When did the "business of advertising" become the "advertising business"—a profession subject to shareholder value, stock-market fluctuations, and the success/failure of quarterly earnings reports?
In celebration of its 100th anniversary, the 4A's (American Association of Advertising Agencies) is taking a look to the past even as it prepared for the future with its Transformation 2017 annual conference. The esteemed trade organization has a rich repository of information that provides a full understanding of the industry it represents as well.
Forty-seven years ago, Advertising Age trumpeted, "Interpublic Joins Ticker Tape Parade That Includes Big Shops, Small Ones." In fact, the march to Wall Street and public offerings began when Rudolph Guenther-Russel Law—later known as Albert Frank-Guenther Law, and currently incarnated as The Gate Worldwide—sold a small number of shares to the public in 1929, just ten days before the stock crash. Atoning for its mistake in timing, the agency eventually repurchased its own stock shares.
As Marsha Appel, 4A's SVP/Research discovered, "It took another 33 years before other U.S. agencies ventured into public ownership, beginning with Papert, Koenig, Lois—out of business in 1981, presumably for reasons unrelated to going public—in 1962. The offering price was $6, about 25 times the earnings per share.
"Next was an agency that's still around, FCB, which took the plunge in 1963 with 500,000 shares priced at $15.50. DDB joined them in 1964 at $27/share."
These "baby steps," Marsha continued, were followed by the now-defunct Grant Advertising, Grey Advertising in 1965, Ogilvy & Mather in 1966, and the "late lamented" Wells, Rich Greene in 1968.
In June 1969, J. Walter Thompson, the biggest agency in the world at the time, raised more than $30 million with its IPO. Some smaller agencies jumped on the bandwagon as well, including Doremus (founded in 1903, and still operational under its original name as part of the Omnicom Group).
All told, there were 15 publicly owned agencies by 1970. Ad Age had its story, as much of the "business of advertising" had to report to shareholders as well as the enterprises that demanded their services.
"Then, as now," Marsha Appel adds, "the discussion about going public centered around balancing clients' and shareholders' interests."