History of Advertising Research Paper

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Colonial American Advertising

Advertising appeared in America in pamphlet and signboard forms. Pamphlets, which were popular, explained in depth what was available. Signboards, on the other hand, resembled in design those used in England. Most of the time, these signs contained symbols as well as addresses, which consisted of brief copy, not numbers. Although these signs were popular among businesses throughout the colonies, the most colorful appeared in cities such as Philadelphia and Baltimore. Signs for taverns were the most visible.

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In the early 1700s, John Campbell was a postmaster in Boston and knew several important politicians. Using his position and his friends, Campbell eventually asked the authorities to grant him permission to publish a newspaper. The first Boston News-Letter was dated “From Monday April 17 to Monday April 24, 1704,” and was printed on an 8” × 12” sheet of paper. Copy appeared in two columns on the front and back. Rough in appearance, the News-Letter contained news from newspapers published in London. Often the news was out of date. Advertising received a maximum space of 20 lines. The cost per agate line was about 1.5 cents.

The third News-Letter, dated May 1 to May 8, 1704, contained the first paid ads. Although there were three ads, together they occupied only 4 inches of space in one column. The word advertisements separated them from the news. Two advertised rewards for the capture of thieves; the other advertised real estate.

As Campbell’s paper continued, other kinds of ads appeared, including those for slaves. However, advertising was restricted; even after 3 years, 5 inches devoted to advertising was rare. Some issues were devoid of any advertising whatsoever.

On December 21, 1719, in Boston, William Brooker published the Boston Gazette. The following day, in Philadelphia, Andrew Bradford published the American Weekly Mercury. Both newspapers were similar to the News-Letter in size and typography. Even the ads were similar, except that Brooker employed brief headlines that actually identified what the various ads concerned.

Two years later, Benjamin Franklin, who was 16, became the editor of Boston’s New England Courant, which James Franklin, his older brother, had published. James had published controversial political essays and was arrested. Benjamin printed the word Advertisements in bold capital letters and separated it from the copy. The word attracted attention. Franklin’s editorship ended 2 years later, and he moved to Philadelphia.

Franklin worked for Samuel Keimer, who published the Universal Instructor in All the Arts and Sciences and Pennsylvania Gazette. Franklin, with the help of a friend, purchased the paper and immediately shortened the name to Pennsylvania Gazette. He improved the writing and typography. Within several months, the paper was considered one of the most attractive newspapers in the colonies.

Advertising in the Gazette was important to Franklin. In the September 25 to October 2, 1729, issue, he printed the word Advertisements in bold letters, then left about a 1/2 inch of white space. The issue contained nine ads. The first letter of the first word of each ad was capitalized. In addition, each ad had at least a 1/2 inch of white space above and below it.

Franklin increased the number of pages from two to four so he could handle more ads and news stories. He separated each ad with white space. He used at least a 14-point heading for each ad. Later, he incorporated small stock cuts or illustrations. In the May 23 to 30, 1734, issue he employed a stock cut of a ship for the Three Batchelors, which had docked. The ad informed merchants that the ship was accepting freight. Franklin realized that illustrations could enhance an ad, so he used half-column and column cuts made especially for certain advertisers. Readers could determine for whom or what the ad was merely by the illustration. Retailers who normally stayed away from advertising in newspapers realized that they could increase sales by advertising in Franklin’s newspapers. As a result, Franklin had to enlarge his newspaper again. Instead of two short columns, he put in three deep columns, which made the newspaper about the size of a modern tabloid.

Franklin published ads for slaves, personal items lost or stolen, and goods for sale, including Poor Richard’s Almanack, which he wrote and published.

On November 5, 1733, John Peter Zenger published the first issue of the New York Weekly Journal. However, Zenger criticized the provincial government and was arrested for libel. His lawyer, Andrew Hamilton, orchestrated a masterful defense, and Zenger was found innocent. Zenger’s newspaper was superior to Bradford’s. The New York Weekly Journal contained 8 to 10 ads, while the Gazette contained 2. In addition, Zenger used column rules to separate ads, and he did not restrict advertising to a particular amount of space. One ad was more than a half-page deep. Like Franklin, Zenger realized the importance of illustrations and used various cuts to improve the appearance of certain ads.

One of the most innovative newspapers in the mid-1700s was the New York Post Boy, which was founded by James Parker in 1742. Parker, who had apprenticed in Franklin’s print shop, received financial support from Franklin. Originally titled the New York Gazette, Revived in the Weekly Post Boy and later, Parker’s New York Gazette, or the Weekly Post Boy, the newspaper existed until 1773.

