Advertising The Business of, Brandsin Advertising & Marketing by Bruce Bendinger, Ann Maxwell, Beth Barnes, Elizabeth Tucker, Anthony McGann, Robert Gustafson, Carla Lloyd, Tom Jordan, Jon Wardrip, Jim Avery, Dennis Altman, Alice Kendrick, Dennis Ganahl, Joe Bob Hester, and James Marra. Second (21st Century) Edition 2345678910 All rights reserved, Printed in the USA Published by The Copy Workshop A division of Bruce Bendinger Creative Communications, Inc. For further information contact: The Copy Workshop 2144 N. Hudson + Chicago, IL 60614 773-871-1179 * FX 773-281-4643 ISBN: 1-887229-18-3 www.adbuzz.com hecopyworkshop@aol. coi com ©2004 The Copy Workshop Advertisements, book covers, logos, and trademarks used in this book are copyrighted materials reproduced under fair use provisions of the Copyright Act. They are selected at the discretion of the authors as they represent principles discussed in the text. + This book is a compilation and relies on other source materials, Original sources and references are cited as accurately as possible. « No part of this publication may be reproduced or transmitted in any form or by any means electronic or mechanical, including photocopy, recording or any information storage and retrieval system now known or to be invented, without permission in writing from the publisher, except by a reviewer who wishes to quote brief passages in connection with a review written for inclusion in a magazine, newspaper, broadcast, or Website. + Excerpts may be used in a subsequent compilation with appropriate notation regarding original work by the authors.ISING RTISING & MARKETING. Introduction. READ THIS FIRST. It introduces you to the book’s key concepts: * The development of the brand as an organizing idea * The four business groupings in “The Business of Brands” * Marketing, communications, and integration = IMC * The process that “manufactures” marketing = PIE = The speed of change and the importance of new ideas This intro will give you a “roadmap” for the rest of the book, |. The Evolution of Advertising. THIS SECTION COVERS THE DEVELOPMENT of the American marketplace and its consequences in our lives today. Ie begins with the innovations of early advertisers and the tise of new media forms. Then, it shows you how the forces of marketing, are changing today’ marketplace. Finally, well discuss how advertising has become a major force in both American business and American culture. From Advertising to Marketing. THE 20TH CENTURY BEGAN with moder advertising. You'll meet innovators and their innovations as the mass consumer market grows. Midway through the century, you'll see a new way of doing business emerge from advertisers and from their advertising agencies — marketing 38 The Modem Marketplace. ‘THE WORLD OF MARKETING keeps changing. Today, marketing is a driving force almost everywhere In this chapter, we'll examine how the growing importance of marketing has reshaped the entire American marketplace and we'll look at the next evolution ~ integrated Marketing Communications (MO). 92 Advertising & Society. ECONOMICS, ETHICS, RULES, AND REGULATIONS. This chapter discusses how advertising in our society af- fects us all, whether we are citizens, consumers, marketing profes- sionals, or advertising students, 132 ‘The First American was an Ad Man. Benjamin Franklin, known as “The First American,” was not only an inventor, patriot, and publisher, he was alsa a marketer, advertising copywriver, and publisher of the biggest newspaper in the Colonies ~ The Pennsylvania Gazette. He’ one ofthe first members of the Advertsing Hall of Fame. If my Razor wasn't good enough for Ime tose Pvoulda' ask you C0 ery It! From Manufacturing to Marketing. Brands began as names for manu- $factured products. They've evolved fo become the cae concept of marketing organizationsON ANY SUNDAY, youl sce mar- ‘eters ike Campbells advertising inthe FSI (Free Standing Insert) section of your local newspaper ‘These ads are for promotions. In some cases marzeters will spend luxor three times mave on promotions than they do on advertising! National Advertising. This reaches the mass ~ a large national audience, Some examples Network TV: ABC, CBS, Fo, etc National Magazines: Newsweck, People, Tine, TV Guide National Newspapers: The Wal Sect Journal, USA Today Local Advertising. This reaches people in a specific ares dorregion. Here are some examples Local Television Newspapers Outdoor Radio Niche Advertising. This reachesa narrow group — either nationally or within a market Here some examples Cable Networks: BET, ESPN, Lie lime, MSNBC, MTV, Telemundo Trade Journals & Special Interest Magazines: AdWeek, Chain Store Age, PC Monthly, Modern Bride ok Say Black America’ Brand of Choice ‘Ads for Advertising, ‘This isthe cover ofa sales kit for BET, the Black Entertainment Network ‘A media company uses materials like these to communicate the advantages of their media chazinel to potential advertisers and to other important audiences ~such as cable i. The Business of Brands. MARKETERS, AGENCIES, MEDIA, MARKETING SERVICES. These four unique business groupings make up The Business of Brands, You'll see how these different companies are organized and the many different career opportunities they offer. Marketers & Advertisers. MARKETING AND ADVERTISING DEPARTMENTS are organized around the brands they market. In this chapter, you'll be introduced to the ways marketers and advertisers do business. We'll cover their internal responsibilities. and the way they work with outside suppliers — like ad agencies and marketing services firms. 182 Advertising Agencies. BRAND-BUILDING COMMUNICATIONS are the unique product of advertising agencies Its a business based on ideas — the bigger the better. You'll see the many types of agencies, how they work, and the many jobs needed to make an ad agency successful. 