The Advertising Agency
( Originally Published Early 1900's )
Advertising is a development of the advertising agency, and the advertising agency is a development of advertising. This seems a somewhat paradoxical statement, but the truth of it will be quickly recognized by those who have had much experience in the advertising business.
The so-called advertising agency is responsible for the development of modern advertising as an art and as a business. It is through the work of the advertising agency that the manufacturer and merchant have been aroused to a realization of the value of advertising.
The agency is the link between the advertiser and the publisher. It has blazed the way for the producer to reach the consumer. It has brought the maker of a commodity in touch with all the possible users of that commodity. It has pointed out the way to larger markets. It has shown the manufacturer how to create a demand for his product many times larger than the original output of the business.
Here is an old and well known firm engaged in the manufacture of farm wagons. By slow process of natural accretion along conservative lines the firm has built up a great business. It has grown with the natural agricultural development of the country, sup-plying the natural demands of this development for a cheap but well made farm wagon. It is satisfied with doing the farm wagon business of the country.
But there comes a time when the firm, in order to meet the competition of the day, has to branch out into the carriage business, and when it branches out into manufacturing a general line of vehicles it finds that it must meet competition fiercer and more formidable than anything it ever encountered in the farm wagon business. Along comes the advertising agent who tactfully and skillfully leads the head of the firm to the high mountains of publicity. He outlines to the awakened manufacturer the plan for reaching the thousands of possible purchasers of carriages and other vehicles and how it is possible in this way to create a demand that will be easily felt by all the general sales agents and branch houses all over the Union. The firm has been doing the farm wagon business along conservative lines. Advertising is a new proposition. Yielding to the arguments of the advertising agent a small appropriation is made for a campaign in news-papers and magazines. The following year the appropriation is increased, perhaps doubled. This annual appropriation for advertising becomes a fixed and established item in the yearly cost of production almost as important as the appropriations for the purchase of raw material. In this way the advertising agency has developed the advertising business of the country.
In this way the agency has not only enriched the manufacturer or producer but it has increased the earnings of the magazine, newspaper and other instrumentalities that may be used for the advertisement of the manufacturer's wares. Incidentally and obviously the agency has thereby given us better newspapers and better magazines. The modern ten cent magazine, a marvel of twentieth century progress, would not have been possible without the advertising agency which has filled its pages with profitable advertising. Occasionally some publisher who is not favored with what he regards as his share of business by the advertising agencies raises the questions: what is the future of the advertising agency? Shall it be allowed to dominate the advertising business, exacting toll at both ends of the publicity highway?
A few years ago the press was discussing the question: "What shall we do with the automobile; has it come to stay?" Such questions no longer engage serious discussion. The automobile is here and it has come to stay. It is now simply a question of development along practical lines.
The same may be said of the advertising agency. It is here to stay. Why shouldn't it "dominate" a business which it has developed? Why shouldn't it exact toll from those who use the highway which it has built? It is true that a few manufacturers and merchants would be advertising today if the advertising agency had never existed. It is true that a certain number of purchasers would have discovered the value of advertising as a means of reaching a larger body of consumers, but how meager the results and how crude the methods compared to those incident to the modern highly developed, well organized, colossal business of advertising !
Before extending these general observations regarding the development of the advertising agency it may be well to inquire:
First, what are the functions of the advertising agency?
Second, what kind of service does it render the advertiser ?
Third, is the agency an indispensable factor in mod-ern advertising?
In answer to the first question it may be said that it is the business of the agency to expend the appropriation of an advertiser in such a way as to secure for him the largest possible returns from the expenditure. Its service to the advertiser consists in buying space in the particular mediums which are best calculated to reach the kind of people who can be interested in the particular commodity advertised. The agency can usually buy this space—particularly in newspapers—to better ad-vantage than can the advertiser. The reason for this is plain and simple enough. It is not only buying space for you but for dozens of other advertisers. A man who gives a magazine ten pages of advertising in one month can naturally buy space cheaper than you can. The agency, indeed, is entitled to some advantage over the man who buys one page. Its advantage is represented by a commission or by a reduced rate, or both. It is in a position to demand some concession from the publisher, and it gets it. I am speaking here of the agency which renders an honest service and which honestly selects the mediums that are best adapted to reach the possible purchasers of such an article as the one advertised. To expend an appropriation for advertising corsets in an outdoor magazine read chiefly by men would be a dishonest service ; to stuff a list of mediums with magazines that have little or no circulation is a dishonest, inefficient service, for it will not bring to the advertiser the results he has a right to expect from his expenditure.