Ads in Parker’s paper occupied as many as six columns, or half of the paper. Ads were for real estate, slaves, runaway apprentices, books, wines, medicines, and lotteries. Headlines were capitalized in typesizes of 10 point, sometimes 14 or 18 point.

By 1760, type sizes and typefaces varied within most ads. Headlines were at least 18 point. Display ads filled the columns. The newspaper became so successful among advertisers that ads filled three of the four pages. Parker’s paper was probably the first in the American colonies to devote the entire front page to advertising.

The Pennsylvania Packet and the General Advertiser, which had been founded in 1771 by John Dunlap, illustrated how advertising could help sell newspapers. Dunlap realized the importance of how an ad looked. As a result, the ads in his paper were easier to read and attracted reader interest. Dunlap’s newspaper featured commercial news, too, rather than political stories. Commercial news attracted merchants. Thus, he was able to attract those who needed to advertise. He revived the illustration; special cuts were created for certain advertisers. Within 2 years, Dunlap’s newspaper was so successful that he had to enlarge its size and increase its columns. Advertising accounted for twothirds of the paper’s content. In 1784, the paper, which had started as a weekly, became the first daily to be published in America, primarily because of the amount of advertising Dunlap received.

Another daily appeared a year later. Published in New York by Francis Childs, the New York Daily Advertiser contributed to advertising by running headlines as big as 36 point. These headlines, usually one word, were printed in bold to capture attention.

By 1800, the number of newspapers published in the United States was about 300. Most publishers were satisfied with their advertising. Few actually worried about how ads appeared. Thus, advertising remained constant in appearance for numerous years. In most cases, no more than one cut illustrated each ad. The copy was dull and usually small in size.

The Penny Press and Advertising

Benjamin Day started the New York Sun in 1833. By the second year, the paper was selling 20,000 copies. The large circulation made it a popular medium for advertisers.

Day wrote most of the copy, which consisted of 10 lines or less, for the ads. He realized the importance of the want ad, which advertisers in London had used. He solicited these small ads from businesses and readers and placed them under the heading “Wants.” Day also published ads for theaters and museums. Day had to increase the paper’s page dimensions as the number of ads increased. In 1835, James Gordon Bennett founded the New York Herald, which, like the Sun, presented news of every type. Eventually, the Herald surpassed the Sun in circulation, and Bennett was more creative than his rivals in dealing with advertisers. Like the Sun, the Herald catered to merchants and manufacturers by the kind of news stories printed. Ads were separated by lines but contained no boldface headings.

Most ads carried little, if any, illustrations. Most ads were similar to want ads. They contained small first-line headlines, small amounts of copy, and thumbnail illustrations that identified businesses.

In 1836, Bennett’s Herald published a two-column ad that contained a two-column illustration for the American Museum. The Herald and other New York newspapers published two-column ads, some with illustrations. In the late 1840s, advertisers who placed small ads complained to the publisher of the Herald about the few advertisers who placed large ads. The publisher banned all display ads. The paper’s advertising columns looked the same and, consequently, unappealing.

In the 1850s, Robert Bonner purchased the Merchants’ Ledger, a business sheet, and changed its name to the New York Ledger. Although he did not accept advertising at first, he made advertising history by publishing stories that appealed to women, which resulted in women becoming more interested in reading stories in newspapers and in ads directed to women. Bonner advertised his paper in other newspapers. He allowed display ads; he experimented with copy and typography, which caused other publishers to do the same. His paper soon had a circulation of 400,000.

Bonner’s paper soon went to two-columns with reiteration, then to a full page. Some of his ads included a line being printed more than 600 times. His methods had an immediate effect on advertising.

The First Advertising Agencies

The advertising agency in the United States developed in the 1800s. According to Ralph M. Hower (1949), advertising agencies passed through four stages before N. W. Ayer & Son was founded. The first stage was the newspaper agency, which was inaugurated by Volney B. Palmer, who represented newspaper publishers. The second stage occurred in the 1850s, when agents became independent. Space jobbing, as this stage was called, became popular as agents realized that they could earn more by selling space to advertisers. This stage caused many agents to question their role. After all, they did not work for publishers, and they did not work for advertisers. Yet they referred to themselves as agents. The third stage developed out of the second when George P. Rowell purchased large amounts of space in newspapers and then resold it in small amounts to advertisers. This stage, which has been called space wholesaling, began in 1865. The fourth stage was based on Rowell’s idea and appeared in the late 1860s. Called the advertising concession agency, this stage occurred when Carlton & Smith (later the J. Walter Thompson Company) purchased most—if not all—of the advertising space in certain publications for a specified period of time. Consequently, the agency, not the publisher, was responsible for securing advertisers for the entire publication. This practice actually closed the gap between agent and publisher, but the agent worked as an independent middleman nonetheless.