222 The World of Media. MEDIA HAS MANY ROLES IN OUR SOCIETY. ‘This chapter will focus on the business behind the media = the business of delivering audiences to advertisers and the mar- keting of entertainment brands We'll look at the different types of media and how they market themselves to audiences, advertisers, and agencies as well as how this affects us as citizens and consumers. 268 Marketing Services. MARKETING HAS MANY FUNCTIONS. In this chapter, well survey the specialized companies that supply marketing services: sales promotion, public relations, di- rect marketing, event marketing, media buying, marketing research, and more. This is an exciting growth area. 324Ill. The Brand-Building Process. MARKETING. COMMUNICATING. INTEGRATING. This section will cover the planning, implemenation, and evalu- ation of advertising in todays marketplace. You'll see how marketers, agencies, media, and marketing services all work together to build brands. Marketing & The Planning Process. PLANNING & STRATEGY DEVELOPMENT is the focus of this chapter. Planning begins with evaluation You'll see how marketers and agencies work together to define and refine objectives and then develop strategies. 364 Creativity & Communication. FROM IDEA TO IMPLEMENTATION. This chapter will cover the key element of implementation, the way an ad agency creates, presents, and then produces the communication Its one of the most fun parts of advertising, 404 Media & The Marketing of Messages. MEDIA IS THE CRITICAL CONNECTION. It delivers the message in the marketplace. Media costs are usually the largest part of an advertising budget. This chapter will cover the ways agencies determine the most effective way to deliver their brand’ message Today, the rapidly changing world of media makes this area a tremendous creative opportunity all by itself. 454 Evaluation & Integration. BRAND BUILDING IS an ongoing process of learning, evaluating, and improving — in a continual dialogue with the marketplace This chapter will survey the way programs are evaluated - providing critical information as the process begins anew. You'll see how marketers improve their programs by integration = coordinating the full range of marketing activities for further improvement. 502 ‘The full range of marketing activities. ing Plan, The Marketing Plan is a document that describes what a marketer wants to accomplish fora brand. I covers Product Pricing (and budgets) Distribution (place) Promotion (his inchdesalaspccts of IMC ~ including Advertsing) Marketing Objective and Strategy ‘Ad Objective and Strategy and more iB agua The Creative Strategy describes how you will achieve your advertising objective ~ areas such as: Brand Essence or Personality ‘Target Audience Consumer Benefit ‘To help develop creative work, there may be some som of creative brief” which briefs the creative department on the task and target There may also be strategies in eas like sales promotion and PR. Media Plan, The Media Plan inchudes: A Media Objective ~a goal which focuses on a target audience. ‘A Media Strategy ~ how you will meet that objective in terms of reaching the target audience. ‘A Media Plan ~ tactics (media buys) to help you achieve your goals. ‘The advertising itself is a result of all this planning, Each ad is a tactic that helps achieve the advertising objective. The advertising may be: ‘ATV or Radio Commercial Print Advertising Direct Mail Ora combination ofall the above. & More... Today, advertising is more than advertising. A complete marketing program for a brand might include ‘event sponsorship, a sales promotion event, and product publicity.More Power to You. The PowerBar is just one example of what can happen hen an individual with @ new idea buitds @ brand-new brand in the marketplace gen Siecle The Dragon ~ Bringing Your Product 10 Market. The Careers Section &8 aa organized resource. for helping you find that first job in The Business of Brands Where witl you be sitting afew years {from now? Our Mission is to help you prepare for The Business of Brana The rest sup to you IV. You & The Marketplace. THIS SECTION IS ABOUT YOU The Business of Brands keeps changing. So do your career opportunities. If you've considering, career in marketing or advertising, this isnt the end of this book ~ its only the beginning, The Power of New Ideas. NEW PRODUCTS, NEW MARKETS, new media, and new technology. They're all part of the modern marketplace. We'll show you how new ideas enter the marketplace as mar keters, agencies, media companies, and marketing services create new brands and develop new ways to build brands You'll see new products, new ad agencies, new media opportu- nities (like the Internet), and other exciting new job opportunities — the kind that are opening up every day. 530 Conclusion: You & Your Career. THIS IS ABOUT “THE BRAND CALLED YOU." Its about how to find your place in today’ marketplace, Ifyou who think you might want to work in advertising ot mar- keting, this section is for you. Its about how to make the cormections that result in new op- portunities in The Business of Brands. 