A look into the history of American Advertising

By: Robert Scarano

An Introduction to Advertising Advertising - the act or practice of calling

public attention to one's product, service, need, etc., esp. by paid announcements in newspapers and magazines, over radio or television, on billboards, etc.: to get more customers by advertising.

Advertising spending worldwide exceeds $350 billion per year.

About 6,000 advertising agencies in the U.S

Organization of the Industry

2006 - There were about 48,000 advertising and public relations services establishments in the United States.

Advertising firms specialize in a particular market niche.Some deal with outdoor advertising, others will deal

with advertising on busses, subways, trains.Some firms are do not create the campaign. They sell

advertising time or space on radio or television stations or publications. Because these firms do not produce advertising, their staffs are mostly sales workers.○ This is what WLBZ 2 Bangor which I reference later on

in these presentation does. ○ California and New York together account for about 1 in

5 firms and more than 1 in 4 workers in the industry.

Employment 68 percent of all advertising and public

relations establishments employ fewer than 5 employees

Due to the small size of firms, it is easier for small agencies to start up. Many operations will begin as 1 or 2 person operations.

The average age in the industry is between 25 and 54, with nobody below 20. This shows the necessary postsecondary training or experience that one needs to succeed.

Occupations in Advertising

Management and professional and related occupations Represents agency to the clientResponsible for quality of advertisement or

campaignAnalyze competitive activity

Occupations in Advertising Sales

Gather information on the public’s viewing and reading habits○ Base their ads on these

Calculates the numbers and types of people reached by different media, and how often they are reached

Track the media space and times available for purchaseOffice and administrative support

occupations Accounted for 27 percent of jobs in 2006

Occupations in AdvertisingTable 1. Employment of wage and salary workers in advertising and public relations services by occupation, 2006 and projected change, 2006-2016.(Employment in thousands)

Occupations in Advertising

Important Events in Advertising History

1704: The first newspaper advertisement, an announcement seeking a buyer for an Oyster Bay, Long Island, estate, is published in the Boston News-Letter.

1729: Benjamin Franklin begins publishing the Pennsylvania Gazette in Philadelphia, which includes pages of "new advertisements.” Benjamin Franklin was the first to use this advertising style.

1742: Benjamin Franklin's General Magazine prints the first American magazine ads.

1843: Volney Palmer opens the first advertising agency in Philadelphia.

Volney Palmer

1873: The first convention of advertising agents is held in New York.

1880: Department store founder John Wanamaker is the first retailer to hire a full-time advertising copywriter, John E. Powers.

1882: Procter & Gamble Co. begins advertising Ivory soap with an unprecedented budget of $11,000.

1883:Cyrus H.K. Curtis launches Ladies' Home Journal with his wife, Louisa Knapp Curtis, as editor.

Cyrus H.K Curtis

1887: The American Newspaper Publishers Association is formed.

1892: Ladies' Home Journal bans patent-medicine advertising.

Asa Briggs Chandler registers Coca-Cola as a trademark.

1893: Frank Munsey drops the price of Munsey's Magazine to 10¢ and the cost of subscriptions to $1, marking the first attempt at keeping a magazine afloat by advertising revenue rather than newsstand sales.

1893: George P. Rowell of Boston founds Printer's Ink, a magazine that serves as the "little schoolmaster in the art of advertising.”

1899: The Association of American Advertisers, predecessor to the Association of National Advertisers, is formed.

1900: N.W. Ayer establishes a Business-Getting Department to plan advertising campaigns based on prospective advertisers' marketing needs.

1904: The Associated Advertising Clubs of America, a group of agencies, advertisers and media representatives, is formed.

1906: Congress passes the Pure Food & Drug Act, forcing product labels to list the active ingredients.

The Federal Trade Commission Act is passed, and Joseph E. Davies is named the first FTC chairman. Section 5 allows it to issue cease-and-desist orders against dishonest advertising.

1920: KDKA, Pittsburgh, becomes the first radio station in the U.S. and is the first to broadcast the results of the 1920 presidential election.

1922: AT&T's station WEAF in New York offers 10 minutes of radio time to anyone who would pay $100. The Queensboro Corp., a Long Island real estate firm, buys the first commercials in advertising historyófour: 15 spots at $50 apiece. Following the ads extolling Hawthorne Court, a new tenant-owned apartment complex in Jackson Heights, sales total thousands of dollars.

1923: National Carbon Co.'s "Eveready Hour" is the first regular series of broadcast entertainment and music to be sponsored by an advertiser.

1924: Goodrich Tires sponsors the first hour long show over a network of nine radio stations.

1925: The National Better Business Bureau is organized.

