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Putting Foreign Consumers on the Map: J. Walter Thompson's Struggle with General Motors' International Advertising Account in the 1920s

Published online by Cambridge University Press:  13 December 2011

Jeff Merron
Jeff Merron
Affiliation:
JEFF MERRON is an assistant professor of communications at theState University of West Georgiaand the executive editor of SportsJones.com, the daily online sports magazine.
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Abstract

In the late 1920s and early 1930s the J. Walter Thompson advertising agency, fueled largely by a deal with General Motors' international operations, opened thirty-four branch offices in Europe, the Middle East, South Africa, India, Australia, and South America. The overseas branches allowed the agency to sharpen its methods of quantitative research. They also enabled J. Walter Thompson to establish lasting understandings of European markets that proved beneficial for its long-term health.

Type
Articles
Information
Business History Review , Volume 73 , Issue 3 , Autumn 1999 , pp. 465 - 502
Copyright
Copyright © The President and Fellows of Harvard College 1999

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References

1 The JWT archives are held at Duke University's Perkins Library in the John W. Hartman Center for Sales, Advertising, and Marketing History. Many of JWT's international research reports are preserved on microfilm in the archives, as are some of the ads that were apparendy placed in international media. This quote is from a 1929 memo in James Walter Young International Branch Notebooks, Folder 3, JWT archives.

The prosperity of JWT in the 1920s is reflected in the ample documentation available in the archives. In the 1920s and early 1930s JWT produced two slick publications—the internally circulated News Letter and the more widely circulated News Bulletin—that clearly outlined the views and approaches of JWT men to advertising. Both of these publications highlighted the international expansion, and occasionally entire issues were devoted solely to news from the foreign offices. The bimonthly News Letter was “intimate and confidential,” often publishing, in full, letters between foreign office managers and New York executives. News Letter had a rotating editorship most of the time, and actively sought news from JWT staffers based both in New York and branch offices. It served as a major source in piecing together how the office managers organized their international offices, and the trials and tribulations they experienced while conducting business in foreign lands. The company during this time also hired a stenographer to take verbatim notes of weekly representatives' meetings, and these survive, completely intact, in the JWT archives.

The author has been unable to locate any General Motors archival material that relates to its use of advertising during the period this study discusses, and secondary sources, while noting the great increase in both domestic automobile sales and advertising during the 1920s, say nothing of the international advertising of automobiles.

2 “The JWT Company: An Advertising History,” ch. 4, author unknown, JWT archives.

3 See Fox, Stephen, The Mirror Makers: A History of American Advertising and its Creators (New York, 1984), 90.Google Scholar

Some other advertising agencies also experienced rapid growth in the 1920s. See, for example, Ralph M. Hower's account of the A.W. Ayer agency, a major JWT competitor, that also began tentative international operations during the 1920s, The History of an Advertising Agency (Cambridge, Mass., 1949).

4 Overproduction was a much-discussed problem in the 1920s, and both advertising and overseas expansion were seen as potential solutions to the problem. Writes Sklar, Martin J. in The United States as a Developing Country: Studies in U.S. History in the Progressive Era and the 1920s (Cambridge, U.K., 1992)CrossRefGoogle Scholar, “Insatiable as the appetite for goods and services may have become, however, effective consumer purchasing power proved persistently insufficient to satisfy it, and at any rate, production capacity continuously outran effective market demand… Imperialist expansion emerged as one response to this situation. In the 1920s, modern advertising and consumer financing through installment debt, took their place along with imperialism as another response.” (p. 166)

5 From “The Many Worlds of Sam Meek: A Legacy of Leadership,” a company booklet distributed after Sam Meek's death (date unknown).

6 Ibid.

7 Ibid.

8 Milton Moskowitz, “JWT Aim Abroad: Push Gospel of Advertising,” Advertising Age, reprint from 2 Mar., 9 Mar., and 16 Mar. 1959 issues.

9 From “The J. Walter Thompson Company: An Advertising History,” authored “by past and present members of the Company,” located in the JWT archives. Date of publication unknown. The report adds: “In the long run, Unilever business was as important, or even more so, than the massive G.M. assignment because Unilever was one of the World's [sic] largest international advertisers.” See also, “The Many Worlds of Sam Meek.”

10 “The J. Walter Thompson Company.”

11 Quoted in “How Advertising and Advertising Agencies Started and Grew in the U.S.: A Brief History,” Advertising Age, 7 Dec. 1964, 5.

12 Memo from Lubertus Smilde dated 10 Dec. 1963, “Re: The Hague office,” Sid Bernstein collection, JWT archives.

13 “The Many Worlds of Sam Meek.” No other documentation exists in the archives to explain GM's decision to use JWT or whether more systematic efforts were made to acquire the account.