Volney B. Palmer

Volney B. Palmer, who had offices in Boston, New York, Baltimore, and Philadelphia, was a pioneer. He was the first advertising agent, and he represented more newspapers than did other agents of his day. In addition, he promoted advertising as an integral part of marketing and produced as well as delivered ads to publishers.

Palmer was born to Nathan and Jerusha Palmer in Wilkes-Barre, Pennsylvania, in 1799. His father, a lawyer who held several political positions in Wilkes-Barre, moved his wife and six children to Mount Holly, New Jersey, in 1818, where he published the Burlington Mirror, a newspaper on which every member of the family worked. He changed the name of the newspaper to the New Jersey Mirror and Burlington County Advertiser about a year later. The newspaper continued to be popular among readers and advertisers, even after Nathan’s death in 1842, when it was published by his widow and then his daughter, Eliza.

Palmer and one of his four brothers moved to Pottsville, Pennsylvania, in 1830, where he invested and worked in real estate. In 1841, after he married, Palmer moved his family to Philadelphia, where he attempted to sell real estate in an economically depressed city. By 1842, he had added a coal office as well as an advertising business to his real-estate venture.

Palmer remained in real estate for the next several years, even though his advertising interests were fruitful. In 1849, he used “Advertising Agency” in an ad for the first time. He claimed to be the sole representative of 1,300 newspapers. This, Palmer realized, allowed advertisers to be selective. In addition, Palmer created speculative presentations for these prospective advertisers. The advertiser was informed of the total cost, not just the space rates for each newspaper selected. Palmer received a 25% commission from the publisher on payment. The commission system is used today, except that agencies usually receive 15%, not 25%.

Palmer’s agency provided more services than most agencies at the time. He promoted his services by using endorsements from publishers. According to Donald R. Holland (1973, p. 108), Palmer “urged business men to use advertising on a regular basis, to use it to develop new markets, to take advantage of the flexibility of advertising to specific regions or in specific seasons.”

By the mid-1850s, Palmer was considered by numerous clients as a godsend, and his agency grew. He opened four offices in four major cities. He maintained the office in Philadelphia and hired others to manage the other three. He visited the other offices at various times throughout the year.

In the late 1850s, John E. Joy, W. W. Sharpe, and J. E. Coe became partners. When Palmer retired in the early 1860s, Joy and Coe operated the Philadelphia and the New York offices, respectively. The latter office was eventually purchased by W. W. Sharpe. The office in Boston was controlled by S. R. Niles.

George P. Rowell

George P. Rowell was born in 1838 in Concord, Vermont. When he was a teenager, he moved with his parents to a farm outside Lancaster, New Hampshire. At 17, he went to Boston to find work. He taught school for several years, then worked in a store. Eventually, he found employment with the Boston Post, for which he sold space to advertisers.

Rowell married Sarah Eastman in 1862. Although he earned enough to support his family, he created a theatrical playbill in 1864, for which he sold space to advertisers. He continued the playbill for several weeks and netted a comfortable profit.

In 1865, he left the Post and opened an advertising agency with his friend Horace Dodd. They devised a “list system” of newspapers for advertisers to consider. Unlike Palmer, they purchased large quantities of column space from these newspapers, then sold the space in small quantities to advertisers. In short, they purchased space at wholesale, then sold it at retail. They persuaded certain publishers to give them a discount based on continued patronage. The agents received an additional 3% off the card rate if they paid in cash within a 30-day period. The agents did not have to pay more than 25% of the card rate for most of the newspapers they handled. Rowell’s “list system” became instantly popular and was adopted by other agencies.

Rowell and Dodd started the Advertisers’ Gazette, a house organ that promoted advertising and the agency.

Rowell sold the agency to Dodd in 1867 and moved his family to New York, which had become the most important commercial city in the nation because of its location. Rowell established the agency George P. Rowell and Company and continued using the “list system.”

Rowell made an effort to make sure that the circulation figures claimed by publishers were accurate. Rowell realized that if his agency could supply exact figures to advertisers, then advertisers would know how much to pay for the space they purchased.

