NEW YORK CITY: A CENTURY IN THE SPOTLIGHT: BUSINESS WHERE OPTIMISM REIGNS HAS A RICH TAPESTRY IN CITY ENVIRONS

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I want more business."

George Batten's house ad for the little agency he had crammed into a 12-by-14-foot office at 38 Park Row in 1897 serves as a minor link with today's New York City-based advertising business, where optimism always reigns. The Batten agency's stronger link would come in 1928, when it merged with fast-growing Barton, Durstine & Osborn. Billing $32 million then, the company is now billing nearly $7 billion worldwide as part of its growth-oriented parent, the Omnicom Group.

OTHERS OPEN SHOPS

After the '28 merger, other Batten people followed advertising's self-renewing, never-easy spin-off process by opening agencies of their own. Former Battenites Chester Bowles and a fellow Yalie, William Benton, opened Benton & Bowles in 1929. And Ted Bates, another former Batten exec, opened shop a few years later.

Most New York City agency founders then, and now, were born elsewhere. Mr. Batten was from Gloucester County, N.J.; William Benton was born in Minneapolis; Chester Bowles in Springfield, Mass., and Ted Bates in New Haven, Conn.

At 39-41 Park Row in 1897, James W. Thompson was driving his J. Walter Thompson Co. to overtake Philadelphia's N. W. Ayer & Son and Chicago's Lord & Thomas for agency supremacy. Mr. Thompson had been a 20-year-old Navy veteran from Ohio when the Carlton & Smith agency hired him as an office assistant in 1867. He bought the agency in 1878 for $1,300, changed its name and rapidly transformed it from a religious magazines' specialist to an agency that would support a growing list of general and women's magazines.

Then, as now, the city was a powerful attraction. The author-essayist E. B. White would later label New York's newcomers "settlers" and credit them for giving it "passion."

Whatever qualities these passions unleashed in the Manhattan of 100 years ago-25 years before radio, 50 years before television-they led to a Golden Age that lasted until World War I. Ad agencies saw their first six- and seven-figure ad budgets to support campaigns for our first automobiles, new soaps, cookies, cereals, soft drinks, toothpastes and railroads. As print advertising proliferated, the city's literati issued warnings about advertising's harmful impact on taste, morals and mental health.

INCREDIBLE CLAIMS

The warnings were not entirely unjustified. True, magazines and newspapers were running respectable new campaigns, but advertising's legacy was rooted in incredible claims for quack potions and lotions. In the post-Civil War period, the U.S. emerged as the world's leading industrial nation, but advertising "agents"-usually uncertified wheeler-dealers-were hawking stuff like Brown's Iron Bitters with claims such as: "Removes all symptoms of decay in liver, kidneys and bowels . . . enriches the blood, strengthens the muscles and gives new life to the nerves." Muckraking journalists and authors were handed plenty of ammunition. And advertising agents were all but ostracized in the city's bustling commercial center, where they worked at cutting corners, rates and each other's throats with tainted media deals.

The notion that all advertising was a part of the flamboyant P. T. Barnum's "a-sucker-is-born-every-minute" tradition was furthered by Samuel Pettengill, a former associate of the nation's first ad agent, Volney Palmer of Philadelphia. Mr. Pettengill opened his Manhattan agency after the Civil War and became known for his wheeling and dealing.

COMMITTED TO REFORMS

But other agents were committed to reforming agency practices. Boston's George Rowell came to New York, opened his eponymous agency and pioneered in compiling newspaper circulation figures and ad rates for all to work with. He established a guaranteed payment system for publishers and zealously campaigned for "truth in advertising" in Printer's Ink, the magazine he founded in 1888. It would serve as the industry's dominant publication over the next 42 years-until 1930, when Advertising Age came along to challenge it. In Philadelphia, magazine innovator Cyrus Curtis and F. Wayland Ayer also fostered higher standards by offering commission-guaranteed contracts.

The New York of 100 years ago, when U.S. advertising volume was $540 million, teemed with the high-rollers of Wall Street, oil and railroad tycoons, real estate speculators, builders, garment shops, purveyors of food and entertainment. It encompassed only Manhattan and the Bronx. Brooklyn, Queens and Staten Island wouldn't join the city until 1898, when the population soared from 1,500,000 to 3,400,000.

LADIES' MILE

Madison Avenue was just a street of trolley tracks, brownstones and stores, best known for its Ladies' Mile-block after block of department and specialty stores, wending south from Madison Square Park at 23rd Street down to 10th Street. Many agency people worked near the park, described by Jack Finney in his novel "Time and Again" as a "drab and pleasureless place," filled "only at noon with office workers moodily eating lunches from paper bags, deserted much of the rest of the time except for a few derelicts."