14 “The J.Walter Thompson Company,” ch. 4.

15 JWT News Letter (Apr. 1930): 3. Offices were located in Stockholm, Copenhagen, Berlin, Warsaw, Vienna, Milan, Bucharest, Belgrade, Constantinople, Tehran, Alexandria, Sofia, Zagreb, Lisbon, Madrid, Barcelona, Paris, Antwerp, London, Johannesburg, Port Elizabeth, Cape Town, Bombay, Batavia, Sydney, Buenos Aires, Montevideo, São Paulo, and Montreal.

16 “The Many Worlds of Sam Meek,” 7.

17 Ibid., 7–8.

18 RG3, Sidney Bernstein Papers, Box 5, Folder 5. History of London office, JWT archives (date unknown); see also “The J. Walter Thompson Company.”

19 Moskowitz, “JWT Aim Abroad,” Advertising Age, 7 Dec. 1964. While JWT's U.S. billings would fall from $32.1 million in 1929 to $24.7 million in 1933, its international billings would increase from $5.4 million in 1929 to $7.7 million in 1933.

20 Ibid.

21 “The JWT Company,” ch. 4.

22 “The Many Worlds of Sam Meek,” 8.

23 General Motors Corporation, “The Export Organizations of General Motors,” pamphlet, 1927, no page number.

24 Ibid.Donner, Frederic G., in The World-Wide Industrial Enterprise: Its Challenge and Promise (New York, 1967)Google Scholar, explained that “By 1929, over 70 per cent of the General Motors cars and trucks exported from North America were shipped as parts and components for assembly overseas” (15). GM's increasing dependence on overseas manufacturing plants (Opel and Vaux-hall) in the early 1930s and could almost directly be attributed to the Depression. “Employment and personal incomes fell rapidly and, as the depression spread, more severe international trade and foreign exchange restrictions were imposed” (22). Exports dropped as a result, and during the subsequent recovery, demand for autos overseas increased rapidly, topping 1929 demand by 50 percent by the mid-1930s. Trade restrictions and taxes reinforced during the depression remained in place, however, necessitating a dependence on the foreign-built lines (22–23). For more on this see Rae, John B., The American Automobile Industry (Boston, 1984), 165.Google Scholar

25 In 1925 GM acquired Vauxhall, and in 1929 the company further strengthened its overseas operations by purchasing Adam Opel, A.G., a large German manufacturer. By this time GM had nineteen manufacturing and assembly plants staffed by about 18,000 employees. Overseas sales of GM cars and trucks leapt from 118, 791 in 1926 to 282, 157 in 1928, and GM had become the largest auto manufacturer in Europe. But in 1929 sales began to decline, and the number of cars and tracks sold by the export divisions fell swiftly and steadily to 77, 159 by 1932. Autos fully manufactured in Germany and Great Britain accounted for nearly half of GM's overseas sales in 1932. From Pound, Arthur, The Turning Wheel: The Story of General Motors Through Twenty-Five Years (Garden City, N.Y., 1934), 247–248.Google Scholar

26 William Monaghan, “The Export Genius Behind General Motors,” Forbes, 15 Aug. 1928, 19; B. C. Forbes, “How Our Biggest Export Job is Handled,” Forbes, 15 May 1929, 13.

27 Mooney, James D., “Making the World Move Faster,” Nation's Business (Dec. 1928): 21.Google Scholar

28 Also like his counterparts in JWT, Mooney delighted in telling humorous stories about the difficulties of doing business abroad—and the punchline usually highlighted the backwardness or primitive nature of the people or country involved. One story involved a salesman, trying to woo a potential customer on a golf course in Uganda, who found that roaming hippopotami presented greater obstacles than sand traps. Another anecdote starred a salesman in India who sent two Sikhs equipped with tom-toms to a local town in order to attract a crowd for a talk on the virtues of the automobile. Sales resistance, considered in the U.S. to almost always relate to pricing, was also unpredictable abroad. Wrote Mooney, “In Spain, when owners of horse-drawn trucks are urged to buy motor trucks they have often replied they would not be able to enjoy a siesta if they were driving a motor vehicle. Upon the seat of their carts they can relax after a good lunch and a bottle of wine and take a comfortable snooze, knowing that the horses will plod along quite safely.” Ibid., 22, 100–101.

29 “J. Walter Thompson Company,” Fortune (Nov. 1947): reprint in JWT archives, page unnumbered.

30 Ibid.

31 This summary is from West, Douglas C., “From T-Square to T-Plan: The London Office of the J. Walter Thompson Advertising Agency, 1919–1970,” Business History 39:2 (1987): 204.Google Scholar

32 “The J. Walter Thompson Company.”