Rowell continued to publish the Advertisers’Gazette, and in 1869, as a service to prospective advertisers, he published the first volume of Rowell’s American Newspaper Directory, which listed more than 5,000 newspapers in the United States, more than 300 in Canada the agency handled, and, of course, various advertisements, which defrayed part of the publication cost. Although Rowell had tried to eliminate so-called private lists, he was criticized by other agents for making available at a nominal cost more information than they offered. Rowell was also criticized by publishers for printing conservative circulation figures of their respective newspapers. The publication was updated and issued annually. As a result of this publication, publishers of newspapers eventually changed their circulation figures.

Rowell also published the American Newspaper Reporter, which was a house organ that preceded Printers’ Ink. The organ contained insightful features about individuals who worked in the advertising and newspaper businesses, as well as other informative articles.

By 1871, Rowell’s “list system” had been employed 6 years and had proved profitable. Rowell himself had accumulated more than $100,000. Yet the firm continued to add to its various lists of newspapers and clients. Rowell’s firm placed numerous ads for various questionable remedies, for instance, even though Rowell’s opinion toward advertising patent medicine changed dramatically years later.

In 1878, Rowell issued a small pamphlet that expressed the principles and conditions that guided the agency. The same year, he sold the firm’s house organ, American Newspaper Reporter and Advertisers’Gazette, to R. H. C. Valentine, who changed the subhead and design. In 1880, he purchased a farm in New Hampshire and seldom worked in advertising. However, in 1888, Rowell returned to his office in New York and published Printers’ Ink, which contained articles about the business of advertising. The publication became a journal for advertisers and was so successful that eventually it had at least 200 imitations.

Rowell divorced in 1890 and married Jeannette Hallock in 1891. He retired from advertising in 1905 and wrote 52 papers about his life in the business. These papers appeared in Printers’ Ink, then in the book Forty Years an Advertising Agent: 1865–1905, which was published in 1906.

N. W. Ayer & Son

Francis Wayland Ayer was born in 1848  in Lee, Massachusetts. Nathan Wheeler Ayer, his father, had graduated from Brown University. In fact, Francis was named after Dr. Francis Wayland, one of Brown’s presidents.

Francis Wayland Ayer learned from his father the basic principles that helped him throughout his life. He learned what responsibility, integrity, and honesty meant. When he was 14, he taught in a country school in New York. A year later, he was offered a position in a village school.

In 1867, he attended the University of Rochester. Within a year, he had spent his savings. He asked his father for help, but his father was barely earning an income. Ayer left the university in search of a job. The publisher of the National Baptist, a weekly religious newspaper, hired him to solicit ads. Ayer earned $1,200 in commissions in less than a year. His employer offered him $2,000 a year to stay with the firm, but Ayer refused; he was certain he could earn more on his own. He persuaded his father to work with him, and on April 1, 1869, he opened the agency N. W. Ayer & Son. He named the agency after his father for several reasons, including because the name sounded more impressive than just F. W. Ayer.

The Ayer agency began with 11 religious newspapers. Like other agents of his day, Ayer solicited ads from advertisers, then placed them in the publications listed with his agency. In addition, he purchased the total advertising space in certain publications, then resold it in partials to advertisers. Thus, he acted as manager of advertising departments of publications. Ayer also placed ads in publications that were not on his list. In such instances, he estimated how much the space would cost, then quoted a price that was slightly higher than his estimated cost to advertisers. Ayer earned income the best way he knew how: by selling and bargaining. By the end of its first year, the agency represented more than 11 newspapers. Growth continued, and in 1870, Ayer had to move to a larger office and hire his first employee, George O. Wallace, a bookkeeper.

Within 2 years, the agency had to move again. It was handling more than 300 publications located in 27 of the 37 states that made up the nation. In addition, ads for clients were placed in other publications through other agents.

In 1873, N. W. Ayer died. Francis purchased his father’s interest in the business. The same year, as a result of growth, Ayer asked Wallace to become a partner; Wallace accepted a one-fourth interest in the agency.

In 1875, Ayer married Rhandeena Gilman. The same year, the Ayer open-contract-plus-commission plan was initiated, after Ayer decided to represent advertisers, not publishers. Unlike Rowell, he would inform an advertiser as to how much space cost. Furthermore, he would inform an advertiser as to what the agency received for its services. Instead of being merely a space seller like other agencies, Ayer’s agency would become a space buyer and therefore be paid by the client. Through trial and error, Ayer learned how to earn a profit from his commission system. The advertiser had to trust Ayer and vice versa. Ayer would buy space at the lowest possible cost for the advertiser. The advertiser would have access to Ayer’s lists of rates. Thus, the advertiser could determine the cost of advertising space in a specific publication and, consequently, the commission to the agency.

