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Advertising Agencies

Thus, advertising agencies created full-color magazine ment appeared in newspaper inserts, in youth-oriented
advertisements for goods such as automobiles, refrigera- niche market magazines, and on television.
tors, and radios. Newspapers continued to use simple Advances in product design during the 1960s and
advertisements. In the 1920s and 30s, radio also became 1970s forced advertising agencies to become more creative
popular for home and family use as an inexpensive form in order to differentiate their client’s product from com-
of entertainment (Wells et al., 2000). Advertising agen- petitors’ equally good products. The resulting newer,
cies produced radio programs for the sole purpose of more creative advertisements proved both popular and
attracting consumers for popular national products. For profitable, allowing agencies to spend more money on
example, the term “soap opera” was coined by the Ameri- advertising research—often employing behavioral psy-
can press in the 1930s to denote these popular serialized chologists to design elaborate studies of consumer buying
domestic radio dramas. The “soap” in soap opera alluded behavior. All of this creativity had a cost: it became very
to their sponsorship largely by manufacturers of house- expensive to produce lengthy TV advertisements. Adver-
hold cleaning products (Museum of Broadcast Communi- tising agencies addressed the cost issue by designing
cations, 2005). thirty-second television commercials with memorable
The 1930s were a time of renewed public interest in advertising slogans short phrases designed to keep a con-
legislation concerning unfair and deceptive business prac- sumer’s attention and maintain recognition of a particular
tices. The Robinson-Patman Act of 1936 prevented man- brand of good or service.
ufacturers from providing promotional allowances to a As the cost of advertising rose, agency clients began to
retail customer unless it also offered promotional demand results for increasingly expensive ad efforts—in
allowances to that customer’s competitors. The 1938 the form of consumer research. During the 1980s and
Wheeler-Lea Amendments to the Federal Trade Commis- 1990s, many advertising agencies merged in order to
sion Act enabled the Federal Trade Commission (FTC) to remain financially competitive in this period of consolida-
protect consumers from deceptive advertising in the food,
tion and rising costs. Some agencies moved toward pro-
drug, therapeutic device, and cosmetic industries (Lane et
viding a range of marketing services options to clients,
al., 2005).
including direct marketing, sales promotion, and public
Although World War II suspended production of relations (Lane et al., 2005). Some advertising agencies
many peacetime goods and services, many advertising moved from traditional radio and TV advertising toward
agents found employment working for the War Advertis- sales promotion techniques such as rebates, coupons, and
ing Council, which was responsible for mobilizing public sweepstakes that offered measurable proof of increased
support for the war effort. This organization later became sales (Wells et al., 2000).
the Ad Council.
Evolution of the Advertising Agency from 1995 to the
EVOLUTION OF THE ADVERTISING Present. The traditional advertising agency is now facing
AGENCY FROM THE 1950S TO THE competition from many different directions. In recent
EARLY 1990S years, a number of advertising media companies have con-
The end of World War II saw a culmination of more than solidated their businesses. These large organizations have
a decade of unsatisfied consumer demand as a result of the sought to blend media, such as television, print, cable, and
Great Depression and war. Most markets for goods and Internet to be able to better design messages to meet indi-
services found a willing consumer base for new prod- vidual consumer needs (Lane et al., 2005). Some large
ucts—including television sets. Because television is a advertisers are directly employing branding specialists,
medium that combines the visual element available in media specialists and CRM specialists and dissolving their
print ads with sound and motion, this created a change in longstanding relationships with agencies in an effort to
the structure of advertising agencies. For example, prior increase the effectiveness of their marketing dollars. Mar-
to the 1950s, the main source of creativity was the person keting, branding and research consultancy firms have
writing the advertising message—referred to as the copy- developed, with each claiming to provide the strategic
writer. As television became more popular, the art direc- planning offered by agencies. In addition, media firms
tor and artist became more important (Wells et al., 2000). and production houses are now delving into concept
Between 1945 and 1960, large numbers of returning development (Williams, 2004).
veterans began to marry and have children—the genera- Present-day agencies employ many of the techniques
tion of children known as baby-boomers. For the first that were popular in the early years of advertising. News-
time in the United States, advertising agencies found it papers continue to advertise primarily in text format,
profitable to market certain goods and services directly to although color inserts are becoming popular. Advertising
the youth market. Ads for blue jeans and stereo equip- agencies continue to be able to advertise in smaller and

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