33 Kreshel, Peggy J., “John B. Watson at J. Walter Thompson: The Legitimation of ‘Science’ in Advertising,” Journal of Advertising 19:2 (1990): 51.CrossRefGoogle Scholar

34 Kreshel, Peggy Jean, “Toward A Cultural History of Advertising Research: A Case Study of J.Walter Thompson, 1908–1925,” (Ph.D. diss., University of Illinois at Urbana-Champaign, 1989), 54–57Google Scholar, argues convincingly that Watsonapos;s contributions to JWT's advertising were more apparent than real. Fox, 86, concurs, writing that “Watson had no significant original, shaping impact on the actual product of the agency.”

35 Buckley, Kerry W., Mechanical Man: John Broadus Watson and the Beginnings of Behaviorism, (New York, 1989), 212Google Scholar; Kreshel, 51. Watson said this in a 26 Sept. 1935 speech before the Montreal Advertising Club.

36 A debate had been going on in the advertising trade press since the turn of the century over rational or “reasons why” approaches versus the use of emotional appeals. A simultaneous debate recognized the importance of nationality, race, and class differences, with sides differing on whether appeals should be tailored to different groups. For more on these debates, see Curtie, Merle, “The Changing Concept of ‘Human Nature’ in the Literature of American Advertising,” Business History Review 41:4 (1967): 335–357CrossRefGoogle Scholar; Marchand, Roland, Advertising the American Dream: Making Way for Modernity, 1920–1940 (Berkeley, Calif., 1985)Google Scholar, and Kreshel, Peggy Jean, “John B. Watson at J. Walter Thompson: The Legitimation of ‘Science’ in Advertising,” Journal of Advertising 19:2 (1990).CrossRefGoogle Scholar

37 Curtie, “The Changing Concept of ‘Human Nature’ in the Literature of American Advertising,” 341.

38 Ibid., 343–345.

39 Buckley, Kerry W., “The Selling of a Psychologist: John Broadus Watson and the Application of Behavioral Techniques to Advertising,” Journal of the History of the Behavioral Sciences 18 (1982): 215.3.0.CO;2-8>CrossRefGoogle ScholarPubMed

40 Ibid. It is frequently mentioned in JWT memos, letters, and discussions of the GM account that price was always an obstacle in convincing the consumer to buy a car. This was clear both as a matter of common sense and of experience. The JWT approach seemed, in the late 1920s, to avoid confronting price directly, but rather to talk about GM cars in terms of their value. GM cars faced competition overseas not only from their automotive industry competitors, but also from other expensive consumer durables like refrigerators and electric stoves. Therefore, individual ads and campaigns might attempt to persuade buyers to select GM over other makes of cars, but the whole effect of auto advertising would have to entice consumers to want an automobile in the first place.

41 Katz, Harold, The Decline of Competition in the Automobile Industry, 1920–1940 (New York, 1977), 143–44.Google Scholar

42 Ibid., 148.

43 Ibid., 149.

44 Flink, James J., The Automobile Age (Cambridge, Mass., 1988), 234.Google Scholar

45 JWT News Letter 166, 6 Jan. 1927, 313–314; “A Dispatch from Overseas,” JWT News Letter 174, 3 Mar. 1927, 248–249. The European office managers were, as a group, prolific writers, contributing a great deal of material to JWT's News Letter and News Bulletin, dispatches written with great care and also great humor.

46 George Butler, “Bush House, Berlin and Berkeley Square: George Butler remembers JWT 1925–1962,” unpublished manuscript, JWT archives, 3.

47 RG3, Sidney Bernstein Papers, Box 5, Folder 5, history of London office, JWT archives.

48 Ibid.

49 Frequent dispatches from the office managers were a staple of the JWT News Letter, and most of the office managers wrote about their lack of knowledge about local business conditions, problems with language and translations, frustrations with loose and often corrupt local business practices, production problems, hiring decent staff, etc. See, for example, JWT News Letter 166, 6 Jan. 1927, 313–314; “A Dispatch from Overseas,” JWT News Letter 174, 3 Mar. 1927, 248–249; George Butler, “Bush House, Berlin and Berkeley Square: George Butler remembers JWT,” unpublished manuscript, JWT archives; “Early History of J.W.T. in Australia,” (as recalled by E. L. Jarvis, Nov. 1963), Sidney Bernstein Papers, JWT archives; and “The Establishment of J. Walter Thompson's Offices in Australia and New Zealand,” notes by William A. McNair, Managing Director of The McNair Survey Pty. Ltd., 21 Nov. 1963, in the Sidney Bernstein Papers.