This system allowed Ayer to buy advertising space wisely as well as consider the advertiser’s needs, which are the hallmarks of modern agencies. The system, although sound, was not adopted by every agency that learned about it, but it forced every agency to recognize that advertisers had interests that needed servicing.

Throughout the 1870s, the Ayer agency grew. By 1876, it could place ads in any newspaper published in the United States or Canada, because Ayer had created a printing department a year earlier so the agency could print most of the ads in-house. This gave the agency an advantage over other agencies; most agencies hired independent printers to print their clients’ ads.

In 1877, the agency purchased Coe, Wetherill & Company, another agency in Philadelphia. Coe, Wetherill & Company had succeeded Joy, Coe & Company, which had acquired Palmer’s agency. In addition, the agency, like Rowell’s, published Ayer and Son’s Manual for Advertisers, primarily to promote its list of publications, and later, The Advertiser’s Guide, a quarterly magazine filled with informative features and promotional pieces about advertising.

Ayer, like other agencies, placed ads for makers of patent medicine. Other clients included John Wanamaker, Montgomery Ward and Company, Whitman’s Chocolates, Blackwell’s Durham smoking tobacco, Singer sewing machines, Harvard College, and manufacturers of farm machinery.

In 1878, Ayer allowed Henry Nelson McKinney to become a partner. McKinney, an expert in sales, believed in the power of advertising and in the open-contract system. He was extremely important to the growth of the agency.

In 1879, Ayer started another service when it conducted a market survey of the nation to entice the Nichols-Shepard Company, which manufactured threshing machines. The survey presented the production of grains by counties and states. In addition, the agency included an in-depth advertising plan. This was the first advertising campaign based on a market survey. The company hired Ayer as a result of the survey.

In 1880, the agency focused on writing advertising copy in addition to printing ads. The same year the agency published the American Newspaper Annual, which listed every newspaper and magazine published in the United States and Canada. This annual later became the N. W. Ayer and Son’s Directory of Newspapers and Periodicals.

Ayer’s business policy changed in the 1880s. The agency refused advertising that would discredit the agency or would disappoint the advertiser. Nonetheless, the agency continued to grow, although clients curtailed their spending on advertising because of a recession in the mid-1890s.

In the late 1890s, businesses expanded, including Ayer. In 1899, it handled the major campaign that introduced the Uneeda Biscuit, which was sold in individual, airtight packages. The campaign, which was for the National Biscuit Company and was the largest up to that time, included newspaper, magazine, and outdoor ads. The campaign was an overwhelming success.

Although the agency had stopped accepting beer and whiskey accounts, by 1900 Ayer had become the largest agency in the nation, with more than 160 employees and profits exceeding $58,000. Ayer opened branch offices in New York, Boston, Chicago, and Cleveland in the early 1900s.

Ayer realized that the agency had become too large to manage, even for his partners and himself. After hiring several managers who failed in their responsibilities, he hired his son-in-law Wilfred W. Fry in 1909. Fry had married Ayer’s oldest daughter in 1904. Fry, a hard worker, was made a partner 2 years later. Ayer gave him the responsibility of managing the agency.

After the war, the agency’s profits soared to more than $500,000 in 1919, the year the agency celebrated its 50th anniversary.

Albert Lasker and Lord & Thomas

Albert Lasker shaped and characterized the advertising industry for the first 40 years of the 20th century. Born in 1880, Lasker grew up in Galveston, Texas, where his father was the president of several banks. When he was not in school, Lasker worked as a bookkeeper for his father and as a journalist for the Galveston Morning News. When he graduated in 1896, he worked full-time for the newspaper, until he moved to New Orleans, where he worked for the Times-Democrat. Then he moved to Dallas, where he worked for the Dallas News. Eventually, he returned to Galveston. He desired to publish a small newspaper in Texas. His father agreed to buy a small newspaper on one condition: that he try advertising for a brief period. Lasker agreed.

Through his father, Lasker found employment at Lord & Thomas, an advertising agency in Chicago. Lasker worked as an office boy for $10 a week. A year later, when a salesman left the agency, Lasker asked Ambrose L. Thomas, one of the partners, if he could have the salesman’s territory until he found a replacement. Thomas agreed, and Lasker worked diligently. He and a friend, Eugene Katz, created several ads for the Wilson Ear Drum Company, which they showed to the company’s president, George Wilson, who used the ads. The company’s sales increased.

Lasker married Flora Warner in 1902 and demanded a higher salary. A year later, his salary had doubled. D. M. Lord, one of the agency’s partners, retired, and Lasker purchased his share of the agency.

