From Marbles in the Soup and Ray Kroc's New Franchise to Ed Artzt and the Birth of Online Marketing -- It's Ad Age's Biggest Moments in the Last 75 Years
The rich history of advertising has been filled with watershed moments. Ad Age has been counting down the 75 biggest moments in the last 75 years in the weekly newspaper since January. The 15 biggest moments as determined by the editors of Ad Age are:
15 Marbles in the soup and corrective advertising
In 1968, a creative team at BBDO, New York, slips some marbles into a bowl of Campbell's vegetable soup to keep the vegetables from sinking to the bottom. This seemingly innocent effort sparks a Federal Trade Commission probe and becomes the basis for the FTC's efforts to eliminate false ads with a practice that allows it to demand "corrective advertising" from an advertiser that has made a false claim. Although Campbell Soup Co. agrees to pull the advertising (despite arguments that without the marbles the soup appeared as if it had less vegetables than it actually did), a group of law students calling themselves Students Opposed to Unfair Practices (SOUP) complain that would not rectify the false impressions consumers were given by the ads. The group suggests Campbell run ads that correct that impression.
While the FTC does file a lawsuit against Campbell that drags on until 1972, the initial complaint is eventually dropped without requiring Campbell to run corrective advertising. It's also later learned that the complaint was brought up by archrival H.J. Heinz Co. Despite the warning to others inherent in the case, a variety of other marketers have been called to task. In 1990, for example, Volvo Cars of North America is embroiled in a similar snafu regarding the use of rigged cars in a supposed true re-enactment in a series of "monster truck" ads.
14 National Advertising Review Council
With the establishment of the National Advertising Review Council in 1971, the industry wakes up to a simple rule: There's only one person who pays as much attention to your ad messages as you do, and that's your competitor. On this premise rests the breakthrough that makes real industry self-regulation possible.
A system of codes and volunteerism isn't working. By 1969, cigarette advertisers have become a special embarrassment. In March, Advertising Age accuses the tobacco industry of provoking a series of "legal disasters" for the entire ad industry, and asserts, "It is time [the tail] stopped trying to wag the dog."
In the spring of 1970 the American Association of Advertising Agencies, American Advertising Federation and Association of National Advertisers approach their ancient antagonist, the Council of Better Business Bureaus. In 1971, they become equal partners in the National Advertising Review Council. Part cop, part conscience, the NARC oversees a National Advertising Division to investigate complaints against advertisers. A National Advertising Review Board hears appeals. It opens for business in November 1971 and tackles its first case the next May. The goal: consider each case on its merits, typically involving narrow issues of truth and accuracy. A Children's Advertising Review Unit is created in 1974.
After a brief flurry of activity, consumer challenges decline. It's the advertisers that become the fiercest watchdogs-not over themselves, of course, but their competitors. The logic is elemental and enduring. The NARC works because it's tough enough to satisfy consumer advocates, business-minded enough to respect advertising's role in the marketing process and effective enough to keep the Federal Trade Commission off the industry's back.
13 First Japanese car sold in U.S.
Toyota Motor Corp., today the largest Japanese carmaker in the U.S. market, stumbles in fall 1957 with its debut in the States. The automaker's first imported car to the U.S., the Toyopet Crown, is popular in its home market. But Americans shun the tanklike, four-door sedan. Toyopet's 105 horsepower and top speed of 50 mph also fail to sate the American need for speed. Toyota sells just 288 of the cars in 14 months. In 1961, Toyota Motor Sales pulls out of the U.S. market, so Japan can develop a car more appropriate for Americans. The carmaker returns to the U.S. in 1965 with the four-door Corona, touting it as an affordable, reliable, well-built and fuel-sipping sedan. Better results this time. In 1972, Toyota reaches U.S. sales of 1 million and Japanese manufacturers challenge Detroit nameplates for consumer loyalty.
12 Free speech on Madison Avenue
In the U.S. Bicentennial year of 1976, the First Amendment finally extends its protection to that often-controversial form of speech known as advertising. The U.S. Supreme Court in the past has specifically said that commercial advertising is not protected by the First Amendment (Valentine vs. Chrestensen, 1942). So free speech is never an excuse for deception, as Colgate finds in 1965 when the Supreme Court upholds a Federal Trade Commission ruling against its famous Rapid Shave sandpaper commercial.
But 10 years later, when the Virginia State Pharmacy Board tries to block drugstores from advertising prices, a state consumer group objects. With deception not an issue, in 1976 the Supreme Court finds that advertisers have First Amendment rights and that promoting prices is part of that freedom. Four years later, in the Central Hudson case, the court clarifies: The First Amendment applies only to legal products and ads that are not misleading.
