THE HISTORY OF ADVERTISING

The history of advertising is one that has to be psychologically understood.  Sophisticated advertising elements introduced over the years have changed motivational research to define consumer behavior, media analysis to reach targeted consumers, and creative strategy to enhance selling messages.  Advertising is a communications tool that functions most efficiently in combination with the centralized exchange: when goods and services are no longer sold directly between buyers and sellers but are handled by merchants as intermediaries.  Advertising was needed to make potential consumers aware of the availability of goods.  In an economy in which supply > demand, advertising created demand by introducing new products or suggesting how consumers can solve some problem with existing products.

The beginning of the fulfillment of democratic ideas created a more literate society. This created more of a need and support for newspapers and magazines.  The Industrial revolution swept across America allowing for more efficient manufacturing of goods and mass production of newspapers and magazines. This created a bigger worker class who urbanized and needed more information.  Railroads and telegraphic communication would begin to pave the way for brands to better communicate.  National brands began to emerge and changed the structure of advertisement. Products are now differentiated and consumers were gaining loyalty to one brand.  The availability of branded goods, ability to provide national distribution, and a growing middle class with income to spend provided a market for more products. This supported the growth of advertisement industry.

Advertising’s modern era would arise in research and responsibility.  In early advertising, they were a lack of an ethical framework for creating a promotional message and a reliable research to measure advertising effects.  Used to be that people are responsible for discerning truth from falsehood themselves so little need for regulation of information.  The public called for greater consumer protection by late 19th century (mainly in medicines).  Research at this time often provided unreliable information and sometimes spread false fear of the power of subliminal advertising and motivational research.

The earliest known evidence of Advertising can be found on Babylonian clay tablets from 3000 B.B.  Inns in England were the first to use hoarding-first printed outdoor signs, the forerunner of modern outdoor advertising.  The foundations of modern advertising can be divided into 4 parts:

  1. The premarketing era: from start of product exchange to the 18th century.  During this time, buyers and sellers communicated very primitively.  They used clay tablets, town criers, tavern signs, or primitive printing.
  2. Mass communication era: from the 1700s to the early 20th century, advertisers were increasingly able to reach large segments of the population through mass media. Used mass newspapers and national magazines, radios, and brands began to differentiate.
  3. Research era: in recent years, from the 1920s to now, advertisers increasingly have been able to identify narrowly defined audience segments through sophisticated research methods. Early research emphasizes info on broad demographics such as age, sex, and geography. Now it takes lifestyles and motivation into account.
  4. Interactive era: communication will increasingly become controlled by consumers who will determine when and where they can be reached with promotional messages.

People no longer have to watch commercials. Advertisers have to become more sensitive to feedback.  Advertisers have to be more focused on keeping people’s trust to have successful advertising.  In today’s world, there is now the move to creativity in advertising.  Originally, ad companies were media space brokers (buy bulk space from newspapers and reselling small space allotments to advertisers).  By the end of 20th century,  persuasive advertising became important because serious brand competition began to take place. The shift in commodity goods to branded goods pushed strong promotional offers accompanying product advertising (this introduces the emotional appeal).

John Wanamaker of Wanamaker Department Stores began to sell products based of style and luxury rather than by utility. He hired the “first” true copy-writer, John Powers, and this began the move towards full-service advertising.  John Watson from Johns Hopkins, the father of behavioral research, was hired to perform market research that attempts to determine underlying reasons for purchase behavior. Advertisers began to understand the needs and want of consumers.  Then, Alfred Sloan Jr. issued in his teachings of planned obsolescence where products are discarded not because of lost utility but lost of status.  By the 1950s, almost all national companies had accepted that it was the position of a brand in consumers’ mind that sells the product rather than the superiority of utility.  Brand could last forever whereas products have a life cycle and will die.

The development of print media would create a symbiotic relationship with advertising.  The newspaper as an advertising medium.  It would become the forerunner of modern want ads were siquis, handwritten posters in 16th and 17th century England, that sought people to fill positions.  With the introduction of the rotary press, the era of the penny press began in the US, the forerunner of the mass newspaper in the US.  Newspapers established a model for financial support from advertising that continues for the majority of media today.

At first, magazines weren’t as successful as newspapers but when they did become successful, they could reach more people beyond the borders of a particular city.  Modern consumer magazine didn’t begin until the latter part of the 19th century.  Many magazines were about health, fashion, and good, but later about problems in social reforms and medicine advertisement.  At the time, advertising support for magazines came from already successful brands that had a national following.  Magazines would become the preeminent medium for national advertisers because they offered national circulation, both editorial and advertising credibility, color availability, and an extremely low cost means of reaching millions of readers.  Magazines got money from advertisers to make up for the cost of production.

Mass production, a manufacturing technique using specialization and interchangeable parts to achieve production efficiencies- began to take over America, beginning in textiles and furniture, and reached a peak with automobiles.  Henry Ford adopted a successful formula where mass production was based on high volume, affordability, and mass selling through advertising.  Mass production made products readily available; this improved the lifestyles and standards of living for almost all Americans.  Consumption had to keep these mass producing factories fueling; to encourage such consumption, the advertising industry grew to create demand. Hence, cue advertising agencies.

Volney Palmer is generally credited with starting the first advertising agency in 1841, buying bulk newspaper space at a discount and selling it to individual advertisers for profit).  In 1869, George Rowell published newspaper’s circulation estimates and started the movement toward published rate cards and verified circulation.  This made it harder for space brokers to make a profit.  By the end of the 19th century, major companies were providing creative services, media placement, and basic research as well as developing the functions of the full-service ad agencies of the future.  In 1917, the American Association of Advertising Agencies (AAAA) founded 111 charter members. Today, they have more than 5,000 members that make approximately 75 % of all advertising dollars.