Downtown streets were lined with brick buildings, their windowless sides covered with signboards or painted walls promoting biscuits, soap and tonics. A number of these buildings still stand. New elevated trains carried posters, as did their station platforms.

LUNCHEON MEETINGS

By 1896, the time was ripe for admen Charles Capehart, William H. Ingersoll, Frank Presbrey, George Rowell and others to begin meeting for lunch and building advertising's first glimmer of fraternity and professionalism. They called themselves the Sphinx Club-the effective beginnings of today's Advertising Club of New York. Some thought the name reflected their public silence about club activities. They met at the Fifth Avenue Hotel at Broadway and 23rd Street, where today the toy industry's center, 200 Fifth Ave., stands. They also used the Waldorf-Astoria Hotel, located on the Fifth Avenue site now occupied by the Empire State Building. Similar clubs were forming in other major cities.

ADVERTISING MEN'S LEAGUE

By 1906, as New York fussed over its new IRT subway line, the Sphinx Club became the Advertising Men's League, with Mr. Capehart as president. In 1914, Mr. Ingersoll, the league's third president, signed a 10-year lease on space in the Midtown Club at 47 E. 25th St., and membership was broadened to include salesmen, academics, media representatives, advertiser and marketing professionals. Dues were $15 a year.

Committed to industry self-regulation, professional training and good fellowship, the league hooked up with the Associated Advertising Clubs of America, an amalgam of agency, advertiser and media executives that would later split and form the Association of National Advertisers (in 1915) and the American Association of Advertising Agencies (1917).

After voting to incorporate as the Advertising Club of New York in 1915, they produced the city's first Advertising Exposition, held in the city's original Madison Square Garden. The first professional training course, Mr. Ingersoll's lectures at New York University, pre-dated the club's Advertising & Selling course, which it still conducts. Golf outings and holiday parties also were part of the club's program.

WOMEN STRIKE BACK

The city's advertising women, offended by the league's "men only" policy of that era, created the League of Advertising Women in 1912, noting that Meta Volckmann, Mary Compton and Mathilde Weil were running all-women agencies in the 19th century. In 1911, Helen Lansdowne, a brilliant Cincinnati-based JWT copywriter, was transferred to JWT's New York office, and her mentor, Stanley Resor, JWT's Cincinnati office head, became New York VP-general manager in 1912. By 1914, JWT was billing $2.7 million and rapidly overtaking Ayer as No. 1. Ms. Lansdowne and Mr. Resor, who married in 1917, led the agency for the next 50 years.

Harrison King McCann was another legendary-and lucky-New York agency-builder. He accepted the job of ad director at Standard Oil in 1911, only months before the U.S. Supreme Court ordered the company's breakup. No problem. He was allowed to set up the H. K. McCann Co., with Standard's half-dozen spin-off companies as clients. McCann merged with Alfred Erickson's agency in 1930, creating McCann-Erickson.

MARION HARPER ACTS

Thirty years later, Marion Harper Jr., the 44-year-old head of McCann, put together his Interpublic Group of Cos. The conglomerate's four divisions consisted of his agency acquisitions and new collateral-service units. Twenty-five years later, when New York's biggest agencies would go through their Saatchi & Saatchi-inspired "Big Bang" merger period, the Interpublic concept served as a model.

As Manhattan's agencies moved northward to new skyscraper Midtown office buildings, the flourishing Ad Club moved in 1924 from its East 25th Street quarters into the Stanford White-designed J. Hamilton Robb mansion at 35th Street and Park Avenue. The elegant building, with its winding marble staircase and 16th century Italian Renaissance fireplace, cost $277,500.

After U.S. Vice President Charles Dawes dedicated the refurbished building, Ad Club members honored industry leaders and public figures at weekly luncheons that were broadcast on network radio. Honorees included explorer Adm. Richard Byrd, the Prince of Wales, IBM's Thomas Watson, Franklin D. Roosevelt, New York Mayor Jimmy Walker, Dwight D. Eisenhower, Herbert Hoover and Bernard Baruch. The club's maitre d' for 44 years, Simon (Sam) Levine, would say, "Only nice people, gentlemen, come here."

Another luncheon speaker was the legendary Lord & Thomas leader, Albert D. Lasker, who would sell his agency to Emerson Foote, Fairfax Cone and Don Belding in 1943.