566 Your Marketing Plan... This final section will help you work through a four-stage process that can help you do a better job marketing yourself, Your first marketing plan has a very specific objective — Get a Job! © Understanding Yourself as a Product, First, we'll help you evaluate “The Brand Called You.” © Understanding Your Market. Second, welll discuss finding ways to match yourself with the part of the market that will value your abilities. Increasing Your Market Value. ‘Third, we'll talk about ways to inctease your abilities ~ and your value in the job market. @ Bringing Your Product to Market. Finally, we'll alk about ways to market and advertise yourself as you work to earn your first job in The Business af Brands, Good luck! Index 610The Evolution of Advertising THIS SECTION COVERS THE DEVELOPMENT of the Ameri- can marketplace and its impact on our lives today. I begins with the innovations of early advertisers and the rise of new media forms. Then it shows you how the forces of marketing are changing todays marketplace Finally, we'll discuss how advertising has become a major force in both American business and American culture. From Advertising to Marketing. ‘THE 20TH CENTURY BEGAN with modern advertising. ‘You'll meet innovators and their innovations as the mass consumer market grows, Midway through the century, you'll see a new way of doing business emerge from advertisers and their agencies — marketing, The Modern Marketplace. THE WORLD OF MARKETING keeps changing, Now marketing is a driving force almost everywhere. Tn this chapter, we'll examine how the growing importance of marketing has reshaped not only advertising, but the entire American marketplace, And we'll look at the next evolution - IMC, that’ short for Integrated Marketing Communications. Advertising & Society. ECONOMICS, ETHICS, RULES, AND REGULATIONS. This chapter discusses how advertising in our society affects us all, whether we are students, citizens, consumers, ot ‘marketing professionals. bvodbton ‘The Kid from Galveston, BATT He cameto Chicago, lost money in a crooked dice game, | and decided to stay awhile ‘When he was done, Albert Lasker had helped invent the grass on golf courses, the organization ‘ol major league baseball, and modem advertising. In his spare time, he helped elect a president and stimulate modem medical research. ‘Son of an Ad Man. His dad was in advertising, but when he followed in his father’s footsteps, he did itin Nikes, Dan Wieden helped build the Nike brand ashe told the world to “just do it!” ‘The Girl From Left Field. Janet Champ wanted to change the world 30 secondsat atime She wrote a commercial for Nike called “Ifyou let me play. ‘The Revolutionary. Did you know that advertising hacl a revohution in the ‘60s? Bill Bernbach, and his agency Doyle Dane Bernbach, inspired a whole industry to change the way it created advertisingThis chapter was written by Ann Maxwell, Professor in the Advertising Se- quence at the U. of Oregon —a schook that has been ac tive in the estab- Fiskaent and operation ofthe original American Advertising Museurt in Portland, Oregon. She is alsa the co- author of How to Produce Creative Advertising, Additional matertal for this chapter was contributed by Editor Bruce Bendtnger, who is a long-time student of advertising history. * Ever hear of The Simpsons, dude? “Advertising is salesmanship in print.” — John E. Kennedy From Advertising ONE FRIDAY NIGHT IN 1897, a young reporter had a date, He was also assigned to cover a play that night, Familiar with the play, he wrote the review ahead of time ~ and went out. Next morning, Albert Lasker discovered two things. First, the theater had burned down the night before. Second, he needed to find a new career. His father suggested advertising, > In 1911, a young woman from Covington, Kentucky, took the train from Cincinnati New York with the man she would marry. Togetlver, Helen and Stanley Resor would grow the worlds largest ad agency. > In 1940, alter graduating from NYU and working as a writer for the head of the 1939 World's Fair, Bill Bernbach got his first advertising agency job. There, the young writer became friends with a young graphic designer named Paul Rand. Rand had a new approach to combining words and pictures. A few years later, Bill Bernbach applied this approach at his new agency, Doyle Dane Bernbach. The result was “The Creative Revo- lution” — a dramatic change in the way advertising was created. > In the ’60s, two Portland, Ozegon, ad executives, Homer Groening and “Duke” Wieden, would occasionally meet and won- der if their young sons would ever amount to anything. Homer’ kid, Matt, was always drawing cartoons.* Duke’ kid, Dan Wieden, followed in his father’ footsteps — with a local shoe account ~ Nike. All these people, anc many mote, play an important role in the history of advertising“Let us blaze new trails. Let us prove to the world that good taste, good art, and good writing can be good selling.” — Bill Bernbach to Marketing. THE CORE OF OUR HISTORY CHAPTER will be people and ideas. In this chapter, you'll hecome acquainted with. 1. Some Unique Individuals. Advertising is a business where people can make a difference. This history is as much about people as brands, ‘We've selected key individuals from each decade. 2. The Development of Ideas. Advertising is also a business of ideas ‘Welll talk about how and when key concepts were introduced and established. And we'll show you the advertising that was a part of those changes. And you'll see one big change ~ a shift from advertising to marketing, You'll see that one of advertising’ biggest ideas was the idea of marketing —a way of doing business that has changed virtually every business. Both advertising agencies and the marketers who were the leading advertisers of the day led the way in developing the discipline of marketing 7 | One Fascinating Book. BRBBTHE) teres 2 marvelous book on the bistory of MIRROR | advenising— The Mirror Makers, by Stephen Fox. MAKERS | Well bereferring to it during this chapeet: z | You can find out even more about some of the people you'll meet in this book. Its a great read! The current edition is available through the University of Ilinois Press Stephen Fox 39- to Mabetng ‘Ten Dollars Reward. ey red at “They ott eon need Takeda ‘completion, They ena ha as innkeepers, merchants, and trades- ren posted signs to tell the public what they had for sae. But we did not have modern mass advertising until we had mass mamu- facturing, mass communication, mass distribution, and mass education, Century. pane a5 manufacturers looked for betier ways to bring their products to market. ‘Though the principles have been around as long as the marketplace ‘marketing isa relatively recent 