The glory days of the three martini lunch are history. Unfortunately, many other ancient agency rituals still exist. Like grinding out marketing ideas in a factory-like atmosphere. And insecurely clinging to a "face time" approach to client contact that rejects electronic communications. Scroll down the timeline below and get a historical perspective of the next advolutionary step--COMMANDO COMMUNICATIONS.
Babylonians introduce the first known forms of advertising--store signs and street barkers. Babylonians also invent "sponsorships," allowing kings to stencil their names on the temples they'd constructed.
Advertising in the civilized world consists of variations on signs, pitchmen (later known as town criers) and sponsored public works for the next 3500 years.
First printed and publicly distributed ad (mass media) appears in a German news pamphlet.
Print media grows over the next three centuries. Due to a scarcity of paper, the ads in these publications are small, all type announcements, similar to today's classifieds.
|1700||Postmasters in the American colonies act as the first advertising agents, accepting and forwarding ads to publications in distant towns.|
Traveling patent medicine men (snake oil salesmen) combine selling with entertainment and testimonials. Among first trademarked package goods, these products were positioned with slogans painted on the salesmen's wagons (the first transit advertising).
Expanding on patent medicine techniques, Phineas T. Barnum pioneers integrated marketing and global brand management in the entertainment industry through the end of the century.
The Industrial Revolution gives birth to national distribution patterns. A cheap papermaking process from France creates a newspaper boom. Unable to keep up with the proliferation of publications, manufacturers turn to advertising agents to place their ads. These agents act as independent space salesmen for out-of-town publications. By buying space at low rates and selling it much higher to advertisers, they make commissions of up to 50%.
Volney B. Palmer in Boston and John L. Hooper in New York are credited with being the first advertising brokers.
|1850||Volney B. Palmer invents the term advertising agency.|
|1860||Samuel M. Pettingill, a former Palmer employee, begins writing ads for the space he sells. Offering prepared ads as an inducement to buy space grows in popularity among brokers.|
|1869||George P. Rowell of Philadelphia publishes the first directory of newspaper space rates and circulations. This helps legitimize ad agencies by putting an end to unscrupulous business practices.|
|1875||N.W. Ayer & Son of Philadelphia, which bought Palmer's agency, introduces fixed commissions (15%). N.W. Ayer & Son also becomes the country's first "full service" ad agency, with a full time staff that would plan, create, produce and place advertising.|
|1890s||Elmo Calkins, a hybrid of copy and art sensibilities, becomes the prototype of the modern creative director.|
Curtis Publishing (Ladies Home Journal/Saturday Evening Post) leads the move to granting commissions only to agencies charging full rates.
As commissions become standardized, advertising agencies shift their allegiances from publishers to advertisers. They assume the role of marketing advisors. However, until the breakdown of the 15% commission system at the end of the century, their loyalties are compromised. After all, agency compensation is tied to the amount of space and time advertisers bought.
Full service agencies grow dramatically along with the explosion of mass produced consumer products.
Acting as "marketing partners," agencies assume almost complete control of their clients' marketing, including new product development, packaging and pricing. Often, clients paid them with shares of company stock.
Agencies get a boost from the increased profits manufacturers earned during WW1. From 1915 to 1926, ad spending tripled.
The Depression raises serious questions about the effectiveness of advertising. In an effort to justify themselves with hard science, agencies respond with staff psychologists and market research. George Gallup, of Gallup Poll fame was originally research director of Young & Rubicam. A.C. Nielson and the Starch Reports also appeared during this period.
The defensiveness that inspired the formation of research departments marks the beginning of a decades long trend of agencies trying to add value with an ever increasing list of services.
For agencies that survived, the introduction of radio helped take the sting out of the Depression. It was doubly lucrative, since agencies not only create ads for the new medium but produce much of the programming as well. The soap opera was invented by an ad agency.
|1940||Alex Osborn, the "O" in BBDO, creates brainstorming. Though of questionable value, this group exercise in free association is ideal for keeping a large staff busy. It's later followed by a more competitive manifestation of unknown origin-- the gang bang.|
Television gives agencies a new medium to collect a commission on. As with radio, agencies often assume responsibility for creating TV programs as well the commercials placed in them.
Doyle Dane Bernbach agency opens, popularizing the art director/copywriter team approach to ad creation. (Prior to this, writers and artists worked in separately.) Considered innovative 50 years ago, this style of working is now a rigid convention of traditional agencies who are blind to the creative convergence computers offer.
The three martini lunch begins a thirty year reign.
The term, Madison Avenue becomes synonymous with the advertising industry.
Ad volume triples between the end of WW2 and 1956.
Under pressure by the IRS to do something with enormous agency capital reserves, full service agencies get even fuller. Test kitchens, medical labs, packaging studios, product research centers, home economists, interior decorators, casting directors, jingle writers, librarians, psychologists, social workers, statisticians and "bullpens" of illustrators are just a few of the new additions. Clients pay for these services equally, irregardless of whether they actually use them.