1926: Radio Corp. of America buys New York radio station WEAF from AT&T and renames it WNBC. It forms the first radio network with 19 stations within the year, and the National Broadcasting Co. is launched.

1927: The Federal Radio Commission is established.

1929: American Tobacco Co. spends $12.3 million to advertise Lucky Strikes, the most any company has ever spent on single-product advertising.

1930: Advertising Age is launched in Chicago. 1936: Life publishes its first edition. It later

becomes the first magazine to carry $100 million annually in advertising.

1938: Radio surpasses magazines as a source of advertising revenue.

1939: NBC experiments with a telecast of TV's first baseball game, Princeton vs. Columbia.

The War Advertising Council is organized to help prepare voluntary advertising campaigns for wartime efforts. The council garners $350 million in free public service messages. After the war it is renamed the Advertising Council.

Ad Council

1952: The FCC lifts its ban on new TV stations after problems of signal interference are worked out.

1953: The Advertising Research Foundation is established. 1955: The Marlboro Man campaign debuts. 1956: Videotape recording makes prerecorded commercials

possible. 1957: In what would be one of the great marketing disasters of

automotive history, Ford Motor Co. introduces the Edsel. 1958: The National Association of Broadcasters bans subliminal

ads. 1960: Doyle Dane Bernbach introduces the "creative team"

approach of combining a copywriter with an art director to create its "Think small" campaign for Volkswagen.

1963: "The Pepsi Generation" kicks off the cola wars.

1964: After the U.S. surgeon general determines that smoking is "hazardous to your health," The New Yorker and other magazines ban cigarette ads.

1967: Wells, Rich, Greene is established. Mary Wells is the first woman to head a major agency.

1971: Congress prohibits broadcast advertising of cigarettes.

1976: The Supreme Court grants advertising First Amendment protection.

1980: Congress removes the FTC's power to stop "unfair" advertising.

1981: MTV debuts with frenetic video images that change the nature of commercials.

1986: Needham Harper Worldwide, BBDO International and Doyle Dane Bernbach merge to create Omnicom Group, the largest advertising company in the world.

1993: The Internet becomes a reality as 5 million users worldwide get online.

1993: Philip Morris announced plans to cut the price of its flagship Marlboro brand and heavy up on promotional outlays. The move, coined "Marlboro Friday," plunged Philip Morris' shares 23% and reverberated to other package goods stocks.

1998: Cigarette makers and state attorneys general draft a $206 billion deal that curbs marketing and settles lawsuits to recover Medicaid costs.

1999: Internet advertising breaks the $2 billion mark and heads toward $3 billion as the industry, under prodding from Procter & Gamble, moves to standardize all facets of the industry.

Forms of Advertising Something promoting the sale of a service or a

good is a typical advertisement. Public Service Announcements (PSA) – are

used to shape an idea or influence. Above the influence ads are examples of PSAs.

Institutional Advertising - Promote an institution, such as the Red Cross or the United States Marines. Their purpose is to encourage people to volunteer or donate money.

Political Advertising – Advertising has become the basis of many political campaigns.

Mediums of Advertising:The average American is bombarded with 5,000 advertisements in one day. There are several different types of advertising. Each type is unique in it’s own way. Each form reaches out to it’s desired audience in a different way. Over the years, advertising has become more direct and more targeted with the use of the internet.

More detailed information regarding each medium can be found on the advertising timeline found earlier in the presentation.

Newspapers

The first form of advertising

Advantages – short lead time, flexible, reach large audience, community prestige, intense coverage, reader control of exposure, coordination with national advertising, merchandising service, segment consumer by geography.

Disadvantages -- short life span, may be expensive relative to other media, hasty reading, poor reproduction, lack of creativity, decline in use.

Radio Advantages – audio capacity, short lead

time, low cost relative to other media, reach demographic and geographic segmented audience, reach large audience.

Disadvantages – doesn't have visual capacity, fragmented and inflexible, temporary nature of message.

Magazines and Journals Advantages - selectivity for demographic and

geographic segments, high in quality reproduction, lasts as long as magazine is kept, issue may be read by more than one person.

Disadvantages – long lead time, lack of flexibility in gaining attention, often limited control over location of advertisement.

Outdoor Advertising Advantages – inexpensive relative to other

media, quick communication of simple ideas, repetition of exposure to customers, ability to promote products available for sale nearby.

Disadvantages - brevity of the message, short exposure time, cannot target customer, public concern over esthetics.

Television

Advantages - impact mass coverage, repetition, flexibility in getting attention of consumer, prestige, visual and audio capabilities, short lead time.

