Fundamentals of Advertising

John Wilmshurst,Adrian Mackay

• Publisher: Routledge
• Year: 2010
• ISBN:
  9781136401640
• Edition: 2
• Topic: Business
• Subtopic: Business General
• Index: Business

The Fundamentals of Advertising is widely recognized as the most comprehensive and informative introduction to the area for both professionals and students. The new edition has been fully revised and updated and provides a comprehensive coverage of the whole business of advertising and its associated promotional areas, including public relations, sales promotion and sponsorship. The authors use a wide range of examples to illustrate their themes and an informative series of guidelines and checklists of value not only to students but to those applying the various techniques. Topics the authors examine include: The role of the advertising agencies, Planning advertising campaigns, Setting budgets, The scope of below-the-line promotion, How advertising materials are created and produced, The issue of control in advertising, International advertising.

Part I What advertising is about

Chapter 1 This advertising business

DOI: 10.4324/9780080507064-1

‘… advertising grew naturally out of the social, economic and commercial developments which took place at an earlier stage in our history.’

T. R. Nevett, Advertising in Britain – A history, Heinemann, 1982

By the end of this chapter you will:

• Appreciate the long history of advertising and how it became the force it is today;
• Have an overview of how the business is made up;
• Understand its size and importance in modern life;
• Have a grasp of how it fits into the economic and social scene.

1.1 The space age business from the mists of time

As this book first took shape in the 1985 first edition, the ‘information technology’ revolution was already under way. Cable television was widespread in the USA and about to start trials in the UK. Satellite television was waiting in the wings. Direct response TV advertising through computer links was being developed. A mere ten years later, all these things had become commonplace. Now we have a new set of possible ways of advertising available, from fax to the Internet, and who knows what else.

Advertising is an inescapable part of our lives and very much involved in the rapidly changing technology of the world we live in.

But advertising in one form or another has been with mankind ever since trading began. Certainly it was well established in ancient Greece and some actual examples were recovered from under the volcanic ash that preserved the ruins of Pompeii.

1.1.1 The origins of modern advertising

Advertising as we know it however stems from that earlier time of rapid change, the Industrial Revolution. Historians argue about the dates when this began and ended but for our purposes it can be said to have happened in the UK during the second half of the eighteenth century and the first half of the nineteenth.

During that period a number of things produced the climate in which advertising could develop:

1. Population expanded rapidly from 6 million in 1740 to 12 million by 1821. Improvements in agricultural methods meant fewer workers were required in the countryside at the same time as industrial development provided more jobs at better wages in the towns.
2. This growth and concentration of population was accompanied by improved transport systems. Better roads, then canals and railways, made the movement of goods more efficient. This in turn meant that the processes of distribution and selling became much cheaper.
3. Thus the ingredients for mass production and eventually mass marketing were coming into being.
4. Printing had existed since the fifteenth century (the earliest surviving British advertisement was produced by Caxton about 1477). But during the eighteenth century, newspapers had developed strongly from 25 titles with combined circulations of 1,500,000 in 1700 to 258 titles with combined circulations of 16,085,000 in 1800.¹
   In the early days particularly, the number of readers was probably much larger than the circulations would suggest. Some copies were available in coffee houses and reading rooms, where each would have been read by very many people.
   At the beginning of this period, advertising in newspapers was one insignificant method amongst many more important ones – including posters, broadsheets and tradesmen’s ‘cards’ (sheets containing not merely their name and address, but listing their wares). There were even ‘advertising engines’ – horse-drawn wooden towers covered with posters – as well as ‘sandwich-men’ who carried boards in front and behind them on which advertisements could be placed. The latter were a regular feature of city life well into the twentieth century and occasionally reappear even today. However, during the first half of the nineteenth century, advertising in newspapers developed very rapidly indeed. Dr Nevett¹ has been able to chart this growth from the House of Commons Accounts and Papers, since advertising during this period was subject to a tax.
   In 1800 the revenue collected was £76,668 14s 0d representing 511,258 advertisements. By 1848 there was £142,674 2s 0d collected representing 1,902,322 advertisements (the rate of tax changed over the period).
   Advertising in the press – newspapers and an ever-growing number and variety of magazines – assumed the major role among all the other media. In terms of share of total expenditure it still retains prominence as we enter the second millennium (see Section 1.3.2) in spite of the growth of first the cinema, then radio and television. (Radio was the last of these three to carry advertising in the UK although in many other countries it was an important advertising medium before television came into being.)