Lasker met John E. Kennedy in 1904 and hired him to write copy. From Kennedy, Lasker learned that consumers needed a reason to buy something. To Kennedy, a good ad contained a logical explanation as to why the consumer should purchase the product. Through Kennedy, Lord & Thomas pioneered “salesmanship in print” and “reasonwhy” advertising, which other agencies adopted.

Lasker publicized Kennedy’s discoveries in the agency’s house organ, Judicious Advertising, and in other publications. As a result, Lord & Thomas acquired more clients until it became one of the largest agencies in the United States.

Unfortunately, Kennedy left Lord & Thomas after 2 years. Lasker was in charge of editing all copy that was written for clients, even though he did not write any himself. He also introduced ideas, which were used in campaigns.

Thomas died in 1906, and Lasker and Charles R. Erwin purchased his share of the business. Erwin remained a partner until 1912, when he sold his share of the agency to Lasker.

Claude C. Hopkins, another copywriter, was hired in 1908. Hopkins employed Kennedy’s style. Lasker paid Hopkins more than he had paid Kennedy. Hopkins enjoyed visiting clients to see how products were manufactured. He created memorable ads for Quaker Oats’ products, Goodyear, and various manufacturers of cars and trucks. He emphasized brand images in his ads. He realized the significance of conducting tests and researching copy to determine which headline, which subhead, and which sentence of body copy attracted the most attention. Hopkins’s ads were straightforward and simple, with few illustrations. Hopkins employed testing through the use of coupons and samples in numerous campaigns. He traced who responded, and this piece of information benefitted the client. Lasker learned a great deal from Hopkins and vice versa.

Lasker was responsible for Americans purchasing orange juice. Lasker learned that citrus growers in California produced so many oranges that they cut orange trees to limit the supply. Primarily to stop the destruction of the trees, Lasker had campaigns created to encourage consumers to not only eat oranges but also drink orange juice.

Lasker and Hopkins were involved in other campaigns, including the campaign that depicted Palmolive’s beauty because of its color instead of its power to clean. For Van Camp’s pork and beans, they employed tasting demonstrations as well as the power of suggestion.

Lord & Thomas prospered. Billings rose from $3 million in 1906 to $6 million in 1912. The agency had opened offices in New York, Toronto, Paris, London, San Francisco, and Los Angeles.

Before he became intrigued with politics in 1918, Lasker had contributed much to advertising. He had been partly responsible for the salesmanship in print and reasonwhy styles of copy. He and Hopkins had been responsible for “scientific” advertising. He had promoted ethical principles and had been opposed to questionable or dishonest advertising.

After working for the U.S. Shipping Board, Lasker returned to Lord & Thomas in 1923. Although Hopkins had been directing the agency in Lasker’s absence, he realized that he and Lasker differed on how the agency should operate. Hopkins retired in 1924.

Lasker hired Ralph Sollitt; then, he fired every employee in the New York office. He was determined to make Lord & Thomas what it once was. He explained his years with the agency to his subordinates. Then, he had ads created to attract new clients. The agency captured additional accounts in the late 1920s.

For Kimberly-Clark’s Kotex, the agency created factual ads that informed women that Kotex would be available in plain packages in certain stores. Other ads informed organizations how young women could be taught feminine hygiene. Sales increased as a result.

For the American Tobacco Company’s Lucky Strike brand of cigarettes, the agency developed the “precious voice” campaign. Ads contained colorful photographs of opera stars in their costumes and the headline “My living is dependent on my being able to sing, and I protect my precious voice by smoking Lucky Strike.” Women began to smoke Lucky Strike cigarettes in public. Within a few years, Lucky Strike became the best-selling brand of cigarettes.

In 1926, Lord & Thomas became Lord & Thomas & Logan, when Lasker asked Thomas F. Logan, who owned the Logan agency, to consolidate with Lord & Thomas. Through Logan, Lasker acquired some accounts, including

Radio Corporation of America (RCA), which owned the National Broadcasting Company (NBC). For Palmolive, Lasker had an hour-long program created for radio. When this proved successful, he had programs created for other advertisers. By 1928, the year Logan died, Lord & Thomas was responsible for about 50% of the advertising placed with NBC. With the help of radio, Lasker’s Lord & Thomas agency became the largest agency in the world in the 1930s.

In 1931, Lasker cut salaries by 25%. Two years later, he fired more than 50 employees, a practice to which he had grown accustomed.