Disadvantages -temporary nature of message, high cost relative to other media, high mortality rate for commercials, evidence of public distrust, lack of selectivity, hard to target customer, requires production specialists.

Direct Mail

Advantages – flexibility in reaching target audience, short lead time, intense coverage, flexibility of format, complete information, easy to personalize.

Disadvantages -- high cost per person, dependency on quality of mailing list, consumer resistance, may be considered as junk mail, may be difficult and expensive to access mailing lists.

Internet In the early 1990s, the internet became a

reality. The internet became the quickest growing medium for advertising as it is extremely powerful. With the use of new internet technologies, internet advertising has become very precise and taken many different forms. I will examine the different forms of internet advertising. Just as other mediums, each method tries to reach its desired audience in it’s own way.

Page Takeover Advertising These ads are just what they sound like. Ads

that take over the entire page you are on. The only way to return to what you are viewing is to manually close the ad. Myspace was one of the first large advertisers to us these types of ads. These ads make you pay attention to them.

Audible Advertising

These advertisements are some of the most annoying, but certainly get your attention. Everyone has been browsing a website when they hear, “you have just won a free iPod,” coming from their speakers. These ads try and make it very tempting for the listener.

Animated Flash Advertising These ads make the most revenue for

advertisers. These ads will come up and dance around the screen, often times making them difficult to close. They also use cool looking graphics and sounds to try and get the viewer to click them.

Interview with Bud Cushman On the next slide is an interview that I

had with Bud Cushman, director of advertising sales for WLBZ 2 CBS Bangor. The interview gives an overview of the advertising field and what Bud’s job entails.

The average American is bombarded with up to 5,000 advertisements a day, compared to 500 back in the 1970s. Bud Cushman, director of advertising sales for WLBZ 2 CBS offers some insight into the complex world of advertising. Cushman’s job has many aspects to it and he carries many responsibilities on his shoulders.

He studied broadcast journalism at the University of Maine. He has always been involved with sales throughout his life and fell into this field by accident and has been doing it ever since. He calls the field “interesting;” neither he nor any of his top sales staff hold degrees in advertising. Cushman says to succeed in the field one must be very multi-faceted. They must possess skills in many areas such as writing, reading, editing, must be able to work with numbers, and handle many critical tasks. Something he says his staff is very capable of.

Cushman said that he “doesn’t sell TV commercials, he sells what his clients sell.” His job is to raise awareness about his clients’ products and “push customers through the door,” not to sell them the product. An important aspect of Cushman’s job is raising top of mind awareness. The act of having a certain company or brand pop into your head first, being right there at the top. This is critical; it is what drives a potential customer to a certain company. It’s like asking where you want to grab some fast food. McDonalds, Burger King, Wendy’s, Subway, or some other fast food company would pop into your head. The reason it does is because of top of mind awareness, something that every company strives for.

The advertising industry will see some changes in the near future. Cushman says that his department will be directly affected by the current economic situation. Some clients that would sign on with a one-year contract are now only signing on for six months. Many of his clients have recently been cutting back the length of their contracts due to the high level of recent economic uncertainty.

Just as many things in life, you get what you pay. Good advertising costs good money; a statement that Cushman agreed with. If a tractor company came to Cushman looking to advertise, he would place their ad in with football games in the hopes of reaching the most interested audience. This type of advertising is not cheap, but it will provide the best possible results. Cushman also mentioned run of station advertising, these ads are purchased in a large quantity for a low price. The problem with these ads is their uncertainty, the station can give no guarantee as to when these ads will air, and they will be used to fill open space at any random time.

With the quickly changing technology, advertising has found a form in every medium, especially on the Internet. Cushman states that TV is still the most cost effective way to advertise, but more broad, while the web is more targeted. On TV a large variety of people are reached, some interested, some not. On the Internet, we can target people via keywords; the results are a more qualified audience with some knowledge of the subject. The term news reporter is no longer used; multimedia journalist has replaced it. Journalists of today no longer prepare a story or ad designated for one medium; it may be edited for television, then need to be edited again for the web.

Works Cited Advertising Age/Crain Communications Inc. "The

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Microsoft Corporation, comp. "Advertising." Advertising. MSN Encarta. 14 Nov. 2008 <http://encarta.msn.com/encyclopedia_761564279/advertising.html>.

Manohar, Uttara. "Different Types of Advertising." Different Types of Advertising. 10 Apr. 2008. 2 Dec. 2008 <http://www.buzzle.com/articles/different-types-of-advertising.html>.

"Advertising and Public Relations Services." Career Guide to Industries. 18 Dec. 2007. Bureau of Labor Statistics. 1 Dec. 2008 <http://www.bls.gov/oco/cg/cgs030.htm>.