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Then and Now: a Quick Trip Through the Ad Age Archives

Reflecting on the Industry's Changed Approach to Topics Such as Compensation Models, Car Marketing and Consumer Targeting

By Published on .

With its booze-swilling characters and smoke-filled sets, AMC's "Mad Men" provides a weekly reminder of what agency life was like decades ago. But there's only so much history you can squeeze into an hour-long cable-TV show. With that in mind, we took a quick trip through the Ad Age archives, picking a few big issues to uncover how things were then vs. now.

Car Shopping, Madison Avenue Style

It's no secret that client-marketer relationships used to last a lot longer on average than they do today, but that was especially true in the auto sector. As Ad Age pointed out in 1958, Detroit was once considered an "adman's dream," with relationships so secure that "many a dying motor company kept its agency right up to the time of typing the obituary notice." But the ground was starting to shift that same year, with Buick, Chrysler and Lincoln all going into review. The unrest was considered a big development at the time. But while marketers were getting tougher on agencies, ad execs, it seems, were skeptical about what auto execs really knew about advertising. "It's astonishing how naive those people are about our kind of business," said one unnamed adman.
The ground really never stopped shifting. In automotive, like every other industry, agencies are only as good as their most recent campaign, it seems, with CMOs at car companies unafraid of making big changes. Just last month General Motors made waves when it created Commonwealth, an alliance between rival holding companies Omnicom Group and Interpublic Group of Cos. to handle global creative for Chevrolet. In 2009, Chrysler ended its decades-long relationship with BBDO. As for the auto-marketing execs, they seem to be held in much higher esteem in adland than their "naive" predecessors. Execs such as Ford marketer Jim Farley and Chrysler CMO Olivier Francois, for instance, are getting their fair share of credit for Detroit's rebound.

Going Public

In the first half of the 20th century, ad agencies operated as privately-owned businesses. But in a sign of things to come, the American Association of Advertising Agencies in 1963 voted to change its constitution to allow for members to be publicly owned. And sure enough, the Mad Ave. rush to go public was on. In the 1960s and early '70s, agency after agency began selling stock, including Foote, Cone & Belding (1963), Doyle Dane Bernbach (1964), Grey (1965) J. Walter Thompson (1969) and Interpublic Group (1971). By 1973, Ad Age was outlining the pros and cons of public ownership. The upside? Access to capital, tax advantages and "the huge payout accruing to stock-selling agency principals," according to one story that year. The downsides included loss of privacy for confidential agency information and "resentment by lesser employees when they learn of the big money at the top."
These days, publicly-owned shops are just a fact of advertising life, with the field dominated by agencies housed under big publicly-traded holding companies such as WPP, Omnicom Group, Publicis Groupe , Interpublic and Havas. But adland remains in flux. Consolidation continues with a steady pace of deals. This year, for instance, MDC Partners scooped up New York-based R.J. Palmer, one of the few independent media shops left. Publicis, meantime, has doled out billions in recent years to buy up big digital agencies such as Digitas, Razorfish and Rosetta. But at the same time, a few shops are breaking free from holding companies, such as Translation and MWW, which both recently bought their independence from Interpublic. The looming question is if consolidation will hit the holding-company level. Aegis and MDC are rumored takeover targets.

Women in Advertising

Here was an actual topic at the annual meeting of the 4A's in the early '60s: "Are women as good as men, creatively?"
One can only wonder how that struck the only woman on the panel, Margaret Hockaday, of Hockaday Associates. Charles Brower, of Batten, Barton, Durstine & Osborn, "rated women creatively equal with men," according to Ad Age 's account of the meeting, but he threw in this rather sexist footnote: "The women don't like each other, is all." In the end, the panelists, which included legendary adman Bill Bernbach, "rated the ladies on par with their creative male colleagues and all said they hire women." Glad they cleared that up.
Today, several female CEOs helm agencies and women dominate in the freelance ranks. Still, there's a dearth of female creatives at the senior level. It's a lot easier to break through than it was in the Mad Men era, of course, when young women seeking work on Madison Avenue were pigeonholed into roles as typists or secretaries, as author Jane Mass described in her new book, "Mad Women." Ms. Mass recalls that Shelly Lazarus, now chairman of Ogilvy & Mather, was only offered secretarial jobs at the start. "I didn't type that well, and it didn't sound that interesting to me," Ms. Lazarus said in the book. "A woman who worked at one of the agencies suggested that I get an MBA. She said, 'I think if you have an MBA, they can't make you type.'"

Money, Money Money

In the early 1970s, agencies overwhelmingly got paid based on commission, especially at big shops, which got only 5% of income from fees, according to 4A's figures cited by Ad Age in 1973. But agency execs began calling for a new approach, including David Ogilvy, who found it to be "unrealistic to expect an agency to be impartial when its vested interest lies wholly in the direction of increasing [the client's] commissionable advertising." The seeds of change were sowed in 1956 when the 4A's and five media trade organizations signed consent decrees with the Justice Department prohibiting the trade groups from encouraging or requiring members to stick a 15% commission on advertisers' media buys.
Agencies remember the days of commissions fondly. Fee-based compensation now dominates, thanks to the consent decree and the fact that advertisers began working with separate creative and media-buying shops. And margins for many shops are slimmer than they were post-recession, as many shops are being asked to do more with smaller marketing budgets. But the debate on compensation still rages, with many agencies advocating a "value-based" system in which compensation is tied to performance outcomes, such as measurable sales goals, rather than linking it to a straight fee system.

Consumer Targeting

In 1960, data-driven advertising had taken hold. But Paul Foley, exec VP at McCann Erickson, sensed it had gone too far, with agencies relying too much on statistics to target the "average" consumer. At a meeting of the 4A's, he criticized his colleagues for "an almost pathological tendency today to seek a norm -- more often than not a quantitative one." He added: "All the tracks on graphs are simply the tracks of human beings in the vigorous act of being human. Averages cannot communicate with averages. "Predicting "an era of individualism," he said the "only communication, finally, is the personal approach -- person to person."
Data-driven advertising is still with us, of course. But it's a lot more sophisticated than in Mr. Foley's day. And in one sense he was prescient: The explosion of media channels, including digital, has allowed marketers to segment better than ever, coming pretty close to the person-to-person approach Mr. Foley favored. They are just using data to do it.
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