How the Depression Shaped Modern Ad Biz

After the Boom Time of 1920s, the Game Morphed Into Survival of the Fittest

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The economic downturn will force advertising agencies to reinvent their economic models, ratchet up competition, shutter some units and give others a chance to shine. The agencies that survive will be the ones most able to mine for insights, manage new media and create messages that tap into the dreams -- and anxieties -- of these wrenching times.

That is, if history is any guide.

The Great Depression transformed advertising during the 1930s. Roland Marchand explored exactly how in his cultural history "Advertising the American Dream: Making Way for Modernity 1920-1940." While the book was published in 1985, it resonates today.

The 1920s were a fat decade for the ad business. Indeed, after the stock-market crash, some agencies boasted they could get the economy back on track. One, Erwin Wasey & Co., took out a newspaper ad in November 1929 that declared "All right Mister! Now that the headache's over, let's go to work."

But by 1932, Erwin Wasey was slashing staff and cutting by half the paychecks for remaining workers. It was hardly alone: Agencies cut summer vacations, forced people to take off time without pay and gutted staff.

Pressed, shops turned cutthroat. Before the Depression, Marchand tells us, most considered it "vaguely unethical and dangerously wasteful" to try to poach clients not in play. Economic necessity voided this gentlemen's agreement. "Every account was now 'hot' all the time," Marchand writes.

Adding to the challenge: Clients demanded the same level of service even as they spent less.

The Depression changed the look of advertising as well. The elegantly designed and illustrated work of the 1920s gave way to work that was "distinctively 'loud,' cluttered, undignified and direct." Much of the work was borrowed from tabloid newspapers: fewer words, multi-picture pages, busier layouts.

There were harder sells. Value messages became more explicit and direct. Price became the most prominent element in car ads, for instance. Marchand holds up Ruthrauff & Ryan as an agency that "got" advertising in the Depression.

Ruthrauff, previously an "often disparaged" mail-order shop, put its hard-sell experience to work. Its approach fit perfectly with the new tabloid aesthetic, and it had a knack for insights. It was Ruthrauff that warned the world in 1930 of "B.O." (body odor) in ads for Lever Brothers' Lifebuoy soap. Ruthrauff swiftly built a blue-chip client list.

But not every shop made it. Industry consolidation accelerated, and "many small agencies simply collapsed." The biggest agencies took their lumps as well -- perhaps none more so than November 1929 cheerleader Erwin Wasey, which managed to soldier on despite losing many key accounts (including Camel cigarettes) and, in 1935, a key talent named Leo Burnett.

The current downturn is not the Great Depression. That said, it's a fair bet the recession will accelerate the game-changing trends (paging Bob Garfield's Chaos Scenario) already besieging the industry. The question -- as it was 80 years ago -- is who can best tap into the messages (and media) that matter now.

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James B. Arndorfer is a former Ad Age reporter. He now works for MillerCoors.

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