By the 1930s, some companies had begun to expand overseas and began the movement of global advertising.  During the rise of America, especially during the presidency of Ulysses S. Grant, the excesses of big businesses and the advertising that contributed to the environment of immorality (think Mad Men) forced the public and Congress to demand stricter regulation of advertising and other business practices.  The pure food and drug act of 1906 was issued to protect consumers from fraudulent food producers and advertisers.  did not address the problems of faulty food labels. This was not strictly enforced by the FDA either.

The federal trade commission act of 1914 came to act.  The agency of the federal government empowered to prevent unfair competition and to prevent fraudulent, misleading, or deceptive advertising in interstate commerce.  Today, the FTC primarily ensures that advertising claims and sales practices meet reasonable standards of honestly and truthfulness.

Advertising comes of age.  Some advertising executives were trying to gain back the public trusts and stop the faulty ads so they created the American advertising federation. They launched a campaign to promote truth within the industry.  This committee is now the Council of Better Business Bureaus: a national organization that coordinates a number of local and national initiatives to protect consumers.

The Printers’ Ink Model Statue was initiated.  This act was directed at fraudulent advertising, prepared and sponsored by Printers’ Ink, which was the pioneer advertising magazine- was adopted and still exists today.  Audit Bureau of Circulations (ABC) the organization sponsored by publishers, agencies, and advertisers for securing accurate circulation statements- which conducts its own audits and issues own circulation reports

During WWI, advertising agencies promoted patriotism, US government bonds, conservation, and other war-related activates rather than products.  The iconic Uncle Sam ad to recruit soldiers was created.

During the 1920’s, radio advertisements grew as more and more people owned radios.  The great depression of 1930 turned the advertising industry into one that was deeply devastated.  Basically, the advertising industry had an intensified version of their involvement in WWI.  Created the war advertising council in 1942 to promote WWII mobilization and evolved into the Advertising Council.  This would ultimately lead to the creation of the famous Rosie the Riveter –women in workforce ad.

Buy us bonds, Promoted rationing, etc.  Advertising Council: a nonprofit network of agencies, media, and advertisers dedicated to promoting social programs through advertising. Today, they produce campaigns about environmental issues to educational concern.  Created Smokey the Bear and McGruff the Crime Dog.

Advertising after WWII to 1975 was a time of growth.  After the war, the pent-up demand led to an unprecedented growth rate in consumer spending.  Once everyone got what they needed, advertisers were called on the persuade consumers to replace the items they already have.  Televisions became a household must and thus creating another portal to advertise.  Almost everything increased in the US: population, disposable income, automobile registration, homes with air conditioning, etc., as well as growth in advertising.  During this time, many developments would arise in advertising.  Ad agencies began to negotiate the commission with clients. This encouraged growth of specialized companies.  Creativity (especially humor) became hallmarks during this period.  Legislation limited outdoor ads along interstate highways and banned cigarette ads from TV.  FTC deemed that ads can compare each other but are accountable for honest claims

Radio took a dive when TV came along.  Advertising in the fragmented 1980s became a volatile business that was constantly changing and adapting to economic conditions, technology, social, and cultural environment.  During this period: New technology: cable, home video recorders, specialized magazines, direct mail, home shopping, sales promotion all changed the fundamentals of advertising. Today, ad agents are more likely to know how to evaluate research and understand the psychology of consumers as well as being able to execute ads.

  1. Audience fragmentation: the segmentation of mass-media audiences into smaller groups because of the diversity of media outlets. This time period marked the beginning of the end of the traditional mass-market strategies. Advertisers began to see consumers are individuals; this changed the way market research was carried out.
  2. Consolidation: as media and audiences proliferated, ownership of the brand, ad agencies, and media were consolidated by a few giant firms. This created a unique dynamic as some agencies, media, and companies were acquired and combined into a giant, global conglomerate when they used to be rivals
  3. Credit: “buy now, pay later” mentality that plagued everyone also hit the ad. Industry. Media saw ad revenues fall, ads were harder to sell, merchants dealt with consumers looking for discounts, not fancy ads.
  4. America becomes a service economy

The 2000s have been marked by 2 significant developments in marketing and advertising.  Defining and using new technology to reach prospects, technology allows consumers to determine when, where, and if they will invite advertisers to deliver their message.  This era of permission marketing, asking consumers for permission or to opt-in before sending them ads and other forms of marketing communications, requires companies to rewrite the old rules of marketing and fundamentally redefine exactly what constitutes advertising.  For example, cell phones.  Measuring the value of investing in various communication channels as it relates to the changes in how we reach prospects.  With media fragmentation and consumers increased control over how, when, where they receive ad messages, marketers have to come up with new strategies such as product integration, viral marketing, and contextual internet advertising.

The change from mass media to class media has increased the cost of advertising, individualized the audience, and forced advertisers to change their mindset concerning audience measurement.  Content delivery is harder to deliver when companies who used to be competitors are now all owned by the same conglomerate.  Branding in the 21st century includes a return to strong branding with companies searching for new means to differentiate their products and move away from price competitors and generic brands.  Finally, the globalization and diversity of the world make it necessary to understand language, culture, economy, and political environment of countries around the world necessary for market research of the international market.

Three key points:

  1. Today’s advertising industry is sophisticated and is worth billions of dollars, the idea of using persuasive communication to sell is as old as trade and commerce.
  2. Advertising cannot be studied in the abstract.  All developments in advertising of technology, research, and society as a whole must be understood.
  3. Today’s advertising and promotion are no longer confined to the rules of traditional media that dominated the 20th century.

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