Foote, Cone & Belding (FCB Worldwide)

Founded as successor agency to Lord & Thomas, 1943; became first major U.S. ad agency to make a public offering of its stock, 1963; Foote, Cone & Belding Communications set up as holding company, 1987; entered into partnership with Publicis, Paris, and set up joint venture, Publicis-FCB, 1988; FCB Communications reorganized and became True North Communications, 1992; acquired by Interpublic Group of Cos., 2001. Foote, Cone & Belding opened Jan. 4, 1943, as the successor agency to the venerable Lord & Thomas. The move followed the retirement of Albert Lasker, who had owned the agency since 1910. Upon his departure, he removed the L&T name and handed the company's assets to the men who ran its three offices: Emerson Foote in New York, Fairfax Cone in Chicago and Don Belding in Los Angeles. Agency billings at the time were approximately $23.5 million; one year later, they reached $27.5 million. The growth came despite a wartime economy. During World War II, FCB pushed conservation over consumption on everything from tires to toothpaste. The War Advertising Council began organizing agencies to undertake public service campaigns for appropriate causes; doing its part, FCB created Smokey Bear for the U.S. Forest Service. The agency also added Hall Bros., marketer of Hallmark greeting cards, to its roster in 1944. By 1945, FCB ranked No. 5 among U.S. agencies. In 1946, FCB got some unexpected publicity with the release of the book "The Hucksters," a satiric look at advertising written by Frederic Wakeman, who had worked as an account exec on FCB's Lucky Strike business. In 1947, Metro-Goldwyn-Mayer turned it into a movie. Although soap replaced cigarettes in Mr. Wakeman's book, the key players behind the tissue-paper-thin fiction were obvious to those in the advertising field as FCB and its American Tobacco account, which it had held since 1925. Four months after "The Hucksters" was published, American Tobacco President George Washington Hill died, and a battle began for control of the company and its advertising. On one side was Vincent Riggio, the new president and an advocate of more restrained marketing policies; on the other was ad manager George Washington Hill Jr., who was committed to continued production of ads everybody loved to hate. FCB was not affected at first. Its American Tobacco business grew by approximately $5.5 million in 1946-47, when the client shifted radio production work for Lucky Strike and Pall Mall from Ruthrauff & Ryan to FCB. By 1948, FCB controlled nearly $12 million in American Tobacco business, making it the largest account in advertising. Tobacco tensions In the 18 months following the death of his father, Mr. Hill faced increasing conflict with Mr. Riggio over advertising issues. On March 18, 1948, Mr. Hill resigned, and six days later Mr. Foote announced that FCB would cease all work on the account as soon as the company selected a new agency. Messrs. Foote and Hill Jr. had worked closely since the 1930s, and after the death of the elder Mr. Hill, they began to feel that their autonomy was being increasingly undermined by Mr. Riggio, who had joined American Tobacco in 1905 and moved up through sales. The assignment of Herbert Tareyton cigarettes to the M.H. Hackett Inc. agency was a case in point; M.H. Hackett was Mr. Riggio's son-in-law. Mr. Hill's resignation came when tensions with Mr. Riggio exceeded the limits of "respectful disagreement," placing FCB in an untenable position. Many believed the agency merely anticipated the inevitable and acted first. Never before had an agency amputated a quarter of its gross billings on principle, albeit a widely criticized one. FCB's New York billings were halved, and American Tobacco stock dropped six points. American Tobacco wasted no time in naming a successor. Within two weeks Batten, Barton, Durstine & Osborn had Lucky Strike, and Sullivan, Stauffer, Colwell & Bayles was awarded the Pall Mall account. FCB also emerged unscathed, thanks to timely new business and the launch of the Kleenex pocket pack, the Toni home permanent and Dial deodorant soap. Billings held even at year's end ($52.5 million), and FCB slipped only one notch in the Advertising Age annual agency rankings. In October 1950, Mr. Foote left FCB after several medical leaves, cashing in his estimated $1 million in stock. In 1951, he joined McCann-Erickson, where he remained for 13 years, then formed his own agency, Emerson Foote Inc., which merged in 1967 with Bozell & Jacobs. He died in 1992 at 85, the last survivor of the original FCB partnership. Mr. Belding, who had been the original account manager on the Sunkist business in the L&T days, retired in 1957 to become a consultant; he died in 1969. Mr. Cone presided over another 13 years of growth, enjoying the visibility and status of a socially conscious community leader. He died in 1977. Notable campaigns Pepsodent, which had come to L&T in 1918 and shot to national prominence in the early days of radio, left FCB in October 1951 for McCann-Erickson. During the 33 years it remained at L&T and FCB, it became so successful that Lever Brothers acquired it along with Pepsodent President Charles Luckman, who went on to head Lever. After four years at McCann, however, Pepsodent returned to FCB in 1955. Many of the agency's most noble hours bore the Hallmark imprint. Since the days of radio's "Hallmark Playhouse," the marketing mantra FCB created had been, "When