20th century phenomenon, ‘il for Lamps & Machinery, A fine article of Clarified Pig’s Foot CO, equal to sperm. at a Tow price aid ir quantities to sutt buyers, # Neat foot oi dito, + Also No.1 & 2 soap. + Palm and shaving dito. © For Sale by Procter & Game Co. East Side bain Stet 2nd Door of eth Sireet This ovo-inch ad appeared in the Cincinnati Gazette in 1838. (ey, you have to start somewhere)Charter Member of the Advertising Hall of Fame. ‘One of our Founding Fathers wasan advertising man. Benjamin Franklin made his money from selling newspapers and, selling ads. It helped make him one of the richest individuals in the American Colonies, Franklin's model of creativi entrepreneurial spirit, and steady support of the principles of democracy played a key role in shaping the personality of our new nation. I leys \Sarentan | Chewing Gum &, Improving Technology Improving Communication AAs you will see, improvements ia everything from product manu: facture to printing processes drove growth in the American marketplace. With that growth, new products emerged along with new ways to sell them A History of Ideas. AMERICAN ADVERTISING HISTORY is the story of the cultural and economic developments of our nation. It parallels the development of the modern American economy as it became the most prosperous in the world Four Necessities for Modem Advertising. While advertising in a limited form has been around for centuries, there were four necessary prerequisites for modem advertising: © Mass-Produced Goods. We had to have mass-produced goods so that there was something to advertise. This happened as a result of the Industrial Revolution. In 1860, for example, there were 7,600 patent applications. @ Mass Communication. We needed mass communication Inventions and improvements like the typewriter, linotype, and better printing presses helped make this possible © Mass Distribution. Goods had to be generally available. ‘We needed a good national transportation system to move goods and people from one place to another. Distribution was also necessary to allow mail order to function. @ Mass Education. We needed education ~so that media and advertising could be read by the masses. Education also meant more prosperity for more people After all, advertising cannot exist without consumers who are willing and able to purchase. Just before the turn of the century, these were all in place. Then Americans added one more key ingredient — individual initiative Industrialization and Individualism. Industrialization was the driving force in the initial movement to- ward manufacturing branded products But the driving force behind the products themselves was most often a single creative individual — or two partners who shared a vision. You will see this time and time again ‘At the same time, a combination of technology and enterprise developed the media to carry ad messages. But, before we start our journey, et’ talk about ideas First, the idea of America, which is hundreds of years old Second, some brand new ideas in economic theory. ‘American Ideals and New Ideas. America was an idea before it was a country ‘Ideas about the rights of man, the right to have new thoughts and express them, and he idea that governments power resides in the hands of the people are all part of the fabric of our system This willingness to encourage and accept new ideas helps ex- plain why these things happened in America Think about it—even before there were things to sell in America Americans were selling ideasEarly American Thought. While resting on abundant natural resources, the early colonial ‘American economy depended upon human resourcefulness to take full advantage of them. Imagination and perseverance ~ two qualities recognized by some as essential to a developing economy — were abundant in the early days of America. And virtually every immigrant brought these quali- ties with them. “The First American” Was Also an Ad Man. Benjamin Franklin, called by some “the first American,” was a creative entrepreneur who became one of America’s richest men despite humble beginnings. He wrote ads, virtually invented promotion, and helped develop early print communications in the colonies with his Pennsylvania Gazette and Poor Richards Almanac. The Importance of Persuasion and Opportunity. A small persuasive pamphlet, Common Sense by Thomas Paine, “sold” the idea of independence. Virtually everyone in Colonial America read it— or had it read to them. The thoughts of Alexander Hamilton and others as to how government should be an active and benevolent business partner ‘were not unknown; the British certainly took that view. Butin America, government support for business was implemented, in a way that led to an abundance of opportunity for the common man and the small businessman — not just the privileged few This was a dramatic departure from anything before in history. These ideas and opportunities attracted people who wanted to make the most of them. As you watch our history unfold, you will see new groups and new individuals enter the stage Many of them were immigrants attracted to the idea of America The American Economic Idea. Our economic system — capitalism and a free market ~ operates on a few basic assumptions © Supply and Demand, The principles of supply and demand help regulate the pricing of goods, Over-abundance drives prices down; scarcity drives prices up and also provides the environ- ment for the growth of new opportunities for the development of lower-cost alternatives. @ Access to Information. Everyone in the market has equal access to information, Within America democratic system, com- mercial speech, like other forms of speech, is protected to some degree under the First Amendment, © Caveat Emptor. “Buyer beware” assumes the consumer is a knowledgeable buyer able to make rational decisions. @ Reasonable Behavior, Reasonable men and women partici- pating in this