But what about tobacco, a legal product that's been restricted for a decade? To accommodate these realities, the court carves an exception in the form of "government interest." But it must be "substantial " enough to outweigh First Amendment rights and extend no further than necessary to satisfy that interest.
11 Ray Kroc extends the McDonald's franchise
Long before the clown, before the obesity uproar, there were just two observant brothers. After noticing that a hot dog vendor is the only guy making money in their Depression era southern California town, Richard and Maurice McDonald shut down their Glendora, Calif., movie theater and start a drive-up barbecue in 1937.
By 1940, the entrepreneurial brothers have packed up and moved to San Bernardino in search of more steady business. Turned down by a local banker for a $7,500 loan in exchange for a one-third stake in their business, Dick and Mac McDonald tough it out through several lean years. By 1948, the menu has expanded to hot dogs, burgers and steaks, though service is slow and inefficient.
So overnight, the brothers ditch the carhops and custom orders, and simplify their menu to a pre-made 15? hamburger and 19? cheeseburger served on paper plates; 20? milkshakes; and french fries, Coke, orange and root beer drinks, each for a dime. Lines grow to 200 long, and within a few years their sign says, "Millions served." Brother Dick devises the famous Golden Arches when the duo starts to franchise. In 1955, milkshake machine salesman Ray Kroc trades in his Multimixers for his own franchise in Des Plaines, Ill., the ninth McDonald's outlet. Mr. Kroc acquires the chain in 1961 for $2.7 million in cash. Today, McDonald's Corp.'s generates revenue of upwards of $20 billion as the world's largest fast-food chain and is one of the 20th century's top five marketers.
10 Doyle, Dane and Bernbach open agency
A new ad agency opens its doors on June 1, 1949, at 350 Madison Ave. in New York. The principals of Doyle Dane Bernbach are Bill Bernbach, former VP-creative director at Grey Advertising; former Grey account supervisor Ned Doyle; and Maxwell Dane, proprietor of a small eponymous ad agency. A decade later, DDB wins the Volkswagen account and proceeds to create one of the most legendary ad efforts of the legendary 1960s, the "Think small" campaign. DDB effectively ushers in advertising's so-called "creative revolution."
In addition to creating other renowned campaigns for Avis, Alka-Seltzer, the Democratic National Committee and, of course, VW, DDB fosters the careers of such influential industry luminaries as Carl Ally, Ted Bell, Bob Gage, Julian Koenig, Helmut Krone, Bob Levenson, George Lois and Phyllis Robinson. But most importantly, it shapes the organization and ethos of today's creative departments.
The agency introduces the now-standard approach of pairing copywriters with art directors to form creative teams, and pioneers the use of humor, self-deprecation and reflection on advertising itself, all of which remain the touchstones of creative advertising today.
9 Marlboro Friday and the generic challenge
On Friday, April 2, 1993, Philip Morris Cos. cuts the price of its flagship Marlboro brand about 40%, dropping the parent company's share price by 23%. The move is aimed at slowing the market-share growth of discount cigarette brands, which have surged to account for about one-third of industry sales. This drastic step involving America's No. 1 cigarette brand becomes known as "Marlboro Friday"; it reverberates to other package-goods stocks and dramatically underscores the inroads being made by generics at the expense of premium brands in numerous categories. Marlboro's tactic helps it and other premium brands recover some market share from discount rivals.
8 The Big Bang, ad world's deal of the decade ('80s)
In the decade of the deal, the deal of the decade is consummated on April 25, 1986, when Doyle Dane Bernbach of New York and Needham Harper Worldwide of Chicago merge to form DDB Needham, and simultaneously join with BBDO to form Omnicom Group, a holding company representing combined billings of nearly $4 billion.
It's called the "Big Bang," and in a way it's true. With Omnicom, the merger activity that's been brewing for several years moves to another level, creating a new "universe" in which agencies now have to survive. For two weeks, Omnicom revels in its standing as the world's largest ad organization, only to be topped when Saatchi & Saatchi snaps up Ted Bates Worldwide at twice its book value in May. It's Saatchi's furious buying spree that, in part, triggers the Omnicom deal. On April 24, Saatchi makes a serious bid for DDB, the prospect of which is so frightening to the agency that merger talks with Needham assume a desperate urgency. The next day, DDB's John Bernbach, Needham's Keith Reinhard and BBDO's Allen Rosenshine reject the Saatchi offer and seal the Omnicom deal. It's the beginning of a beautiful friendship that will pit the holding company against WPP Group and Interpublic Group of Cos. in constant competition for leadership.