you care enough to send the very best." Hallmark founder Joyce Hall took it seriously and made it a point of honor that the quality of the product be matched by the quality of the advertising and the programming it supported. Thus in the 1950s, "The Hallmark Hall of Fame" became the critics' favorite TV show. For more than 20 years FCB operated a special production department devoted to the Hallmark TV programs, which became the last major vestige of network programming totally controlled and produced by a single sponsor and agency. One of the agency's landmark campaigns came together in 1956 when a young copywriter, Shirley Polykoff, was assigned to the Clairol account to introduce the first simple home hair-coloring system. Ms. Polykoff went to the heart of every woman's concern about hair dye?discretion?with the line, "Does she or doesn't she?" Other Clairol/Polykoff lines included: "The closer he gets, the better you look" and "Is it true blondes have more fun?" In 1957, when Ford Motor Co. launched the Edsel, FCB beat out Leo Burnett Co. for the $12 million account. It resulted in a break-even venture for FCB but a $350 million disaster for Ford. When asked what was wrong with the Edsel, Mr. Cone succinctly replied, "Almost everything." Going public?and global FCB entered the 1960s as the 10th largest U.S. agency. As FCB marked its 20th year in 1963, billings hovered at $150 million, only one of the partners remained and stock had been spread among approximately 100 employees. In August 1963, FBC, then the U.S.' No. 8 shop, became the first major agency to make a public offering: 500,000 shares, at $15.50 a share, representing 40% of the company. It was a triumph for many FCB executives, who had bought their shares nine months earlier for $4.75. Within a year, the price climbed to $18.25. In 1971, FCB's Los Angeles office introduced the U.S. to the Mazda, a Japanese car with the world's first rotary engine. It was extremely quiet but not fuel-efficient. When the oil crisis caused gasoline prices to double in 1973, sales plummeted, forcing the automaker to convert the car to a conventional power source. Also in the 1970s, the largest U.S. agencies continued to expand their global billings. FCB ranked No. 5 in domestic billings at $234 million in 1973 but failed to make the top 10 worldwide. The agency began a more aggressive international expansion program that brought it into alliances with agencies in Europe, South Africa and Australia. By 1982, its international rank rose to No. 9 on billings of $1.2 billion. Further acquisitions boosted that figure to $1.8 billion in 1984. Although billings grew and creative performance was high, earnings were sluggish. Advertising Age named FCB its Agency of the Year in 1986. The New York office, which had been called "the runt of the litter" by New York Magazine, acquired considerable substance when FCB Chairman Norman Brown merged it with Leber Katz Partners. With the acquisition, FCB increased its gross billings by approximately $290 million. Holding company In 1987, the company created Foote, Cone & Belding Communications as a holding company for its various assets. The next year, FCB announced an agreement in principle to form an alliance with Publicis, France's top agency. The deal created the world's No. 6 ad group, with FCB getting 26% equity in Publicis and access to a client base that included Nestl?, Renault and Shell. Publicis, under Maurice Levy, took a 51% stake in the new joint company, Publicis-FCB. During one year early in the merger, Publicis-FCB contributed 80% to the parent company's earnings. FCB's new president, Bruce Mason, who had been the only FCB board member to vote against the Publicis partnership, called for an audit, and Mr. Levy refused. Slights and insults mounted, followed by a deepening mutual suspicion. In December 1994, FCB created a new holding company, True North Communications, with the intention of becoming a major multinational player, and the following February, Mr. Mason announced that one of its strategies would be to seek majority control of Publicis-FCB. Mr. Levy immediately announced that Publicis would leave the partnership. After more than a year of bitter negotiations, the parties agreed in principle on terms of separation in March 1996. In January 1997, Publicis-FCB was dissolved, and True North began building its own European group, but not without further wrangling between it and Publicis. On March 19, 2001, Interpublic Group of Cos. announced that it would acquire True North for $2.1 billion. That year, FCB Worldwide had U.S. billings of $3.97 billion, a 10.6% drop from 2000, and gross income of $376.3 million, a 1.1% decline. Worldwide billings were $6.7 billion and gross income was $748.5 million. The move to Interpublic had dire consequences for FCB, which suffered from client defections, most notably PepsiCo. In addition, the agency felt the affects of the poor ad climate in the early 21st century. But in 2003, management and creative heads at the main U.S. offices were switched, leading to something of a renewal on the creative front. According to Advertising Age, FCB was the eighth-largest U.S. agency in 2003 with revenue of $221.6 million, a 0.6% increase over 2002, when it ranked No. 7. Worldwide, the agency had 2003 revenue of $452.8 million, a 2.6% increase over the previous year.

Foote, Cone & Belding (FCB Worldwide)

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