$142.5B 2015 U.S. ad spending for 200 LNA
In 1878, advertising agency pioneer James Walter Thompson bought Carlton & Smith, New York, from William J. Carlton and a year later renamed it J. Walter Thompson Co. JWT became well known in the U.S. and abroad for innovations in advertising: Mr. Thompson organized the first national media buy with a "List of Thirty Select Magazines"; the agency became the first U.S. shop to expand overseas in when it opened an office in London in 1899; and JWT was among the first agencies to provide a wide range of advertising services to clients, including copy, layout, package design, trademark development and rudimentary market research.
JWT's early branding efforts included establishing the Rock of Gibraltar as the trademark for Prudential Insurance. Other early clients included Cream of Wheat, Libby's Food Products and Swift & Co.
At JWT, Mr. Thompson surrounded himself with some of the most notable early contributors to the world of advertising, including Helen Lansdowne and Stanley Resor.
The Resor era
In 1916, Mr. Resor teamed with another JWT employee, Charles E. Raymond, to buy the agency from Mr. Thompson. That year, Mr. Resor married Ms. Lansdowne, a copywriter, and together they built the shop from a $3 million agency with 117 employees to a $368.7 million agency with 6,587 people doing business on six continents in 1961, when Mr. Resor retired.
Ms. Resor's "testimonial approach" to creating ads hit its stride when JWT began parading Hollywood personalities for a 1927 campaign that declared, "Nine out of 10 screen stars care for their skin with Lux toilet soap." But it was her tagline for Woodbury facial soap—"A skin you love to touch"—that made the most significant impact by introducing the notion of marketing through sex appeal.
Ms. Resor was also responsible for developing JWT's reputation as an agency where bright young women could succeed by addressing the needs and interests of female consumers. JWT became the first agency to promote women to executive positions; its female executives controlled most of the agency's prestigious soap, food, drug and toiletry accounts.
While Ms. Resor was building the agency's creative reputation, Mr. Resor, who had been influenced by behavioral psychology, developed a business evaluation formula called the "Thompson T-Square" that was designed to prompt everyone involved in the planning, production and placement of advertising to envision its final effect on the target reader.
Mr. Resor was not interested in the tables of organization, flow charts or scientific management that prevailed at other major ad agencies. Instead, he built a talent pool that included artists, writers, sociologists, scientists, lawyers, photographers, dress designers and technicians. Among his early employees were James Webb Young and Sam Meek.
Mr. Young brought his own brand of intellectual influence to the agency as the chief "pattern maker" for some of JWT's greatest ad campaigns. In 1919, he wrote the ad headline "Within the curve of a woman's arm" to sell Odorono deodorant; the campaign yielded a 112% increase in sales.
Mr. Meek concentrated on growing JWT's interests abroad from London. When he joined the company in 1925, that office had billings of $500,000 and accounts included Libby's Food Products and Sun-Maid raisins. When Mr. Meek retired 40 years later, JWT's overseas operations had grown to billings of $150 million.
Also contributing to JWT's growth was it pioneering development of consumer demographic and other research data. In 1920, JWT became the first advertising agency to write copy based on scientifically researched information. JWT also did the first qualitative analysis of magazine readership, in 1924, as well as a revolutionary reclassification of urban and rural markets by buying-power concentrations rather than by geography, in 1935.
During the Depression years, JWT overtook its longtime rivals Lord & Thomas and N.W. Ayer & Son to become the No. 1 ad agency in the U.S. and one of the largest in the world, in part through its work in these areas.
Radio and TV
With the development of commercial radio, JWT became a powerhouse in the production of sponsored programming for its advertiser clients, beginning in 1929 with the "Chase & Sanborn Coffee Hour" and, later, the "Fleischmann Yeast Hour," both for Standard Brands, a major JWT client. The agency also produced "Kraft Music Hall" and one of the longest running of all JWT programs, "Lux Radio Theater," which from 1934 to 1955 made Lever Brothers soap synonymous with Hollywood by featuring the stars of motion pictures.
JWT approached TV with the same vigor, staging the first commercial TV program in 1930 for Libby, McNeill & Libby. After World War II, JWT created the first variety series for Standard Brands and brought many of its other major clients to the medium, including Ford, Kraft, RCA, Elgin Watch and Ballantine Beer.
By 1947, JWT had 60 VPs, nine U.S. offices and 18 international branches. Together, they made the agency the first shop in history to break $100 million in billings. By 1958, JWT was the industry leader in TV billings.
In 1964, broadcast billings accounted for more than half of JWT's total domestic billings, or about $153 million, and more than 100 of JWT's clients used broadcast advertising. Among JWT clients involved in TV at the time were Chesebrough-Pond's, Liggett & Myers, Quaker Oats, Lever Brothers and Kodak.
In 1969, JWT went public, and Don Johnston was named CEO. Mr. Johnston took over a company weakened by business losses and a lack of stable top management. In the 1970s, JWT creatives began pushing into upper management ranks. The move coincided with heightened client concerns about the creative effectiveness of their advertising and marketing efforts.
In 1980, the agency established the JWT Group as a holding company in which J. Walter Thompson Co. was the largest subsidiary. Other units included the Hill & Knowlton PR firm, MRB Group and Lord, Geller, Federico, Einstein. Mr. Johnston presided over both companies as chairman-CEO.
The early 1980s was a time of rapid growth for the company, despite a scandal involving overbilling to clients for spot media buys by the agency's syndication department. Income and profits rose sharply, but in1986 the agency's advances seemed to stall, and a weakened JWT became a desirable takeover prospect.
In June 1987, the U.K.-based WPP Group announced that it intended take control of the agency. At first, JWT Group said it would not be acquired by WPP, a considerably smaller company, but after two weeks of negotiations, an agreement was reached and WPP bought JWT for $566 million. Later that year, Burt Manning, a former JWT executive who had left the agency a year earlier, returned and became chairman-CEO.
In 1999, Christopher Jones, the seventh CEO in the agency's history, led JWT to $1 billion in new-business gains—the largest in its history. By 2000, JWT's worldwide revenue exceeded $1 billion and its billings exceeded $10.6 billion, with new clients such as Sun Microsystems, KPMG, iPlanet, Spencer-Stuart, Foster's beer, Avon and Telecom Italia. The company broadened its international reach to 311 offices in 155 cities in 90 countries.
Mr. Jones left JWT in January 2001 and was succeeded by Peter Schweitzer, who had been president. In 2004, Mr. Schweitzer moved to the post of chairman while Bob Jeffrey, previously president, JWT North America, became president & CEO.
In 2003, JWT had worldwide revenue of $1.18 billion, up 18% from 2002. It had U.S. revenue of $456.2 million, a 15.9% increase over the previous year, and was the No. 1 agency brand in the U.S., according to Advertising Age.
In 2005, the agency changed its name, shortening it to simply JWT.