7 Ed Artzt P&G speech/birth of online marketing
It is the speech that launched a million clicks. In May 1994, Edwin L. Artzt, chairman-CEO of Procter & Gamble Co., stands before the American Association of Advertising Agencies and says, "We can't be sure that ad-supported TV programming will have a future in the world being created-a world of video-on-demand, pay-per-view and subscription television." Mr. Artzt warns, "There is a very real possibility that the majority of programs people watch will not be advertiser-supported." He admonishes his listeners to get up to speed with technology and to leverage it. The speech sends ripples of panic throughout the advertising community, which sets about trying to protect the 30-second spot. His predictions and warnings actually resonate more a decade later than they did in 1994, as TV watching declines and media consumption is fragmented among TV, the Internet and other ad options. In 2005, new media include the Internet, gaming devices, music players, cell phones and video-on-demand. A 4A's conference keynoter in 2005 is Comcast CEO Brian Roberts, who declares, "Now there's no doubt that the TV and PC are becoming fully integrated."
6 New Coke, or don't tinker with success
We have just two words for any marketer toying with the idea of updating a venerable, iconic brand: New Coke. It should be enough to make the marketer think twice. Still smarting from the 1975 "Pepsi Challenge" taste-test battle, Coca-Cola Co. President-Chief Operating Officer Robert Goizueta sanctions "Project Kansas," a top-secret mission to reformulate Coke. He appoints Coca-Cola USA head Brian Dyson, who taps marketing chief Sergio Zyman to head the endeavor. Mr. Zyman and company test a new, sweeter version of the flagship cola with 190,000 nationwide taste tests at a cost of $4 million. In 1985, Mr. Goizueta is chairman-CEO. Word of the new product leaks out and Pepsi dispatches its own press assault claiming victory. "The other guy blinked," Pepsi says in ads saying Coke reformulated its brand to taste "more like" Pepsi. The press hammers at Mr. Goizueta to explain the difference and what will happen to the old Coke, which 39% of consumers still favor. When Mr. Goizueta admits that it will do away with the old formula, consumers revolt. Dazed by the backlash, management on July 11, just 79 days later, agrees to bring back the original formula, renaming it Coca-Cola Classic.
5 Wal-Mart opens 1st storeand changes retailing
The Bentonville Behemoth actually gets its start in nearby Rogers, Ark. with one store in 1962. Wal-Mart Stores' Bentonville headquarters doesn't open till 1970, the same year the company goes public.
Sam Walton, a 44-year-old retailer, already has a small chain of five-and-dime stores in Arkansas and Kansas when-faced with competition from regional chains-he decides the discount retail concept is the wave of the future. Mr. Walton and his wife, Helen, put up 95% of the money for the first, 16,000-square-foot store.
Early growth is slow; Wal-Mart doesn't open a store outside Arkansas until 1968. But the expansion accelerates in the 1970s, and Wal-Mart reaches $1.25 billion in sales by 1979. It's the largest U.S. retailer in 1990. In '91, Wal-Mart opens its first international store in Mexico.
Wal-Mart's growth is built on a platform of "Low price always" for a growing assortment of products, as the store concept grows to add Supercenters that include pharmacies and grocery sections. The credos "We sell for less" and "Satisfaction guaranteed" have been on the facade of every store since the Rogers location. Since Wal-Mart is the largest merchant client to most package-goods companies, its support has been key in establishing new retail technologies, such as the bar-code scanner. Wal-Mart changes the retailing paradigm, with its buying power forcing suppliers to do it the Wal-Mart way or not at all. Wal-Mart's growth makes it admired in the financial community but reviled elsewhere. It's been accused of devastating small local merchants in the communities it enters and of hurting the U.S. economy by its dependence on low-price Chinese-made products.
4 Harper revolutionizes the agency business
Marion Harper Jr., at 31, becomes president of McCann-Erickson in 1948. In the next two decades, the ambitious, hard-driving visionary builds McCann into the world's second-largest agency and revolutionizes the business by creating Interpublic Group of Cos. By the time he's 51, however, Mr. Harper falls from grace.
Mr. Harper, fresh from Yale, enters McCann in 1939 as a trainee. By the mid-'40s, he's running the research department, earning his credentials by creating a factor analysis study of what makes a successful print ad. As president, Mr. Harper systematizes agency operations by instituting procedures for developing and reviewing all client work. He also spins off McCann's publicity, sales promotion and research functions, typically dead-end agency departments, into separate profit centers to compete on their own.