The factory assembly line model of advertising kicks into high gear. Service is defined by body count.
|1956||Department of Justice rules that media associations can no longer forbid ad agencies from rebating any part of their commission back to advertisers. This marks the decades long death of the 15% agency commission.|
|1957||Bucking the trend of bloated agencies, humorist and radio star, Stan Freberg pioneers the creative services only agency. The appeal of a Hollywood creative resource to advertisers would resurface decades later with talent agent Michael Ovitz and director Spike Lee.|
Ogilvy & Mather becomes the first agency to handle a major account (Shell Oil) on a fee basis. Other Ogilvy clients also adopt a fee arrangement, making the agency's recommendations free of the traditional bias toward media spending. In the 1990s fee arrangements would become common place.
Marion Harper creates the first agency conglomerate, Interpublic, with separate divisions which allow it to handle competing accounts. This visionary concept is embraced by the ad industry two decades later.
Following Stan Freberg's lead (and supported by a favorable economy), other creative only agencies pop up. They are derisively dismissed by full service agencies as boutiques. Later they are imitated by full service agencies with spin-offs called creative islands.
Papert, Koenig, Lois becomes the first agency to go public. By the end of the decade, most other major agencies will have done so as well. This move, sets the stage for agency takeovers in the 80s.
American Tobacco, reacting against unnecessary services, demands that agencies refund any portion of their media commission left over after servicing the account.
|1964||Fantasy sitcom, Bewitched portrays Darren Stevens as a hybrid account man/ copywriter/art director. In reality, agencies are at the height of overspecialization. Creative jobs were divided up by media with radio copywriters and print art directors.|
Marion Harper's acquisition spree comes to an abrupt end. He's ousted along with 400 staff members whose dubious jobs were extravagances that would vanish from agencies over the next decade.
A compliment to creative only shops appears in the form of the first independent media buying services. Their commissions are a fraction of the traditional agency's 15%. Like many 60s innovations, their full impact on the industry wouldn't be felt until three decades later.
|1970s||A bad economy puts Advolution on hold for a decade.|
|Mid-1980s||Personal computers revolutionize the business world. In ad agencies, they they give birth to database marketing (a new profit center) and have a particular impact on number crunching media and research departments. Though they offer the technology to consolidate the traditional art director/writer team into a single creative person, agencies continue to maintain the old Bernbachian schism.|
Marion Harper's concept of multinational agency holding companies comes back in a big way. The agency business begins long period of constriction into international behemoths led by the Saatchi Brothers. Money from individual agencies in these holding companies goes to pay for debts of their parent organizations.
The staff consolidations any resulting from these mergers destroy the notion of individual agency cultures--which is often not a bad thing. For a while, it appears the traditional agency bureaucracy will be streamlined, but soon bloat sets in.
Lower transportation costs and new forms of communication (fax, modems and overnight delivery) help strong regional and West Coast agencies challenge the traditional dominance of New York.
As clients begin to shift budgets to non-media forms of marketing, agencies champion "integrated marketing" in an effort to capture lost media commissions.
The merger mania of the late '80s raises questions among clients about whether they're getting their money's worth from full-service agencies. A sensitivity to agency overheads accelerates the deconstruction of traditional agency services and the commission system.
During the 90s, negotiated fees emerge as the dominant compensation system.
Despite the capabilities of the newly merged monoliths, clients increasingly assign the creative and media portions of their accounts to different agencies.
Clients with sophisticated internal marketing capabilities no longer need or want agencies to be "marketing partners." Agencies are now refered to as "strategic partners."
Clients turn to alternative creative resources to avoid the time-consuming "creative process" of traditional agencies.
Mass media begins fragmenting with the growth of cable, special interest publications and Internet. Spending on measured media decreases. The complexity of ad placing (the same situation that spawned the agency businessin 1841) leads to a greater acceptance of independent media buying companies. Of course, their lower commissions help, too. As media planning and buying is unbundled, traditional agencies react by creating their own independent media companies.
The recession-inspired reengineering craze sweeping through client companies prompts a reevaluation of their agency relationships. "Outsourcing" for fresh thinking becomes common.
Hollywood talent agency, CAA, lead by super brand manager Michael Ovitz, wins creative duties on the Coca Cola account. Coke's rationale for leaving Madison Avenue is CAA's Hollywood talent pool and greater sensitivity to popular culture.
The CAA coup is representative of a growing trend of seeking marketing advise from management consultants rather than their traditional agencies. Some agencies react by trying to buy consultancies.
Despite the growing sophistication and popularity of communications technology such as modems, videoconferencing and faxes, traditional agencies continue to operate out of conventional office spaces as they have since the business began.
Chiat Day capitalizes on the buzz about corporate reengineering and virtual corporations by forming a Virtual Office. Though it uses new communications technology like laptops and cell phones, the staff participating in this experiment are still tied to a corporate headquarters. The scheme unraveled in a few years, but achieved its purpose of generating press.
Clients become aware of the Internet as an advertising medium. They seek expertise in this new medium outside of traditional agencies and their traditional media orientation. As usual, agencies react by trying to buy up the competition.
|1997||In a move to bring Hollywood talent into a traditional ad agency, DDB Needham forms Spike-DDB with director Spike Lee.|
So what's the bottom line to all this? After all the big services, big organizations and big deals, big ideas are still what matters most.
Which is why COMMANDO uses the efficiencies of today's technology to keep a decentralized work force centered on problem solving. Not interior decorating or office politics.
We've trimmed away organizational clutter to better concentrate on creating communications that cut through media clutter.
Advolutionarily speaking, we're downright Darwinian.