Having selected the proper mediums, the properly equipped and organized agency proceeds to make a thorough study of the commodity to be advertised and also acquaints itself with the business of its client. It should take up the trade relations as between the client, jobbers and retailers. An illustration of this is furnished by the action of a well known agency which had just se-cured the appropriation for advertising a well known watch. Upon securing the account the agency immediately sent a man out on the road who made calls on over a hundred jewelers and dealers in watches, talking to them in relation to this watch company's business and endeavoring to find out whether the watches were satisfactory to the trade; whether the margin of profit was sufficient; whether the styles were such as appealed to customers; which watch was the best seller; which gave the best satisfaction ; what sections of the country were showing the best results.
Having made a study of the product and the selling organization, the agency can plan an advertising campaign based upon the information adduced; and the most important feature of this campaign will be the preparation of "copy" for the advertising and the designs for pictures to attract attention to the "copy." Most agencies have a complete editorial and art equipment for this purpose. For all this service the agency charges both the publisher and the advertiser a commission. The advertising agent's connection with his client should be very confidential and very close. He should be fully informed as to whether the trade is in-creasing or diminishing; what sections of the country are showing the best sales and what publications are proving profitable. He should keep his finger on the pulse of the advertiser's business and regulate his advertising accordingly.
While these are the functions of the modern advertising agency, it is a fact that the larger corporations, whose annual sales run into the millions and whose business largely depends upon advertising, employ advertising managers or directors who make a study of the product and its advertising possibilities, who are in the atmosphere of the business and in close touch with the selling organization. Where a firm has its own advertising director, who prepares "copy" and designs, the service of the advertising agency consists largely in buying space and in relieving the advertiser of the multitudinous and onerous details necessary to conduct an extended advertising campaign. The agency makes contracts for space and assumes all financial risk, using its credit and standing to secure the publisher of the magazine or newspaper against loss.
Having considered the peculiar character of the service rendered by advertising agencies, the question arises : is the agency an indispensable factor in modern advertising? The obvious answer is: yes. The agency is likely to be a permanent factor in modern advertising for the reason that it controls most of the advertising of the country. Having developed most of the advertising, the agencies are in a position to demand that the publishers shall stand by them and protect them. It is gratifying to observe in this connection a constant tendency on the part of the publisher to raise the financial requirements and the standards of service on the part of the agency to the end that the irresponsible "brokers in space" may be eliminated from the business.
In my opinion the efficiency of agencies is men-aced by two tendencies:
First, a tendency to reduce an advertiser's campaign to a sort of "coupon system" whereby the plates are prepared in advance for an entire year; second, a tendency to take up contracts with too many clients, thereby making efficient individual service impossible.
Of course, the "coupon system" has its advantages for the agencies. It simplifies the work very much to prepare twelve magazine plates for the year in advance, cutting off "copy" coupons, as it were, each month, and forwarding them to the publishers. It becomes mere clerical routine. The business is out of the way and the agency need not be bothered by this client for a whole year. But this sort of service will not satisfy the modern, aggressive, up-to-date advertiser.
Such a system makes it impossible for an advertiser to incorporate in his advertising the new ideas and suggestions that develop from week to week. It deprives him of the opportunity to effectively utilize the fruits of experience gleaned in the selling field. If the goods are changed or improved or the methods of selling are altered, it is easy to make new advertising plates, but this involves an extra expense which the advertiser may be unwilling to incur. In most manufacturing enterprises the advertising manager may get a new idea regarding the product every day in the year.
Advertising should, therefore, be a matter of development from month to month. The tendency to impair individual service is also increased by taking on too many clients.
In my opinion, the ideal advertising agency of the future will be one which takes the business of a few advertisers and gives to each the careful and painstaking study which is best calculated to make his advertising yield the largest returns from the annual investment.