The following is excerpted from a pamphlet that was published in 1983.
As a member-service project, the National Electric Sign Association (now the International Sign Association) has teamed up with a well-known researcher to produce a 22-page study that underlies the importance of the on-premise sign. Here is an encapsulation of Ray Anderson’s findings, which were originally published as articles in Signs of the Times’ magazine’s February, March and April 1977 issues.
The economic importance of the on-premise sign is, in one sense, the premise that underpins the industry. The foundation on which sign companies have built their futures is largely structured on their ability to convince business of this fact. In the mid 70’s, several studies  were conducted to determine the actual economic impact of the on-premise sign. Now, for the first time, those four public-opinion surveys have been considered collectively by one of this country’s foremost sign-industry market researchers.
Ray Anderson’s conclusions statistically substantiate many of the same arguments that sign-company operators have been making for years. At the same time, the report documents the fallacy of the public’s negative view of signs (as claimed by the “vocal minority”) and lobbies against the clear and present danger of over restriction.
3M’s former research expert draws from his years of experience in the field and provides a perspective — or rather, perspectives — that support the sign industry by employing data derived from both business owners and their customers. According to Anderson, the consolidated results of four public-opinion surveys show that 77.4% of the 2477 respondents rate the on-premise sign as “very important” when shopping for specific products or services. While traveling or in an unfamiliar environment, that figure leapfrogs to 95%. Even more importantly, from a legislative point of view, 82.1% of those surveyed approved the appearance of the sign.
These figures mirror the view business owners hold about their primary identifications. From a cross section of 283 businesses, 76.3% of those business owners believed their on-premise signs to be “very important,” with only 2.1% saying it was “not important.” If their sign was removed or substantially altered — often times the goal of an over-restrictive code — 67% of those business owners stated this would greatly reduce business volume.
 The four public-opinion studies were conducted in Naperville, IL, Corpus Christi, TX, Palo Alto, CA, and Lubbock, TX. Two were conducted exclusively by National Research Service of Bedford Park, IL, a division of the 3M National Adv. Co. The author, before retirement, was the managing director of National Research Service. The other two surveys were conducted jointly by National Research Service and the Institute of Signage Research under the direction of Dr. R. James Claus.
Small businesses — those reliant upon their signs as their only form of communication — logically showed a greater concern in this area, says Anderson. Indeed, the local, independent-business operators, those competing with the nationally recognized chain retailers, are at a “competitive disadvantage.”
Consolidated Results of Four Public-opinion Surveys on the Importance of On-premise Signs to the Public When Shopping for Specific Products or Services
|Type of Business||Very Important (%)||Not Important (%)||Total (%)|
|4. Shopping Centers||62.3||37.7||100.0|
|5. Home Improvement Stores||61.2||38.8||100.0|
|6. Fast Food Restaurants||84.2||15.8||100.0|
|7. Sevice Stations|
|a. At home||61.2||32.8||100.0|
|b. On a trip||95.0||5.0||100.0|
|8. Auto Dealers||77.3||22.7||100.0|
|9. Furniture Stores||83.5||16.5||100.0|
|10. Garden Supply Stores||61.2||38.8||100.0|
|11. Hardware Stores||71.8||28.2||100.0|
|12. Floor Covering Stores||92.9||7.1||100.0|
|13. Clothing Stores||73.6||26.4||100.0|
|14. Discount Stores||79.1||20.9||100.0|
|16. Drug Stores||77.6||22.4||100.0|
|17. Liquor Stores||82.6||17.4||100.0|
|18. Builder Supplies||78.5||21.5||100.0|
Recall of Specific On-premise Signs in the Respondents’ Area, and Attitudes Toward These Individual Signs
|Type of Business||Recall Seeing Sign (%)||Useful Type Sign (%)||Approve Appearance (%)|
|3. Shopping Center||77.0||67.8||80.0|
|4. Fast Food Restaurant||72.7||81.0||80.8|
|5. Service Station||45.4||80.9||85.6|
|6. Auto Dealer||69.7||78.7||77.5|
|7. Furniture Store||38.6||71.9||80.4|
Business Owners’ Attitudes Toward Their On-Premise Signs
|Sign Type||Very Important (%)||Average Importance (%)||Not Important (%)||Totals (%)|
|Note: These are the composite results gained from 283 interviews with business owners in three communities where sign ordinances were being considered.|
Business Owner’s Opinion of the Impact to its Business that Would Result if Signs Were Removed or Substantially Altered
|Would greatly reduce sales volume||67.0|
|Would reduce sales volume somewhat||20.8|
|Would have no effect on sales volume||12.2|
Population of the Primary Mobile Market for a Location on Beach Boulevard Near La Palma in Buena Park, CA (Orange County)
|1. Average Daily Traffic Count||44,000 Vehicles|
|2. Accumulation in 30 days||1,320,000 Vehicles (households)|
|3. Trip frequency for vehicles passing this location in a 30-day period – in either direction||20 Trips per household|
|4. Number of different households represented in this traffic stream (the Primary Mobile Market)||66,000 Different households|
a. ADT information from State of California, Department of Transportation, Division of Traffic Engineering.
b. Conversion of vehicles to households assumes that 2.0 occupants of each vehicle represent an Orange County household.
c. Trip-frequency factor is an average taken from 25 origin and destination studies conducted by the 3M National Advertising Company.