system cause it to work. a- Fre Adkvetng to Ming Alexander Hamilton, who was George Washington’ aide de camp during the Revolutionary War, played a key role in identifying the ‘economic foundation for a modem America, His vision of a dynamic industrial society was prescient ata tinne when we were still an agrarian society ominated by large landowners. Here are some of his contributions: + Co-author of The Federalist Papers, which promoted the Constitution, + First Secretary of the Treasury — he managed the difficult task of getting the new republic on a sound financial footing — internally and with the nations of Europe. + The Report an Manufacture this controversial document outlined our future asa commercial and industrial power. It argued against the dominant agrarian view and proposed policies to encourage the development of commerce and industry. + Hamilton promoted a vision of government which was run as.a responsible business and behaved like a good business partner. And that’ why he’ on our $10 bilChace ‘Sharp Thinking. King Gillette was a tum-of-the-centuxy inventor and entre- prencur. (Yes, that ‘was his eal name.) The Idea? He hac an idea - the initial idea was for a disposable product one people would use up and then repurchase. Thisis he basic concept of packaged goods Gillette focused on the perfect expression of that idea ~ a razor blade sharp enough on both sides to provide a good shave, yet cheap enough to be thrown away when cull His invention was to replace straight hollow-ground razors — made to last forever but needing sharpening alter each use. A Ten Year Struggle... Gillecte struggled for over ten years, He had trouble finding investors anc someone 1o work on the prototype. He was told by cutlers, metal- workers, and experts at MIT that a ‘lade made tohis specifications was, ‘impossible, But he did it Iwas four yeats before he could sive himself a shave with the world’s first throwaway blade and six to get the product on the market ~ Gillette Maintaining an Edge! Fifty-one razor sets were sol the first. year, for $5. Second year sales leapt 0 90,844, on increase of more than 180,000 percent. In the third year, soles went up 304 percent and the revolotion in shaving had arrived In 1904, the U.S. Patent Office granted Gillette a seventeen-year patent. More chan 300 competitors sprang up, but only Gillete had the patent on the double-edge blade. Foreign counterfeits flooded the market with names such as Agilette, Billet, and Gillan. Gillett’S plan 10 incomporate the entire world never eaught on — but his disposable razor blade certainly did. Entrepeneurs and Opportunity. This was a powerful combination: resources, a resourceful popu- lation, and an economic and pohtical environment that encour aged individual initiative and achievement Their names live on in the brands they founded. > Immigrants such as Heinrich Steinweg, who moved to America and brought traditional. craft skills to the new world in the form of the Steinway piano. > Adventurers like Levi Strauss, who sailed to the California gold rush with a small stock of dry ‘goods, including some rough canvas intended for sale to miners for tents. Then he had the idea of making rugged canvas trousers ~ Levi! > Entrepreneurs such as Joseph Campbell and Abraham Anderson, who formed the Campbells Soup company in 1869. And others with new ideas, like King Gillette (see sidebar) Now letS turn to “the dismal science,” economies. A major shift is taking place in economic thinking, And its nat dismal at al. A Major Shift in Economic Theory. IN A 1930 ESSAY, John Maynard Keynes claimed market econo- ‘mies had seen their best days, This idea had heen around a while. During the 1800s, David Ricardo proposed that scarce land and. diminishing retums would be our future. And today, many thought- ful people raise concerns about other limits — clean water, biodiversity, and environmental resources, for example. But for years, most economic thinkers did little to address a resource which is virtually infinite — ideas, or, to use a current phrase, intellectual capital, Ideas are a driving force in our economy. ‘Today, Paull Romer, an economist at UC Berkeley, uses theoretical mathemat- ics to show this power To Romer, our economy is not bound by scarcity and limits on growth. To him, new ideas breed new prod- ucts, new markets, and new possibilities for abundance. Romer sees new ideesand technological change driving economic growth Pat Romer He encourages us to revise the bleak future economists have so often predicted and embrace the power of ideas and technology. A Break with Tradition. Traditional economists separated the world into wants and physi- cal objects. Since physical objects were subject to scarcity, econo- mists concluded that the only real decision was how 10 allocate searce resources to maximize wealth, But in the 1950s, Nobel Laureate Robert Solav noted the power of ideas and technology to generate economic growth =4Q-Romer divides the world into physical objects and ideas. Objects are scarce and subject to the law of diminishing returns. Objects alone cannot fuel economic growth; ideas can. Humans, says Romer, possess a nearly infinite capacity to rein- vent physical objects and their uses. As for ideas, there is no scarcity at all. Romer’s emphasizes the abundance of the human imagination as the source of economic growth. We will see the power of ideas at work throughout the develop- ment of branded products and the history of advertising Early American Advertising. FROM BENJAMIN FRANKLIN and the Pennsylvania Gazette through the 19th century, most ads merely notified readers of the arrival of goods or the availability of new items. Most advertising was local and resembled current-day classified notices in newspapers, Infrastructure Requirements. Manufacturing, transportation, and communication systems bad to arrive before national advertising