Is great advertising great
because of great ideas?

The J. Walter Thompson Company, once one of the world’s leading advertising agencies, claimed to be the “idea” agency.

In an adver­tis­ing cam­paign that ran in For­tune Mag­a­zine, in 1934 and 1935, the J. Wal­ter Thomp­son Com­pa­ny addressed pow­er­ful per­sons in busi­ness or indus­try on the impor­tance of “ideas” in great advertising.

“If J. Wal­ter Thomp­son Com­pa­ny has dis­tinc­tion,” they explained in one adver­tise­ment, “it is the dis­tinc­tion of find­ing and rec­og­niz­ing and using ideas, relat­ed to prod­ucts, which pen­e­trate the armor of human indif­fer­ence, and strike the emo­tion­al spark with human need.”

In this adver­tise­ment fea­tur­ing the 11th Pres­i­dent of the Unit­ed States, JWT—as the agency was com­mon­ly called in the adver­tis­ing indus­try— claimed “It is the abil­i­ty of adver­tis­ing men to find a good idea, and rec­og­nize it when they have found it, and keep using it that deter­mines their suc­cess, and the suc­cess of their clients.”

an advertisement built upon an idea

JWT point­ed out that a great deal of mon­ey is spent for adver­tis­ing which lacks an idea; for adver­tis­ing in which the sec­ondary factors—clever lan­guage, “tech­nique”, fic­ti­tious excitement—masquerade as an idea.

In the “Remem­ber the Alamo” adver­tise­ment below, JWT points out that every adver­tis­ing cam­paign need the ral­ly­ing point of an idea. A dis­tinc­tive con­cep­tion of the product’s use­ful­ness in terms of human need.

“The small­er the cam­paign, the greater the need,” the adver­tise­ment says. “Sheer weight of space can make a prod­uct impres­sive, but this is an expen­sive sub­sti­tute for an idea, and wide open to pun­ish­ing attack on the day when a wor­thy com­peti­tor arms him­self with an idea.”

printers devil
Such a pity that agen­cies and adver­tis­ers today have for­got­ten JWT’s cre­ative approach. Too many of today’s TV com­mer­cials rely on the “sec­ondary fac­tors” described by JWT as “clever lan­guage, tech­nique, fic­ti­tious excitement—masquerading as ideas.”

The J. Wal­ter Thomp­son Com­pa­ny was incor­po­rat­ed in 1896 by Amer­i­can adver­tis­ing pio­neer James Wal­ter Thomp­son. It became one the world’s most suc­cess­ful ad agen­cies on the strength of clas­sic cam­paigns for brands like Ford, Kraft, Kel­log­g’s, Unilever, and the US Marines. In Novem­ber 2018 J. Wal­ter Thomp­son merged with anoth­er major agec­ny Wun­der­man to become Wun­der­man Thomp­son

The com­pa­ny ini­tial­ly was a bro­ker­age; it bought space in news­pa­pers and sold that space to adver­tis­ers. As more and more local busi­ness­es adopt­ed adver­tis­ing to pro­mote trade, these ear­ly “whole­salers” evolved from sim­ply being sell­ers of space: Writ­ers and artists were added to the sales force sell­ing the space—since sell­ing space was achieved more eas­i­ly when the adver­tis­er was shown visu­al exam­ples of how an adver­tise­ment might actu­al­ly look in a news­pa­per. This was the fore­run­ner of the agency in the role of ren­der­ing a com­plete ser­vice to the advertiser. 

Enter­pris­ing agen­cies rep­re­sent­ing major adver­tis­ers entered into con­tracts with news­pa­per pub­lish­ers that paid com­mis­sion for space sold. 

Agen­cies earned com­mis­sions vary­ing from 5% to 25%. By World War I, the com­mis­sion became stan­dard­ized at 15%. And when out­door adver­tis­ing became a pow­er­ful medi­um and when broad­cast media entered the mar­ket, the com­mis­sion sys­tem was adopt­ed by all media. 

And so evolved a unique fea­ture of adver­tis­ing agen­cies: the agency cre­at­ed adver­tise­ments for the adver­tis­er, tech­ni­cal­ly worked for the adver­tis­er, but was paid by the media! 

An agency is appoint­ed by an adver­tis­er to han­dle his account, but it makes con­tracts with media in its own name, as an inde­pen­dent con­trac­tor and not as anyone’s legal agent with respect to the pur­chase of space and time. That is to say, if a client doesn’t pay its bills, the agency is nev­er­the­less respon­si­ble and, con­verse­ly, if the agency defaults, the medi­um will not look to the adver­tis­er for payment. 

This stan­dard­iza­tion of com­mis­sion also includ­ed “agency recog­ni­tion” grant­ed at first by indi­vid­ual pub­lish­ers but even­tu­al­ly grant­ed by asso­ci­a­tions to which media belonged. Asso­ci­a­tions grant­ed recog­ni­tion to agen­cies that already had adver­tis­ers, the abil­i­ty to serve those adver­tis­ers and finan­cial capac­i­ty to meet the cred­it stan­dards of the media.

printers devil
Today there is no sin­gle “stan­dard” basis for agency com­pen­sa­tion by adver­tis­ers. The var­i­ous meth­ods of agency com­pen­sa­tion will be set out in anoth­er post on this website.