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Although the Toronto agency Holtby, Meyers & Co. was placing advertising in newspapers in the late 1870s, it is generally acknowledged that the first true advertising agency in Canada was A. McKim & Co., established in Montreal in 1889 as a newspaper advertising agency.

Anson McKim, who worked in the ad department of The Mail newspaper in Toronto, was sent to Montreal in 1878 to open the first interprovincial branch advertising office of a Canadian newspaper. In an effort to secure more business, Mr. McKim began compiling rates and data on other newspapers and formed the Mail Advertising Agency. This effort culminated in the publication of the "Canadian Newspaper Directory" in 1892, the first complete listing of Canadian newspapers and periodicals.

By then, however, Mr. McKim had left and opened his own agency, A. McKim & Co., in January 1889. Mr. McKim was one of a group of pioneering founders of Canadian agencies that bore their owners' names; others included Harry "Red" Foster, John Aiken "Jack" MacLaren, Warren Reynolds, Russell Kelley, James Lovick and Palmer Hayhurst. Branch offices of U.S. agencies entered the market in the 1890s, the J. Walter Thompson Co. being among the earliest.

Emergence of an industry

The earliest advertisers in Canada were British companies whose products were already well known by the immigrant population from Great Britain. Among the first were soap makers such as Pears' Soap, which had been advertising in England since 1880 and in the U.S. since 1883, and Lever Brothers, which began advertising Sunlight soap in 1891. Other products soon followed, including baking powders, meat extracts (such as Oxo and Bovril), cocoa and chocolate candies, cereals and ales.

Arguably the most influential modern Canadian agency was MacLaren. The agency began in Toronto as a branch office of U.S. agency Campbell-Ewald, Detroit, which had been established to service the Canadian General Motors Corp. account in 1923. Six years later, branch manager Jack MacLaren bought the agency; he has been called the "dean of Canadian advertising."

In 1929, Conn Smythe, owner of the Toronto Maple Leafs, granted sole rights to MacLaren for broadcasting hockey games from the soon-to-be-built Maple Leaf Gardens. The deal, made over a handshake on a golf course, is regarded as the most significant event in Canadian radio advertising history. "Hockey Night in Canada," sponsored by GM and later Imperial Oil and Molson, began broadcasting in 1931 and soon became a Canadian institution.

MacLaren was the first agency in Canada to establish separate departments for radio, advertising research, direct mail, sales promotion, poster and store display. By 1954, MacLaren was Toronto's largest advertising agency.

By the time the Canadian Broadcasting Corp. was founded in 1955, MacLaren dominated TV; agency staff wrote and produced about 85% of network programming, including "General Motors Presents," "Cross Canada Hit Parade," "CGE Showtime" and "Hockey Night in Canada."

By 1960, MacLaren was Canada's largest agency. In 1988, the Interpublic Group of Cos. bought MacLaren and merged it with Lintas Worldwide, naming the new entity MacLaren: Lintas. In 1995, MacLaren absorbed McCann-Erickson operations in Canada, and the agency was renamed MacLaren McCann.

Leading agencies and advertisers

In 2001, MacLaren McCann was the country's No. 2 agency in gross income ($83.3 million), slightly trailing Cossette Communications Group, Quebec City ($83.4 million), but the clear leader in billings, at $603.96 million. The rest of the top 10 included Young & Rubicam Canada, BBDO Canada, Publicis, DraftWorldwide, Ogilvy & Mather Canada, Palmer Jarvis DDB, FCB Canada Worldwide and Carlson Marketing Group.

Canadian advertising agencies have always been concentrated in the population centers of Toronto and Montreal. Because many agencies are subsidiaries of U.S. shops, the U.S. influence on the Canadian advertising industry is a significant and continuing concern among leading Canadian advertisers.

In the early 1960s, only three agencies among Canada's top 15 were foreign owned. By 1984, seven of the top 10 agencies were still Canadian owned and operated. However, many independent Canadian agencies—such as James Lovick Ltd. and Baker Advertising, and Ronalds-Reynolds—disappeared as a result of mergers and acquisitions, many involving U.S.-owned agencies and holding companies.

In the late 1980s, the trend toward U.S. ownership of Canadian agencies was accelerated by the purchase of F.H. Hayhurst Co. by Saatchi & Saatchi and Ronalds-Reynolds by Foote, Cone & Belding. In the early'90s, Interpublic acquired two of the biggest Canadian agencies: Foster Advertising was absorbed by McCann-Erickson and MacLaren was merged into Lintas. By 1999, only one of the top 10 agencies, Cossette Communications, founded in Quebec City in 1972, was Canadian-owned.

The volume of advertising spending in Canada in 2001 was estimated at $5.3 billion, according to Advertising Age. Broken down by media, 39% went to TV, 39% to newspapers, 13% to radio, 5% to magazines and 4% to outdoor, with online ad spending pegged at $71.9 million.

A unique culture

Because economic decisions frequently outweigh national or cultural considerations, Canadian advertisers often use ads and commercials conceived and produced in the U.S. Yet some Canadian ad executives contend that the apparent similarities between the two countries are misleading. A former president of Foster Advertising has said that "to be productive, advertising must take into account the ethnic, cultural, linguistic and regional diversities of Canada." An obvious difference between the countries is that Canada has two official languages, English and French, so campaigns must be developed and communicated in both languages.

To fully understand the nature of Canadian advertising, one must appreciate the presence of U.S. advertising in Canada—both from media spillover and the use of U.S. commercials in the country—and its cultural impact. Both English- and French-speaking Canadians have strong feelings about the possible dilution of their unique cultures. A report by the Special Senate Committee on Mass Media in 1970 illustrated this concern:

?The degree to which the advertising industry borrows from foreign cultures and attempts to persuade listeners or viewers to alter attitudes and habits unique to Canada should be of concern in the preservation of our own way of life . . . To the greatest possible extent, such agencies should be controlled by citizens of this country. The decisions which will affect profoundly the buying habits of consumers and the marketing procedures of our industries should be taken by those who understand and wish to protect those attitudes which distinguish Canadians from other inhabitants of the North American continent."

Government regulation of advertising is generally more restrictive in Canada than in the U.S., with the Canadian Radio Television Commission and the Department of Consumer & Corporate Affairs having major oversight for Canadian advertising.

Provincial governments also have significant power over advertising, such as regulating alcohol advertising on a province-by-province basis. In 1980, the province of Quebec passed Bill 72, which virtually eliminated all broadcast advertising aimed at children under age 13. The resulting lack of ad support significantly reduced the amount of French-language children's programming in Quebec, leading some legislators to consider revising the bill.

Industry groups are organized along the same lines as in the U.S. The Institute for Canadian Advertising represents agencies, while the Association of Canadian Advertisers represents advertisers. The ICA (originally called the Canadian Association of Advertising Agencies) was organized in 1905 and incorporated as a trade association in 1923. In 1957, the Canadian Advertising Advisory Board was incorporated by the ICA and the ACA to administer a Canadian Code of Advertising Standards. That function has come to be performed by an organization called Advertising Standards Canada.

As in other countries where advertising is a significant industry, Canada honors its creative advertising with a host of awards shows sponsored by organizations including Magazines Canada, the Television Bureau of Canada, the Radio Advertising Bureau and Mediacom, an outdoor advertising organization. By far the most prestigious and sought-after annual prize is the Marketing Award given by Marketing magazine.

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