1.2 The development of advertising as a business

The commercial potential of advertising in a growing number of newspapers and periodicals was quickly grasped by many of the prospering businesses that developed to serve the expanding populations of the fast-growing industrial towns. These many advertisers placing the advertising in a wide range of advertising media waited only for the third partner to come into being – the advertising agencies. These three groups constitute the main sections of ‘the advertising business’ – the advertisers spending money to communicate with their markets, and finding it useful, then as now, to use advertising agents to place their advertisements in the wide range of media.

1.2.1 The early advertising agencies

It has usually been considered that the original role of advertising agencies was not their present one of serving the advertisers’ interests (see Chapter 6).

However, Dr Nevett¹ makes a strong case that their role has in general never been greatly different from what it is today, although there may have been some aberrations along the way.

What the advertiser needed, therefore, was someone who could keep track of the rapid changes taking place in the newspaper world, advise on the suitability of a particular journal, write the copy if required, simplify accounting procedures and ease cash flow problems by granting credit. These were the services offered by the early agents; and as newspapers began granting them commission, advertisers were able to benefit in effect ‘free of charge’.

According to Nevett, the ‘space farmers’ – agents selling space for a single publication, or a small number of publications – only came into being much later (around the end of the nineteenth century). Even then this was regarded by many as undesirable and the already established alternative system of the agent acting on behalf of the advertisers much to be preferred. Even so Nevett quotes Paul Derricks, head of a well-known advertising agency, stating in 1907 that of the 336 firms calling themselves advertising agents: ‘A close scrutiny of the list would prove that according to the modern accepted definition of the term, fully 300 of 336 are not to be considered as advertising agents’. This was because all kinds of people sold space on behalf of the media without in any way offering the service we would now expect of an advertising agency. So that although Mather and Crowther (later Ogilvy Mather) had a staff of 100 in 1894 and were already offering an in-depth service, many ‘agencies’ were little more than space brokers.

It was well into the twentieth century before fully-developed advertising agencies were operating on any significant scale. The ‘full service agency’ (see Sections 1.3.1 and 6.2.6) did not really emerge until the middle of the twentieth century. By the 1980s it was already no longer regarded as the indisputable norm. A wide variety of types of agency now exists, to suit the differing needs of advertisers (see Chapter 6).

Advertising agents first appear in the records during the late eighteenth century, the earliest known being William Tayler (from an advertisement he himself took in the Maidstone Journal in 1786). James White, friend of Charles Lamb founded an agency in 1800. In 1812 the partnership of Lawson & Barker started, soon to be known as Charles Barker and continuing under the same name to this day. (In 1981 the Charles Barker group was the tenth largest agency in Europe in terms of gross income, but later lost that status – the agency business is a very volatile one.)

1.2.2 Some early advertisers

Newspapers could and did sometimes survive without advertising revenue but increasingly became dependent on it. Advertising agents certainly cannot exist on their own. But the real basis of the rapidly growing advertising business was the advertisers who financed it all.

Some of today’s big spenders on advertising are companies who were already using advertising early in the nineteenth century – Crosse & Blackwell, Schweppes and Hedges and Butler among them. At that time, according to Nevett, the most important category of advertising was auctioneers’ notices with 16 per cent of the total, followed by retailers with 13 per cent. Medical products advertising represented only 6.5 per cent although then and since they attracted a disproportionate amount of attention because of their outrageously extravagant claims such as that for Dr Roberts’ ‘Poor Man’s Friend’ ointment in 1855, offering … a certain cure for ulcerated sore legs, if of 20 years standing, cuts, burns, scalds, bruises, chilblains, scorbutil eruptions, and pimples on the face, sore and inflamed eyes, and cancerous tumours …’

Dr Nevett notes, ‘By mid-century there were some obvious changes in the advertisement columns, reflecting the growing division between manufacturing and retailing. More retailers seem to have been using the newspapers …’ This division grew of course and as mass manufacture developed, the ‘typical’ advertiser became the manufacturer using advertising both to create demand amongst his consumers but also to exert pressure on retailers to stock his products.

Only in the mid-twentieth century have we seen a substantial check in this development. The growing size and power of large retail chains has switched the emphasis back to retailers’ advertising expenditure. This point is discussed in Section 2.3.5.

However, this brief look at history shows that there is nothing new about retailers investing in advertising expenditure on a large scale. Thus Heals spent £6,000 in 1855 and by the early years of the twentieth century Gordon Selfridge was spending £...