the mind of the consumer. The new medium birthed a cycle of increasing expectations and demands for innovation on the part of a smarter and smarter consumer to allow a connection for a marketer. All this foreshadowed the pace of change leading eventually to the digital future.
4000 BC – 1960 in a Nutshell
Putting aside papyrus messages and commercial wall paintings in ancient Egypt, Greece, Rome, China and Native America that date back to 4000 BC, advertising media moved at the same glacial pace as the global culture as a whole. The first advertising agency was born around the time of our revolutionary war against England and was located in London. They placed newspaper space and were essentially the first media department, which was all they were. The first US agency was opened sixty years later, in 1850, by Volney Palmer. It also merely bought newspaper space, but did it “on the spread.” They inflated the price of newspaper space that they charged clients and pocketed the difference, a practice that slowly died away in the early 20th century and then reappeared in the late 1950s when media buying services emerged.
In 1856 Mathew Brady offered to produce photographs for clients and place them in newspapers. Thirteen years after that (just after the Civil War), pioneered by Frances Ayer at age 20, NW Ayer appeared in Philadelphia and became the first full-service agency, actually writing ads for clients for the first time. J Walter Thompson appeared a decade later and hired writers and art directors to produce ads, forming the first creative department.
At the turn of the 20th century, McCann Erickson opened and became the first agency to spread elsewhere, first to South America.
Meanwhile, agency compensation evolved from the early buying on the spread to a 15% commission system, which paid for creative as well as media, to a sliding-scale commission to fee-based compensation in all its variations. The system of rebates from the media back to agencies would come later, from overseas.
After 1960
In the modern era, beginning in 1960, there were roughly ten people per million dollars billing at agencies and we placed bets on television programs based on a 1200-home Nielsen sample and tracked factory shipments of products to trading areas. Today, each agency person handles approximately ten million dollars in billing (a complete reverse of their fortune) and we know the viewing habits of millions of individual homes (due to cable systems) and track their product purchases with scanner data. These can be integrated, analyzed and strategized down to the level of more than 41,000 zip codes. Media and marketing research have moved into the neighborhood.
After serving more than 300 clients from seven advertising agencies, two major research organizations and three media consulting firms, looking at how media has been delivered, bought, sold and consumed through the lens of the six modern decades has given me a unique perspective. Here is a snapshot of each decade and my take-away of some of the most important trends from those times.
The ’60s: 6 Rural Shows to Urbane 60 Minutes
Nielsen chronicled how TV morphed from a predominantly sponsored medium in the 50s to one of scattered commercials. It was truly the beginning of fragmentation. The top six shows in 1960 had a slow, deliberate, rural flavor – Gunsmoke, Wagon Train, Have Gun, Will Travel, The Andy Griffith Show, The Real McCoys and Rawhide. By the end of the decade CBS introduced 60 Minutes, which of course is the sole survivor. It was the beginning of the end of innocence and the televised introduction to an edgy, gritty reality.
I remember going with Nielsen’s head of sales on a call to a midsized agency. Summing up his presentation to the head of media, he asked, “So would you rather buy just one commercial a year on network TV or for the same money measure all your commercials in a year with Nielsen ratings?” The prospect replied, “I’ll take the spot.” The insatiable appetite for data had not yet taken hold. They say in a court of law never ask a question unless you know the answer. You could say the same for sales calls.
We were just emerging from an intuitive “roll the dice” mentality, both creatively and in media. We were still decades away from an obsession with accountability.
The ’70s: It’s All About People
If there ever was a perfect storm of social turmoil and its reflection in advertising, it was the ’70s: bans on cigarette and liquor advertising on TV, black and women’s rights expressed in commercials and the anti-war movement.
At McCaffrey & McCall, my first media directing job, Chairman David McCall did two provocative and innovative things prompted by both social and personal unrest. First, he opened the doors of the agency to those in the business who wanted to write anti-war advertising after hours. Secondly, after being frustrated by his children’s inattention at school, but hearing them repeat every popular song on the radio word for word, he commissioned his co-Creative Directors George Newall and Tom Yohe to produce a series of educational three-minute cartoons called “Schoolhouse Rock.” He convinced two influential clients (ABC and General Foods) to deliver and sponsor the series and the result was something that not only tapped into the zeitgeist of the ’70s, it became a classic that has spanned almost 4 ½ decades. Who doesn’t know the lyrics to “Conjunction Junction” or “I’m Just A Bill”?
David was a visionary who wasn’t afraid to let his personal opinions affect his agenda. He died delivering food and supplies to needy people in Africa when his jeep veered off the side of a cliff. His business and personal work were creative and impassioned. Given current problems, we could use more courageous communicators like David McCall today.
The ’80s: It’s All About Money
“Greed is good.” When Gordon Gekko made his proclamation in the 1987 movie Wall Street, he was reflecting the times. The chairman of one agency reportedly received a check for $200,000,000 for the sale of his company. With inflation, that would amount to a half-billionaire in one shot today. The Saatchis began buying agencies, after leveraging their London startup from ten years earlier. They had a really smart CFO, who started his own agency complex and was eventually knighted. Y&R, JWT and O&M merged to form WPP, under Sir Martin Sorrel. DDB, BBDO and TBWA fused in the BIG BANG—Omnicom. The new holding companies were inspired by Marion Harper’s Interpublic from the ’50s, which sought to handle competing brands within the same agency complex, but Harper nearly bankrupted Interpublic because he prized luxury and talent over frugality. By the ’80s, the executive suite had learned this lesson. One agency fired a quarter of its staff on a Friday and on the following Monday announced a 99% increase in profits on the back page of The New York Times.
In the process, agencies became leaner, arguably more productive and more profitable. However, clients, sensing the profits being reaped at their expense, began hiring compensation consultants to contain costs. This would eventually lead to agency search consultants and then companies assigning large numbers of procurement people to oversee marketing services two decades later. The battle over agency compensation was on.
The ’90s: Cable Rules, Recency Reigns
Following a decade of growth after Ted Turner’s introduction of a 24-hour news network, the old television dial went from thirteen to a digital three hundred–plus channels. In the face of this fragmentation enter Professor John Phillip Jones and superstar media thinker/communicator Erwin Ephron, with Recency Theory. Simply stated, Recency Theory recognized that people were much more receptive to advertising when in the market for a product. Since the population is