was possible. In the 1880s, the US economy was based on agriculture and the manufacture of things like flour, lumber, and textiles — products that could be made into bread, homes, and clothing. Most goods were sold as unbranded commodities. Wholesalers dominated the distribution system. But the catalysts for change were in place: industrialization, edu- cation, and improvements in transportation and commumication. Growth in Manufacturing. Between the Civil War and World War 1, the American economy featured important growth in manufacturing. During the 1880s, inventors developed machinery that made flow production possible in the manufacture of goods like soap, cigarettes, matches, breakfast cereals, and canned goods. ‘As mass-produced consumer products became available, manu- lacturers looked for ways to tell people about them. An early form of communication consisted of lithographed ad- vertising cards, They live on as baseball and trading cards. In 1900, the linotype was invented, producing a full line of typography in metal pieces that could be set quickly and accu- rately, speeding up newspaper and magazine production. Mass media could now be manufactured more efficiently. ‘The Beginnings of the American Consumer. Between 1870 and 1900, America entered a period of economic boom. US wealth quadrupled — from $30 billion to $127 billion. This period featured the invention of clectric lights, the telephone, phonograph, and motion picture camera. Other inventions allowed mass production, industrial produc- tion, and distribution, The sale of packaged goods and foods grew in volume. And so did advertising. == From Advatira to Maleten During this period we saw the growth and development of + Low-cost, mass manufactured consumer produets + Mass communication vehicles + Distribution infrastructure + A large market of educated consumers with disposable income SAPOLIO ‘Ads for an early consumer brand.laa lo alte ee GjliiwD Llildree tyoik &, PINKHANS TESEEAi PEON SS a Patent Medicine Ad — a sure cure gee intcasen The Kasiman ry Plat & Fim Co, Changing Households. Americans were changing, too, Household routines evolved into making fewer things and purchasing more. Consumption of all kinds of items, including canned ot pro- cessed food, became part of almost every household. Toothpaste, cornflakes, chewing gum, and safety razors fostered new rituals and habits. Americans began to eat, drink, clean with, and wear products made in factories In the 1890s, four brands began to advertise on a large scale. Three were soaps: Sapotio, Pear’, and Ivory (made by Procter & Gamble). The fourth was Royal Baking Powder: New companies and their brands joined this list: Quaker Oats, Armour, Cudahy, American Tobacco, P Lorillard, and Remington ‘Typewriters. Tn just two decades, the advertising expenditures of manufac- turers had grown rapidly, and the types of manufacturers making those expenditures had changed dramatically. Advertising Cleans up Its Act. In 1893, half the companies spending over $50,000 a year on national advertising were patent medicine manufactuters. They accounted for most of the advertising dollars placed in ‘magazine and newspapers. In 1904, Ladies’ Home Journal published a series of articles ex- posing patent medicines as deceptive fraudulent products ‘The articles also exposed the advertising - showing an ad claim- ing that Lydia Pinkham was working in her laboratory next to a photo of her tombstone (she'd died 22 years earlier) In 1906, Congress passed the Pure Food and Drug Act. “Twenty years later, all but seven of those companies hed disap- peared from the list. Department Stores ~ The First Large Local Advertisers. By the 1880s, department stores in large cities had adopted fixed pricing. They began selling items in the newspapers. They announced goods and prices through local newspaper ads, = it worked. Consumers began using the information in depart- ment store ads as guides for shopping, By 1900, brand-named nationally advertised goods began to gain more importance in department stores such as Macy'sin New York City and Wanamaker’ in Philadelphia, but the retailer was still the primary advertiser Today, retailers are still the primary users of newspapers. A Philadelphia agency, NW Ayer & Son, pioneered the place- ment of newspaper advertising and became the first major na- tional agency. They're still in business today, “Keeping Everlastingly at it.” 44Growth of National Brand Advertising. Ayer’ improvement made it easier to advertise nationally Soon, two-thirds of the revenue for newspapers came from ad- vertising, and advertising for national brands in newspapers had surpassed regional and local retail advertising But a change in the media was about to change advertising, Magazines - The First National Media Form, With the advent of popular national magazines, there was now a real place to advertise nationally to a large audience. In the beginning, “polite” magazines took pride in not includ- ing advertising among their pages. (Remember, much of the ad- vertising at that time was for those patent medicines.) Two magazines that did merely sold their back covers to the Great American Tea Company and limited advertising to less than a page per issue. J. Walter Thompson Has a Big Idea. Ayoung ad man noticed that most magazines ran only a page or two of advertising J. Walter Thompson thought it amazing that noone had thought to use these prestigious pub- lications as an advertising medium, He approached the literary monthlies, who found the thought of extra income quite persuasive. By 1876, Scribner’ was carrying. twenty pages of advertising per issue J. Walter Thompson (JWT) specialized in magazines and soon monopolized the field. His success led him to buy the business from his boss ~ for $500 - and put his name on the door. JWT became known for the “Standard List” of 25 to 30 of the best magazines in America under