Not many noticed the demise of this iconic name. For more than 145 years, it was an integral part of the advertising industry, one of the most influential and glamorous professions of all time. Two weeks ago, there was an announcement that advertising agencies Wunderman Thompson and VMLY&R will merge. The combined entity will be known as VML. For the first time since it began, the industry will have not have a ‘Thompson’ for businesses to engage for their advertising work.
In 1864, Carlton and Smith founded a firm to sell advertising space in religious journals. This firm was purchased by James Walter Thompson (JWT) and renamed accordingly in 1878. Since then, the name ‘Thompson’ has been on the doors of advertising agency offices throughout the world.
Many of the services of the ad agency as we know it today were pioneered by JWT. It opened a consumer research department in 1915, hiring professional academics such as John B. Watson, who was an early exponent of behavioural psychology. JWT was the first agency with a ‘consumer panel’ to do regular analysis of the buying habits of families. The Thompson-plan (or T-plan) was the industry’s first attempt to bring scientific rigour to the creative craft of making an advertisement. The T-plan explained in detail every step that strategic and creative teams must take to create persuasive advertising.
Thousands of professionals, including me, learnt the basics of the business and flourished as persuasion professionals while working at a Thompson agency. Just the other day, I was telling my team about the difference between a marketing target audience (TA), an advertising TA and a creative TA, as I learnt from the T-plan document.
The rigorous processes that JWT instituted were adopted by many other agencies, especially after World War II. This was a period when a cigarette brand for women, Marlboro, was transformed into the ultimate symbol of masculinity. In the post-war scenario, when anything related to Germany was despised, Volkswagen cars became an American favourite. It was also the time when Avis rent-a-car service, a distant No. 2 to the market leader, reminded Americans that the lines at their counters were shorter. It was the industry’s golden era.
These visible successes in influencing human behaviour had its critics too. The 1957 book Hidden Persuaders by Vance Packard admonished ad agencies for using psychological methods to tap unconscious desires in order to persuade people to buy various products. Regardless, the ad industry always attracted some of the best talent.
The industry’s fall from grace was a slow process that started a few decades ago. Fault-lines had started appearing in the 1990s. The strategic and creative teams that worked on ad campaigns were no longer as close to consumers as they were in the 1950s. Many of them did not have a deep personal understanding of those they were targeting. The industry was investing very little money in research and development. New learnings about human behaviour were emerging from fields such as Neuroscience and Behavioural Economics, but the industry largely ignored them.
But the biggest mistake the ad industry made was that it substituted the persuasion of people with creativity as the end point of all its efforts. Back when persuasion was the ultimate aim, the final objective of the ad agency and its clients was the same: increased sales of the client’s products. But once ‘celebrating creativity’ took over as the aim of ad agencies, winning awards at the famous advertising festivals became far more important than persuading consumers and helping their clients sell more products and services. A pricing model that went by 15%-of-media-billing as the agency commission made matters worse. This system meant that the more money a client spent on media space, the more the ad agency made for itself. In other words, the ad industry had no financial incentive to develop cost-effective solutions for its clients’ marketing problems.
When clients demanded measurable returns for the dollars spend on advertising, the industry struggled to come up with effective answers. With the arrival of digital advertising, where its effectiveness is easier to measure, the vulnerability of the ad industry got fully exposed. When online banner advertising started in 1994, the click-through rates (CTRs) were around 44%. But by 2022, CTRs had plummeted to 0.35%, a drop to less than one-hundredth the earlier effectiveness.
Where does the ad industry go from here? The disappearance of the ‘Thompson’ name should be a wake-up call for it. As long as there is a market economy, there will be competition between various products and services. As long as there is competition, businesses will seek to create persuasive stimuli. To create that stimuli, what was described in the T-plan is still relevant. Using the response you want from the consumer as an advertisement headline does not help elicit that response. As much as shouting “I am a humorous person" does not make the audience believe that you are a humorous person. Instead, cracking few jokes, developing the appropriate stimuli, is what will generate the desired response from the audience.
The name ‘Thompson’ has disappeared from the advertising industry. But knowing the difference between a stimulus and response and much else that JWT taught us about persuasion remain relevant.
"Exciting news! Mint is now on WhatsApp Channels
Thompson’s departure should wake up the ad industry
6
0
01.11.2023
Not many noticed the demise of this iconic name. For more than 145 years, it was an integral part of the advertising industry, one of the most influential and glamorous professions of all time. Two weeks ago, there was an announcement that advertising agencies Wunderman Thompson and VMLY&R will merge. The combined entity will be known as VML. For the first time since it began, the industry will have not have a ‘Thompson’ for businesses to engage for their advertising work.
In 1864, Carlton and Smith founded a firm to sell advertising space in religious journals. This firm was purchased by James Walter Thompson (JWT) and renamed accordingly in 1878. Since then, the name ‘Thompson’ has been on the doors of advertising agency offices throughout the world.
Many of the services of the ad agency as we know it today were pioneered by JWT. It opened a consumer research department in 1915, hiring professional academics such as John B. Watson, who was an early exponent of behavioural psychology. JWT was the first agency with a ‘consumer panel’ to do regular analysis of the buying habits of families. The Thompson-plan (or T-plan) was the industry’s first attempt to bring scientific rigour to the creative craft of making an advertisement. The T-plan explained in detail every step that strategic and creative teams must take to create persuasive........
© Livemint
visit website
login
who are we?
contact us
qosheapp
Toi Staff
Gideon Levy
Belen Fernandez
Andrew Mitrovica
Mort Laitner
Nikkei Editorial
Rami G Khouri
Ali Fathollah-Nejad