But account conflicts, direct and indirect, caused by client growth through diversification increasingly impede growth among all agencies. Mr. Harper attempts to neutralize such conflicts by acquiring Marschalk & Pratt in 1954 and maintaining it and other McCann units as parallel agencies. Marketers are unconvinced. Then in the early '60s, Mr. Harper creates Interpublic as an umbrella for his agencies, much like a General Motors Corp. housing competing auto units.
The Interpublic model (augmented by its going public in 1971) continues to be the industry growth model: By 2004, an estimated 65% of the world's ad and media-buying revenue flow through the six leading holding companies, of which Interpublic ranks third.
Still, it isn't until 1998 that the American Advertising Federation acknowledges Mr. Harper as an innovator by voting him into its Hall of Fame. The following year, Advertising Age names him the second most-significant ad person of the century (after Bill Bernbach) in its "Advertising Century" special edition.
3 Advent of TiVo/consumer control
From the moment the first TiVo box ships on the morning of March 29, 1999, the mass-marketing linchpin that is TV prime time is living on borrowed time. The advent of a video recorder that allows consumers to watch what they want when they want-and without the commercials if they choose-changes forever the advertising model that emerged in and dominated the 20th century.
TiVo itself isn't a roaring success: Five years after its launch, it has penetrated less than 1% of U.S. homes, with around 2.3 million subscribers. But other devices of the same ilk as TiVo, which has achieved the dubious distinction of having its brand name applied generically to all digital video recorders, are now linked to TVs in about 5% of U.S. homes, and Forrester Research estimates that will grow to 41% by 2009. TiVo's deal this month with Comcast to be the DVR for its 21.5 million subscribers certainly helps TiVo's chances.
Whether TiVo succeeds, the start-up spearheads a new era of time-shifted TV viewing, which erodes the reach of each 30-second prime-time TV ad. Even more than that, however, TiVo is the poster child for a new era in which the consumer controls his or her media. From the Internet to the Apple iPod to digital radio and a dizzying array of mobile devices, technology has handed the public the power to choose the exact nature of their entertainment-leaving the intrusion-based ad model, on which Madison Avenue and mass marketing were founded, looking outmoded. Vanguard marketers and agencies have already woken up to the need for change. Most notably, perhaps, on Feb. 3, 2003, at Advertising Age's Madison & Vine conference, Steve Heyer, then president of Coca-Cola Co., declares: "If a new model isn't developed, the old one will simply collapse."
2 Advertising hits the TV airwaves
Mark down July 1, 1941, as the birthday of the bathroom break.
That's the first day the Federal Communications Commission allowed TV stations to switch from experimental to commercial broadcasts. NBC New York affiliate WNBT becomes the first of 22 FCC licensees to air sponsored programming. The first ad takes the form of a "time signal" featuring the face of a ticking watch, sponsored by Bulova Watch Co. Procter & Gamble Co., Lever Bros. and Sun Oil join Bulova as TV's first sponsors, paying $100-including time and studio costs-for the privilege of branding quarter-hours of programming that reach fewer than 5,000 households in the New York metropolitan area.
With only one station airing ads-and so few sets in the market-Advertising Age concedes that "the significance of the transition from experimental to commercial broadcasts was largely historical." The outlook for the medium's expansion is bleak. The day commercial TV debuts, only 10,000 sets are available.
By 1955, however, more than 900 marketers have begun advertising on TV and expenditures have surpassed both magazines and radio to become the leading marketing medium in the U.S., with revenue topping $1 billion. By 2004, more than 200 million sets are in use in the U.S., and TV ad spending tops $50 billion.
1 Neil McElroy memo on brand management
The Depression is less than two years old, and Franklin Roosevelt had yet to arrive with his New Deal. But fast-rising Procter & Gamble Co. executive Neil McElroy already has an idea about brand management that will unleash the power of unfettered competition within P&G to pull it through the hardest of times and change the marketing world forever.
The seeds of Mr. McElroy's idea come two years earlier in 1929 as he, only five years out of Harvard and four years out of the P&G mailroom, works on the launch of Camay. He's among P&G executives who decide the new soap is hampered by "too much Ivory thinking." As Camay "brand supervisor," he promptly fires its ad agency, Blackman Co. of New York, replacing it with Pedlar & Ryan.
With Camay on the upswing, so, too is Mr. McElroy. By 1930, he is the marketing executive in charge of P&G's first overseas subsidiary, Thomas Hedley & Co., where he attacks a walled city of a market, the U.K., which is dominated by archrival Unilever. Mr. McElroy returns to the U.S. determined to reshape the company's management system. So he crafts a memo to his supervisor in the promotion department on May 13, 1931, outlining the new position of "Brand Man." It is an idea so big that he exceeds P&G's strict one-page limit for memos, consuming a remarkable three.