its exclusive contract. Justas newspapers helped establish. NW Ayer, the growing maga- zine industry helped establish J. Walter Thompson. But a magazine publisher was about to make an even bigger change. His idea would create a whole industry ~ the modern ad- vertising agency. That person was Cyrus H. Curtis, =~ From Adkesrg to Matet BOYS’ REINS, eR LUNCH BOXES, Bae BOOK STRAPS, | NNT, KEARNEY & 001 7 K STORES, Products Change. But departme) stores and other retailers are st primary users of newspapers. re nt ill Aeertving is a artery of bait SF oa av ath pri. To know what you offer the public is of value, is a satis faction to you, but to make others know it is not $0 easy. Through the agency of the J. Walter Thompson Com- any. you are relieved of all ‘worry in getting the ear of the public: long years of experi- fence has taught them how. J. Walter Thompson @. Sg Rentrn Chie nanOrte 1 ‘The Commissioner. Cyrus H. Cutis of Cuntis Publishing encouraged the development of advertising agencies by promoting the agency commission system Kellogg’ gives their marketing a ‘push — with aggressive sampling Cyrus Curtis Has a Bigger Idea. Cymis H, Curtis of Curis Publishing had a different atitude about the media and advertising, I¢ was revolutionary In many ways, Curtis invented both the modern American magazine and the American advertising industry. Growth in the media and the increase in the number of nation ally advertised products got things growing, But it was the estab- lishment of the commission system that led directly to the growth of advertising agencies. Cums believed in advertising, He believed advertising was an investment ~ and for him it paid handsomely. His advertising brought increased circulation ~ which attracted other advertisers and enabled him to lower costs to subscribers. Most important, with this policy Curtis created an enthusiastic sales force ~ advertising agencies. The Commission System. As publisher of the Saturday Evening Post and the Ladies’ biome Journal, Curtis established an unbreakable commission system — 10% commission to responsible agencies on advertising space cast, plus 5% discount for cash payment, Agencies were (o charge ad- vertisers the full rate for services. nd, of course, they dil In 1883, he started the Ladies’ Home Journal —a magazine based. con articles initially written by his wife, By 1805, Curtis achieved a citeulation of 750,000, From 2,200 to 2 Million. ‘Curtis ther purchased the Saturday Evening Post, which he grew from 2,200 to 2 million subscribers in just ten years These magazines featured the latest fashions and fiction, and provided news of the latest products, with advertising, A National Advertising Medium for National Advertisers. The American magazine audience was an advertiser's dream. They were educated, had money to spend, and paid attention to the ads, Now manufacturers could speak to huge numbers of potential customers at one time A National Marketing Infrastructure. The infrastructure was now in place: + National transportation * National brands + National media vehicles, + An educated and affluent audience ‘The Final Component Was New Thinking. ‘There was just one thing left 10 do. Itneeded an idea to make this infrastructure more elective. twas time for someone to invent modem advertising That person was Albert Lasker.“The Age of Lasker.” BETWEEN 1900 AND 1920, advertising and marketing were de- fined by an important group of new thinkers: Claude Hopkins, Elmo Calkins, John E. Kermedy, Charles Coolidge Parlin, Cyrus Curtis, Henry Ford, Albert Sloan, W.K. Kellogg, and most im- portant, Albert Lasker. Almost from the beginning, there was controversy. ‘wo Schools of Thought - "Hard Sell/Push” & “Soft Sell/Pull." Two schools of thought emerged regarding advertising messages. Well refer to them as “Push? and “Pull.” Push marketing pushes product into the distribution channel. Pull marketing works to stimulate demand, which pulls prod- vet off the shelf. Successful marketing often has some of both. “Hard Sell” Pushes the Advertising Message. Push advertising - more commonly referred to as “hard sell" and “reason why” ~ emphasizes pushing a rational selling proposition at the consumer consistently and often. 1k counts on people remembering that proposition, whether they likeit ornot, and choosing brands based on logic and residual memory. “Soft Sell” Pulls You into the Advertising Message. Pull advertising — commonly referred to as “soft sell” and “image” ~ emphasizes pulling consumers into the message with a clever, engaging, or entertaining presentation It counts on people getting involved with the ad and thinking well ofthe brand because of values communicated along with the ad message (humor, for example). Consumers choose the brand based on an emotional as well as a logical connection, Each approach can point to dramatic success Is a debate that continues to this day. Early Advertising Innovators. From its earliest days, advertising has been a personality-driven business, Several individuals left their mark on this period with ideas that set the tone for decades to come. Charles Coolidge Parlin Invents Market Research. For example, look at how marketing research originated. Charles Coolidge Parlin worked for Curtis Publishing at the turn of the century. In 1902, he attempted to persuade Campbell’ Soup to advertise in the Saturday Evening Post; he was told only working people who made their soup from scratch read the “Post.” Parlin collected samples from Philadelphia garbage routes and proved Campbells customers also lived in these blue collar areas Campbells contracted for ads 52 weeks a year, with this candi- tion -ads must appear on the first page after the reading matter in the magazine. This became the “Campbells Soup Position.” Itis one of the earliest examples of marketing emanating from the world of advertising ~ but not the last. eli This period