In 1936, his wife died. Soon after, Lasker retired from Lord & Thomas. However, when Don Francisco, the agency’s president, left to go to work for the government during World War II, Lasker returned to the agency.

In 1942, he met with his three senior executives, Emerson Foote, Fairfax Cone, and Don Belding, and informed them that he wanted to sell the agency. The executives purchased the agency, and Lord & Thomas ceased to exist on December 30, 1942.

Changes in Advertising

Radio grew in popularity as an advertising medium. Commercials changed in the 1920s. At first, commercial messages were similar to lengthy essays. The sales pitch was hidden. Before the decade ended, the commercial message was direct. Consumers were instructed to purchase the advertisers’ products.

Advertising agencies suffered during the 1930s, like other businesses. People lost their jobs as clients decreased advertising budgets. However, in the 1940s, America’s economy improved as thousands of men and women went to war or to work building military goods. Advertising’s role was somewhat akin to what it had been in the

Depression. During the 1930s, advertisers had attempted to boost morale through ads. During the 1940s, advertisers informed citizens that products would be available after the war, but their main emphasis was patriotism.

Occasionally, they tied the war effort to their business.

Television and Advertising

After World War II, the economy changed. Women were encouraged by the federal government through ads to return home so that others who returned from the war could have jobs. Some women paid attention to these ads; most did not.

Although television was not a strong medium in 1950, advertisers spent $10 million on it. In the early 1950s, advertisers owned the programs they sponsored and consequently received criticism for manipulating content.

Dramas, mysteries, comedies, and westerns had been heard on radio. As more of these programs were produced for television, radio had to change to a different format. Music was the logical choice.

Advertising on television was not without its critics. Many complained that commercials were annoying, misleading, deceptive, and even manipulative. Critics notwithstanding, television became the most popular medium among national advertisers.

Most of the commercials in the 1950s included an announcer—sometimes a star of a program—who looked squarely into the camera and discussed the product. Copywriters had to be taught how to write for television. Eventually, other kinds of commercials—slice of life, animation, humor—were tried and adopted.

Advertising Concepts

“Brainstorming” was started by Alex Osborn at Batten, Barton, Durstine & Osborn (BBDO), when the agency started losing clients and personnel in 1939. It was popular at the agency in the 1940s. The concept was continued in the 1950s by Willard Pleuthner of the same agency. This concept simply separated the “creative mind” from the “judicial mind.” The former generated ideas; the latter tamed them. At BBDO, members from all departments participated in an open or free climate—brainstorming sessions—trying to create positive solutions to clients’ problems. Some agencies adopted this idea; others did not.

In the 1950s, several agencies in Chicago employed “motivational research.” Pioneered by Ernest Dichter, motivational research employed certain methods from psychology and actually replaced statistical techniques of polling. In addition, when it was used by Leo Burnett, Foote, Cone & Belding, and other agencies, creating campaigns did not begin with products and their benefits. Campaigns started with consumers and what they wanted.

Another concept closely related to motivational research was “image building.” In 1951, David Ogilvy, the founder of Ogilvy & Mather, created one of the most famous ads for men’s clothing in advertising’s history— the man in the Hathaway shirt. The ad employed a distinguished-looking upper-class man wearing an eye patch. He projected sophistication and wealth. The consumer, if he purchased the brand of shirt, would project this image as well. This style of copy was recognized by others working in advertising as being persuasive. By the end of the decade, most agencies were using it to sell numerous products. Ogilvy also included reason-why copy in ads.

Another concept was the “unique selling proposition” (USP) of the late 1950s and early 1960s, which was promoted by Rosser Reeves, who worked for the Ted Bates agency. Reeves realized that consumers were exposed to hundreds of ads every day. For an advertiser to cut through this clutter, he reasoned, the advertiser’s ad had to offer a USP as well as reason-why copy. Thus, the agency had to determine what the USP was and create advertising campaigns employing it. His advertising campaign for Anacin in the late 1950s, which included the now-famous blackand-white television commercial that contained three panels illustrating pain in a person’s head and the line “Anacin gives you fast, fast, fast relief,” helped increase sales of the product immediately.

Al Ries and Jack Trout promoted “positioning” in the late 1970s and early 1980s. Positioning was another concept that became popular among agencies. Positioning implies that the advertising “positions” a product in the consumer’s mind, such as the famous Avis “We’re Number Two. We Try Harder” advertising campaign.

Other concepts, including humor, were tried and shown to work for certain products or services.

Mergers and Conglomerates

Marion Harper Jr., worked at the McCann-Erickson advertising agency in New York and was named head of research in 1945. The research department became the driving force under his leadership. When Harrison McCann became the chairman of the board, he named Harper president. Harper was 32.