COMMUNICATIONS CENTER

New York became the world's media and communications center when radio and television, two powerful engines for advertising growth, burst forth. It was magazine and newspaper companies' propinquity that explained the city's agency concentration 100 years ago, but it was the city's great agency concentration that served as its key asset when the new electronic media arrived.

Radio's Roaring '20s gold rush began when the Queensborough Corp. paid radio station WEAF $50 for 10 minutes' worth of commercials. Aired on Aug. 28, 1922, the ads generated $27,000 in sales for the company's new apartment complex.

Advertising and show business were quickly, inextricably joined. There were singing commercials, soap operas, variety shows, mystery series, news shows, comedy, dramatic sketches and music formats for agencies to create, usually for single-company sponsorship, as in "Jell-O again. This is Jack Benny."

'NOT A PUBLIC PLACE'

Printer's Ink opposed all of it. "The family circle," it wrote, "is not a public place, and advertising has no business intruding there unless it is invited."

Predictably unimpressed, agencies enthusiastically turned to their new work. Slogans abounded. One, "Calling all men, calling all men-to Barney's" became a local catchphrase. As did the "Ballantine Blast," a beer sponsor's home-run ID during broadcasts of Yankees' games. In 1923, when copywriter Ray Rubicam and new-business ace John Orr Young left Ayer to open Young & Rubicam, they immediately set up a radio department.

New Yorkers were enjoying movies, joining book clubs and buying "hit" records and radio sets in the mid-'20s, and the advertising business gladly went with the flow, adapting Sigmund Freud's teachings to its copy platforms. Dr. Freud held that persuasion was rooted in one's ability to make others sensitive to their own shortcomings. Thus, agencies developed "whisper copy," techniques that sensitized people to the woes of halitosis (bad breath) for Listerine, body odor (Mum deodorant), pink tooth brush (Pepsodent) and athlete's foot (Absorbine Jr.). Thirty years later, in 1957, Vance Packard's book "The Hidden Persuaders" explored this technique in depth and became a classic.

DEPRESSION HITS HARD

When the Great Depression began in October 1929, U.S. media billings were at a record $3.4 billion. By 1933, the figure was $1.3 billion. Layoffs, salary cuts and hard-sell advertising took over. Clients pressured agencies for rebates and free add-on services. BBD&O's Bruce Barton noted in 1934 that the Depression brought with it abandoned ideals, lowered standards and "silly, dishonest, disgusting advertisements."

Batten, Barton, Durstine & Osborn's high profile-it still used the ampersand then-led Alexander Woollcott, the city's resident wit, to observe in '32 that the name sounded "like a trunk falling down the stairs." Picked up by radio comedian Fred Allen, the line would wrap one more banner of frivolity over an agency business already accustomed to ridicule, if not disrespect.

GOING ALONG WITH IDEAS

In those days, Mr. Woollcott would appear in Muriel cigar ads even though he never smoked cigars. Among other "names" who went along with advertising's ideas were: Babe Ruth, who endorsed cigars, gasoline and Packard and Cadillac cars; Marianne Moore and e. e. cummings, who borrowed advertising copy techniques and layouts for their poetry, and Dorothy Parker, whose epigrams showed up in ladies' underwear copy she wrote at Vogue. F. Scott Fitzgerald, once a copywriter at Barron Collier Inc., would later use advertising techniques to promote his literary efforts. (Ogden Nash also was a writer at Mr. Collier's agency.)

Authors continued to deliver many jabs at advertising. "Through Many Windows," an ad-bashing 1926 work by Helen Woodward, an account exec at the Frank Presbrey agency, became a best-seller and helped new consumer organizations recruit members.

IN FOR THE WAR'S DURATION

With the advent of World War II, agencies, clients and media quickly enlisted for the duration, creating and underwriting war-related government campaigns and public service programs. The TV revolution that arrived after the war became, in a sense, a reward. By 1949, some agencies were placing more than half their media budgets into TV, simply creating video versions of their radio commercials and using radio's single-sponsor concept.

New York's intellectual community, meanwhile, held that TV was special and should not follow radio's path into commercialization. They saw TV as a cultural gift to the masses. As TV networks and stations chose the commercial route, assaults on advertising intensified and "Madison Avenue" attracted more flack. Among the incidents that helped give life to "Madison Avenue" as a pejorative was a Grey Advertising executive's admission on a '57 TV talk show that he used Crest toothpaste. Grey was promptly fired by Kolynos, its toothpaste client. Critics had a field day.