will cover: + The “idea* of modern advertising developed by Lasker and others + The development of two schools of thought, Push and Pull + The beginnings of marketing "Beri ae ipod ay Eat Quaker ‘Wheat Berries ‘At Your Grocers Look at this early ad for Quaker Wheat Berries ~ with unfocused metaphors and slogans. In two jjffies aflavory meal tosatisfy the bbungriest man —Kellogs’s Crispy Corn Flakes. laos 2nd SST (rd Sam *seciace And a tittle Pull with attractive artChapter ll ‘This was the popular “Phoebe Snow" campaign for the forthe Lackawanna Railtoad essentially, an extension oflthographed European poster ar. The sales proposition, “The Road of Anthracite,” referred to the railroad’ use of hard coal which resulted in less soot ~a ral problem a the time, Dressed in white, Phoebe Snow personified the benefit! sss ‘No more “Wheat Berries.” Now its Putfed Wheat and Putfed Rice. Now itl “Shot from Guns!” Quaker now has tightly focused claims ~ with “Airy Nut-Like Morsels” as the result of this unique Inside Every Grain ‘TheQuawer Qats@mpany Lasker copywriter — Claude Hopkins = pfs up Qualer with "reason why" copy. Evencereal canbe full of foctsama figures. ‘Says Phoebe Snow. Rooue ‘ na ToBuitato! ‘My gown stays white From morn till night Upon the Road” Elmo Calkins and “Artful Advertising.” Elmo Calkins and Ralph Holden began the first “creative driven” advertising agency Calkins, deafened by a childhood illness, was a copywriter. However, he ultimately made his greatest impact with art and the design of advertising, Dissatisfied with the appearance of the common look of ads, Calkins brought fine artists and illustrators into his agency to help exeate ads with more aesthetic appeal He often claimed his greatest satisfaction was in “improving the physical appearance of advertising,” The Core Idea of Modem Advertising. An early copywriter, John E. Kennedy, gave us the first definition of modern advertising; “salesmanship-on-paper,” or, as itis more commonly used, “salesmanship in print.” This isthe core idea of modern advertising Up to that time, the advertising business was about selling space, not about making the most of what was in that space. This single concept made all the difference. Kennedy was an ex-Mountie who had already had a huge im- pact in Canada, He was hired by Lord & Thomas As their chief copywriter, he first described “reason-why” ad- vertising, “True reason-why copy is Logic, plus persuasion, plus con- viction all woven into a certain simplicity of thought — pre-digested for the average mind.” Kennedy believed in finding a place to have rational dialogue, tout not talking over the public’ head. These early concepts still have application today. His successor was Claude Hopkins — America’s first great copywriter. Claude Hopkins and “Scientific Advertising.” Hopkins had considered the ministry but discovered that his true calling was writing advertising, Hopkins loved everything about it. He liked writing for mail order and using coupons and premiums. He liked testing advertising. And he got results. Hopkins wrote about his methods in Scientific Advertising, which, some call “the greatest advertising book ever published.” 4aHopkins and Kennedy worked for a man who became not only the most powerful (and wealthiest) person in advertising, but an important influence on American society and culture. In 1908 Hopkins made $185,000 a year, probably equivalent to $5 million today. His boss made more Hiis boss was Albert Lasker. Albert Lasker. Advertising has often welcomed new people with new ideas, Albert Lasker is a classic example, He was born in the boom town of Galveston, Texas, in 1880, His father, Morris Lasker, was a successful businessman. Reflecting his father’ entrepreneurial spirit, he began his own ‘weekly newspaper at the age of 12 ~the Galveston Free Press, Albert solicited advertising published for over a year — at a profit. But two events changed his life. The first happened when he ‘was just 16 — already working full-time for the Galveston News. Albert is the young reporter at the beginning of this chapter — the one who filed the review of the play he didn’t see! Familiar with the play, he wrote the review ahead of time, skipped the performance to go out on a date, and then discovered the next morning that the theater had burned down! With this embarrassment following him, Lasker moved to New Orleans, then Dallas, all the time working as a reporter. Then he decided to try his fate in New York. His father opposed this idea and Alberts newspaper career. So Morris Lasker made a deal with his son, as fathers will. If young Albert would try working in advertising for three months, he could then go to New York. Lasker Joins Lord & Thomas Through business dealings, Morris Lasker had met D.M. Lord of, the Lord & Thomas advertising agency in Chicago. He arranged for Albert to work there for $10 a week. Initial responsibilities included sweeping floors and emptying cuspidors. A Roll of the Dice... Now the second twist of fate. One night after work, Lasker lost $500 in a crap game — a huge sum at the time. The gambler demanded payment immediately, Albert persuaded Ambrose Thomas, to loan him the money. Lasker’ dream of mov- ing to New York ended. A larger one began. ‘Atthe age of 19, Albert went on the road as.a salesman for Lord & Thomas. He quickly acquired $50,000 of new business and persuaded an existing client to increase both the ad budget and the commissions paid to the agency if the agency wrote the copy. Albert hired a newspaper friend to write the copy. Agency income on the account went from $300 to $3,000 a month, Lasker was on his way. Then he ran into one of those iceas that changes everything. -49- From Adverts to Matis $185,000 in 1908 — ata time when cars were under $1000 and no incame tax! This is the man who paid them. Albert Lasker owned America’s largest aad agency by the time he was 32.