services (12 percent).

From 1984 to 1990, Advertising Age's annual "Advertising Agency Income Report" showed a continual rise in total worldwide income for each year's top 500 U.S.-based advertising agencies. In 1984, the top 500 agencies had a gross income of $7.13 billion, earned on billings of $48.44 billion. (Advertising agencies bill clients for numerous items connected with an advertising campaign--for example, actors' and musicians' services, the services of outside professionals and technicians, network fees, and props. Then, after paying for all these, the agencies charge an additional fee for their labor, and this fee is recorded as their gross income.) In 1987, the top 500 agencies reported a gross income of $9. …

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