FIFTH'S IMAGE UNASSAILABLE

Why focus on Madison Avenue, not Fifth Avenue? One block west of Madison, Fifth actually contained more agencies than Madison. But Fifth already had an image (upscale stores), and so popular novels and motion pictures branded Madison Avenue into advertising's hide in the '40s and '50s, when the "three-martini lunch" came to symbolize the adman's lifestyle.

Comics picked up on "adspeak," as in "Let's run it up the flagpole and see who salutes." In 1956, when anthropologist Margaret Mead said that "Madison Avenue" had lowered America's cultural standards, the charge took on official status. No wonder that in '58, author Martin Mayer would title his more objective book about the ad business "Madison Avenue, U.S.A."

The post-war period brought the democratization of New York's agencies, a growing open-door policy that fed creative departments a procession of street-smart, home-grown New Yorkers such as George Lois, Jerry Della Femina, Ron Rosenfeld, Julian Koenig, Bob Giraldi and Bill Bernbach.

Mr. Bernbach, a founder of Doyle Dane Bernbach in 1949, preached creative unpredictability, put art director and copywriter teams in cubbyholes together, and sparked "different" campaigns. For Ohrbach's, a local department store: "Liberal trade-in. Bring in your wife and just a few dollars. . . . We'll give you a new woman." And: "You don't have to be Jewish to love Levy's real Jewish rye." The creative revolution was under way. New York, and the world, would never be the same.

TURNS TO A CHIMP

After Papert, Koenig, Lois put Xerox on the map with a TV commercial featuring a chimp making office copies, the agency went public in 1962. Agency gatekeepers were shocked. Public ownership of agencies? Terrible idea. But they soon would go public themselves.

For African-Americans, however, there were no open doors. One seasoned black marketing executive, David Sullivan, optimistically opened an agency in 1941. It lasted only six years. A few agencies hired black executives to handle "special market" campaigns, but no organized recruitment efforts were in place. During the '60s civil rights movement, black activists made a small dent after picketing outside agency offices to demand more job opportunities and greater use of black Americans in ads and commercials.

Black Americans already in the business formed the Group for Advertising Progress to open doors for others. But after 30 years, the city's agencies are still grappling with "minorities" problems. Women, on the other hand, have fared much better in the advertising world.

To its credit, the agency business responds enthusiastically when called upon to do pro bono work for deserving organizations and causes, including equal opportunity programs. In '68, when racial tension ran high in the city, Young & Rubicam contributed a memorable "Give a Damn" campaign to promote racial understanding. There are hundreds of other examples of volunteer agency campaigns that address the city's problems.

And there is the celebrated "I Love New York" tourism campaign by Wells, Rich, Greene for New York state and Broadway. A paid effort, it serves as a prototype for tourism marketers.

Though burdened with a huckster image, agency people go on sharing their talents, ideas, money and creative energy with the city's public and private organizations. They serve, with little fanfare, as directors and trustees of important museums, colleges and organizations dedicated to music, dance, theater, education, charities of all descriptions, foundations and neighborhood groups. Nevertheless, these skilled opinion-shapers understand that, as they help the city, they do little to sell the public on the legitimate role advertising plays in a democratic society.

Certainly, the annual "Advertising Day" proclamations by New York's mayors do not change opinions. Advertising still serves as a whipping boy every time it gets enmeshed in local public policy disputes. Proposals to generate city revenue through advertising? No matter how discreet, the notion inevitably triggers fierce opposition.

$30 BILLION IN BILLINGS

Today, the city's significant agencies-numbering about 500, with more than 30,000 employees-support local, national and global media operations along with thousands of other allied businesses and services. Their $30 billion in billings place New York City as No. 1 in U.S. rankings, second to Tokyo's $36 billion worldwide. For creative work, Manhattan's perennial claim to worldwide leadership continues to be challenged on every continent.

New York's agencies survived the "Big Bang" mergers of the 1980s that brought instant wealth to many, downsizing and unemployment to others, and renegotiated compensation arrangements with unhappy clients to all. Now the city's agencies are adapting to the new interactive and integrated marketing environments.

EMIGRATED FROM HOMELAND

As the 20th century winds down, they're slowly abandoning their Midtown "homeland," heading south, frequently to the neighborhoods favored by the 19th century advertising pioneers. The Ad Club, for example, sold its Park Avenue mansion in 1977, after it became inconvenient and too costly, and eventually settled 16 blocks south, at 19th Street.

Clearly, the optimistic George Batten knew his audience 100 years ago when he asked only for New Yorkers' business. Respect? Admiration? That would have to

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