Harper became interested in quality control. He initiated review boards for checking work as it progressed through the agency. In addition, he captured larger clients, including Coca-Cola.

However, Harper acquired other agencies, including Marschalk & Pratt, and put them into the conglomerate Interpublic Group of Companies, in 1961. From three departments in McCann-Erickson, he formed three companies that specialized in market research, public relations, and sales promotion. He also founded Jack Tinker & Partners, for the purpose of solving problems and producing creativity.

In the 1960s, he continued to acquire agencies. According to Russ Johnston (1982, p. 261), from the beginning of 1965 to July of 1966, “Harper added new companies at the rate of one a month. The parent company could boast of 200 offices in 100 cities in 48 countries.”

Unfortunately, Interpublic had losses of several million dollars and was having problems paying loans. Harper attempted to resolve the problems, but the banks were not satisfied. The board voted to remove Harper from his position in November 1967. Harper left Interpublic several months later.

Other founders of advertising agencies followed Harper’s lead. They included Charles and Maurice Saatchi, who founded Saatchi & Saatchi in London in 1970. The brothers began acquiring other businesses in 1972, including agencies in the United States. Throughout the 1970s and 1980s, Saatchi & Saatchi Company PLC, the holding company, purchased some of the largest agencies in the world. Profits increased every year. However, the company’s stock, like other companies’ stock, dropped in value in 1987. Personnel differed as to which direction the company should move. Some senior executives believed that the company should emphasize consulting, while others maintained that the company should focus on advertising. Several large clients switched agencies. As a result, the company lost more than $1 billion in billings. Spending on advertising slowed in the late 1980s, as fewer clients increased their advertising budgets.

In 1989, the company’s profits plummeted. To make matters worse, Kemper Financial Services, Chicago, sold 500,000 shares of Saatchi stock, causing the value of the stock to decrease within weeks, according to Kevin Goldman (1997, p. 116). Other investment firms followed Kemper’s lead several weeks later. Saatchi & Saatchi Company PLC gave employees pink slips the same year. Robert Louis-Dreyfus and Charles Scott were hired to help save the company. They sold the company’s consulting firms to reduce expenses.

In 1990, Charles and Maurice Saatchi cut their salaries. Several board members resigned, while several senior executives were let go. Louis-Dreyfus and Scott proposed a restructuring of the company, which was finally approved by representatives of shareholders in 1991.

Louis-Dreyfus left the company in 1993, when he became the president of Adidas. A. G. Scott became his successor. However, Saatchi & Saatchi lost the Chrysler Corporation account and had to resign the Helene Curtis account because it conflicted with Procter & Gamble, another account.

Charles and Maurice Saatchi vowed to either purchase Saatchi & Saatchi Advertising or have Scott removed. David Herro, who had invested in Saatchi & Saatchi Company PLC for the State of Wisconsin Investment Board, then for Harris Associates L.P., learned about the brothers’ interest in buying Saatchi & Saatchi Advertising. He wrote to members of the board, stating that any member who was interested in purchasing the agency should relinquish his position on the board.

Differences of opinion among senior executives and board members reached the press. Herro met with Maurice Saatchi and expressed his displeasure about the campaign in the press; then he met with Charles Scott.

Maurice Saatchi was removed as chairman of the holding company in late 1994. He was offered the chairmanship of Saatchi & Saatchi Advertising Worldwide, but he resigned 2 weeks later, in early 1995. Charles Saatchi resigned soon after.

Advertising Agencies Today

Advertising agencies in the 1990s seemed to emphasize creativity in advertising. However, measuring this creativity’s effectiveness was a problem, no matter which medium was used. Return on investment (ROI) was expressed by clients. Yet agencies found it difficult to answer questions such as “Did the target market see the ad? Did the target market understand the ad? Did the target market respond favorably to the ad?”

Advertising agencies became leaner in the 1990s. The reason was not necessarily because agencies had hired more experienced personnel and had gotten rid of middle management. Rather, presidents of agencies had felt the need to cut costs.

Advertising agencies offered more services to their clients in the 1990s. Some of these agencies desired to offer more services as a result of becoming integrated marketing communications firms, but many had to offer more services in order to compete and remain profitable.

Today, advertising agencies are struggling to identify target markets, which are becoming smaller, and to provide their clients with better service. Specialty firms that focus on one or two specific services are growing in popularity. ROI is ever present, and alternative media are considered. Unfortunately, how to measure these new media is the question that many media personnel are asking.


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