"This outline does not represent the situation as it is but as we will have it when we have sufficient manpower," writes Mr. McElroy, who proposes substantial new hiring amid the Depression to fill out the ranks of the new system with assistant brand men.
"Where brand development is light," he says, these brand men would study the brand's past advertising and promotional history, distribution territory, retailers and consumers first-hand to "find out the trouble." After "uncovering our weakness," they would develop plans to correct them and get authority from division managers to execute the plans.
He takes "full responsibility, not simply for criticizing individual pieces of printed word copy" but for the entire "printed word plans" and all advertising expenditures-as well as experimenting with and recommending "wrapper revisions."
The system is based on Mr. McElroy's conviction that the competition between brands and a cluster of separate organizations would keep P&G from losing its edge no matter how big it got. It helps spawn P&G's dominance of such categories as laundry detergent, shampoo and dish soap behind brands with sometimes competing but sometimes very similar positions.
"When the brand men have approached their fullest responsibilities, they should be able to take from the shoulders of the Division Manager and of the District Managers a very heavy share of individual brand responsibility," writes Mr. McElroy.
That the idea works might best be proved by the fact that P&G never laid off anyone during the Great Depression, with its market shares in soap and detergent reaching 40% and 69%, respectively, by 1951. Mr. McElroy becomes president of P&G by 1948.
The basic principle of one manager for each brand, in charge of its marketing and fighting for its share growth against all foes inside and outside P&G, would drive the company for decades. P&G's system becomes the model for many competitors and marketers in other industries. Only in the mid-1980s does P&G begin tinkering with the system as it ushers in the era of category management. Some brand managers take on multiple small brands, and regional general managers sort out distinct positions within brand portfolios.
"The brand manager job is becoming a place where it's about influencing your cross-functional counterparts," Brian Niccol said when he was P&G Pringles brand manager in 2004 before being promoted to corporate associate marketing director for in-store integration. "I view it as carrying the torch of the brand equity."
contributing: james b. arndorfer, claire atkinson, jonah bloom, mercedes m. cardona, r. craig endicott, robert g. goldsborough, jean halliday, jim hanas, kate macarthur, john mcdonough, jack neff, kris oser, stephanie thompson
MILESTONEs to date
75 Advertising Age launches
74 Birth of reality TV
73 Gannett launches USA Today
72 Food marketers consolidate
71 Motivational research emerges
70 RJR retires Old Joe
69 Action for Children's Television founded
68 Food, Drug & Cosmetics Act passed
67 Absolut vodka is launched
66 Townsend Brothers/copy testing
65 Edsel introduced
64 "A diamond is forever"
63 MCI competes with AT&T
62 Fox network debuts
61 Tampax starts educating women
60 LBOs shake up marketing world
59 Birth of Univision and Hispanic TV
58 Advertising Council formed
57 Reese's Pieces soar via "E.T."
56 Emergence of "positioning"
55 Compensation consultant at IBM
54 Mary Wells' WRG raises the bar
53 Census 2000: a wake-up call
52 Nike signs Michael Jordan
51 Marlboro Man saddles up
50 Buick ads back used cars
49 Beginnings of syndicated TV
48 Breaking ad talent race barrier
47 Universal Product Code unveiled
46 Bank of America charges ahead
45 J&J's Tylenol tampering case
44 Bubble bursts as dot-coms crash
43 "Star Wars" saga begins
42 Avis declares that it's No. 2
41 Gallup applies research skills
40 Cigs "hazardous to your health"
39 Ike's "Man From Abilene"
38 "Pepsi Generation," the cola wars
37 Nielsen tracks share of market
36 Beverages go "light"-ly
35 Apple Computer's "1984" commercial
34 Photo-driven Life on newsstands
33 Reeves' Unique Selling Proposition
32 Start of cable, satellite-delivered TV
31 "Bug bomb" & aerosol can technology
30 Quiz-show scandals change TV buying
29 Birth of the daytime soap opera
28 HotWired runs first Internet advertising
27 Remote-control device arrives
26 Vance Packard's "Hidden Persuaders"
25 Y&R's Whole Egg
24 Levittown opens
23 Communications Act of 1934
22 African-Americans enter ad industry
21 Nader and consumer advocacy
20 WPP buys J. Walter Thompson
19 FDA approves DTC drug advertising
18 MTV makes its debut
17 Agencies unbundle media departments
16 Bob Jacoby's big pay day