Relative Advertising Weight Possible Using Two Local Newspapers and an On-Premise Sign Located in
Buena Park, CA, on Beach Blvd.
|On-Premise Sign at This Location||Orange County Metro Group Newspaper||Los Angeles Times Daily Newspaper|
|1. Population of the Primary Mobile Market (households)||66,000||66,000||66,000|
|2. Effective coverage of the Primary Mobile Market||%||100.0||32.0||24.0|
|3. Market not covered||–||68.0||76.0|
|4. Frequency possible||(A)||20||4||4|
|5. Advertising weight in Gross Rating Points||(A)||2,000||128||96|
(1) See Table V for calculation of this market.
Relative Advertising Weight Possible Using the Local Newspaper and On-Premise Sign Located on Coburg Road in Eugene, OR
|On-Premise Sign for a Business||Local Daily Newspaper|
|1. Population of the Primary Mobile Market at this location expressed in households||70,200||70,200|
|2. Effective coverage of the Primary Mobile Market||%||100.0||64.9|
|3. Market not covered||–||35.1|
|4. Frequency possible||(A)||20||4|
|5. Advertising weight possible expressed in Gross Rating Points
(2) Newspaper circulation and coverage per Standard Rate and Data for total market, and applied to this market.
(4) Normal business practice is to use the newspaper once per week (A). but the second plan (B) is shown assuming that an advertisement is scheduled every day.
The local independent does not have the multiple reinforcement of a national company’s identity. Its trademark is not immediately recognizable. If anything, the independent’s “challenge,” comments Anderson, “is to come up with a better on-premise sign that is able to communicate the information the public wants and needs . . . . Placing unnecessary and burdensome restrictions on what a local business can do with the on-premise signing in terms of size, shape, design, wording, graphics and other elements restricts that business’ ability to respond competitively in the marketplace.”
The competitive disadvantage of small business extends beyond the natural recognizability of a national versus a local company. Besides their signs, the large chains are able to build “top-of-the-mind-awareness” through extensive use of print and broadcast advertising. With few exceptions, small business cannot provide adequate market coverage through these options. The broadcast media for a mid-sized or large city are just that – too broad.
“The logical market of a given small business is a segment of this larger market,” Anderson states. It is a ‘”serious mistake” to think otherwise. Small businesses normally cannot afford to be so inefficient with their advertising and sales-promotion dollar. That budget must be channeled into what Anderson describes as the “primary mobile market.” This is not the total population of an entire city, but that segment of the population that passes by the location of a specific business. Anderson clarifies: “Rarely will a given business in a specific trade enjoy more than a 5% or 10% share of the market of this specific and clearly defined market segment of the entire geographic area. Yet anyone in that traffic stream . . . could logically and easily interrupt any of his or her trips and pull into this business location. Conversely, people living in larger markets, who do not have occasion to drive by regularly because they live in another section of the metropolitan market, are not logical market targets.” (See tables.)
Because small independents can’t really compete with the franchised chains, a “key objective” is to build awareness in the minds of the mobile market passing by the place of business. How is the business operator going to accomplish this? By advertising, states Anderson. Here’s the rub: “In the past, most peopie dealing with the subject of enacting on-premise sign ordinances have assumed that local print and broadcast advertising are: 1) totally effective in reaching the entire market of each local business; 2) equally affordable to every business in that market; and 3) able to put every small business on equal footing with larger competitors.”
For various reasons (most already mentioned), these assumptions are false, Anderson concludes. For example, in large and mid-sized markets, the advertising weight (in gross rating points) of a business’ on-premise sign is significantly greater than that of newspapers. (See tables.) And in most instances, radio and television have even shorter market reach than newspapers. “When we get down to the bottom line,” says Anderson, “the on-premise sign develops an enormous amount of advertising weight compared to other media, and the critical factor is the exposure achieved within the entire mobile market.”
Anderson concludes where he began — on the subject of legislation. “When there are valid and significant reasons for a community and its officials to consider the subject of sign ordinances,
everyone concerned should be fully aware of the economic implications of restricting such signage. When there is insufficient data available to indicate the need for regulation of on-premise signage, great care should be taken because the economic health of the community and its businesses are directly involved. The general public may also be adversely affected and they, after all, are what advertising, ordinances, and even cities are all about — people, and what’s best for them.”
About the Author
During his career, Raymond T. Anderson has conducted more than 500 research studies for applications relating to signs and advertising. Most of these studies were under the auspices of National 3M, which employed Anderson from 1968 until his retirement in 1979. The author acknowledges, with thanks to 3M for its cooperation in sharing the data obtained in the course of the various surveys. Recognition is also made of the efforts of Dr. R. James Claus, who also participated in the development of a number of surveys and compilation of responses.