50 Arthur E. Hartzell, “Hunting the Elusive Spanish Media,” JWT News Letter, 1 Feb. 1928, 54.

51 Ibid., 54–55.

52 “From the Frontiers of Our Far Flung Empire,” JWT News Letter, 9 June 1927, 293. Excerpts of a letter from Henry Miner to Rae Smith.

53 Adrian Head, “All Figures Lie in Sweden,” JWT Co. News Letter, 1 Jan. 1928, 10.

54 Meek, Samuel, “A Few Facts About Our Work Abroad,” News Bulletin, Nov. 1928, 18.Google Scholar

55 These research stories come from the Sid Bernstein Papers, RG3, Box 5, Folder 5, history of the London office, JWT archives. The Investigation Department in London was critical to JWT's expansion abroad. Organized and staffed almost entirely by women, it operated out of a wooden army hut located next to Bush House.

56 Hinks, William, “Copenhagen's Official Inspector,” JWT Co. News Letter, 15 Jan. 1929, 6.Google Scholar

57 Butler, 5. Butler doesn't say what caused this violent outburst. JWT was relatively progressive in hiring women for important positions in the agency. Though the trade was overwhelmingly dominated by men during the era, Helen Resor, Stanley's wife, was considered to be one of the best copywriters of her time, and she was considered quite influential in the agency. Many international offices hired women who were probably more influential than their support positions indicated, and one of Berlin's two native copywriters was a woman. However, while JWT was, in the company's own words, “the first agency where women could find major opportunities as advertising creative stars,” none of the international office managers were women, and all of the top executive posts in New York were held by men. (Quote is from “The J. Walter Thompson Company,” ch. 3) Records of the weekly Representatives' meetings from the late 1920s show that the only women present were secretaries.

58 Crane, Ned, “Berlin Wants to Know ‘J. Walter’ In Person,” JWT Co. News Letter, 15 Nov. 1927, 482.Google Scholar Excerpted from a letter from Ned Crane to Bill Day.

59 Knott is quoted in West, 204.

60 “General Motors Report of Investigations,” Uruguay. Microfilm reel 232, JWT archives.

61 Ibid.

62 Some report titles include, “General Motors Report of Investigations” (Uruguay), Microfilm reel 232, JWT archives; “Motor Car Study, Dealers, Switzerland,” Aug. 1927, JWT Archives, microfilm reel 232; “General Motors Australia Buick Investigation,” JWT archives, microfilm reel 223, etc.

63 See microfilm reels 222 (Argentina), 225 (Holland, Norway, Poland, Spain), and 232 (Switzerland, Uruguay), JWT archives.

64 Marchand, 75. But they did give advertisers great insight into mass markets. For example, one JWT research report, based on interviews with dealers and consumers, concluded that European cars—the Citroën and the Fiat—were competitive with the Chevrolet, but no European cars were competitive with the bigger, more expensive models—the Buick, the Oakland, and the Pontiac. One of the main features for consumers in buying the European models was, quite simply, the low taxes they had to pay on those cars. The forty-four dealers interviewed sold over forty different car makes, including Chevrolet, Oakland, Pontiac, Citroën, Fiat, Buick, Stude-baker, Cadillac, and Lancia. “Motor Car Study, Dealers, Switzerland,” prepared by Research Department of JWT Co., London, Aug. 1927. Microfilm reel 232, JWT archives.

65 “Survey and Analysis of the Argentine Market Produced by The J. Walter Thompson Company for General Motors Argentina,” 1929, Microfilm reel 222, JWT archives (pages not numbered).

66 The method was outlined on page 1 of die Argentina report: “Setting ourselves to this task we evolved and put into execution the following methods of inquiry which would give us a cross-section both of the buying groups and of the country: personal interviews in the upper strata of Buenos Aires society; personal interviews with Argentine people of all classes in their homes; personal interviews with Argentine business men; personal interviews with Argentine employees of American firms; a questionnaire distributed in ‘Pique’ a questionnaire printed in ‘Pampa Argentina’; a questionnaire printed in ‘El Mundo’; personal interviews with dealers in 10 different cities; a mail questionnaire answered by all of your important dealers. These dealer returns, by the way, covered 75% of all provinces and territories. The investigation returned 2615 filled in questionnaires.”

67 This was the 5th edition of Population and Its Distribution.

68 From RG3 the Sidney Bernstein Papers, Box 3, Folder 8, JWT archives. Biographical notes on Paul T. Cherington. Cherington left JWT in 1931 to form Cherington, Roper & Wood, a marketing survey and distribution consulting company.

69 “Research Departments Explore World Markets” JWT Co. News Letter (Mar. 1931): 5.

70 Ibid.

71 In an article that typified mainstream thinking among international advertisers at the end of the 1920s, A. L. Reinitz argued that the same type of market research done in the United States had to be replicated abroad, and that natives must be used to conduct interviews, because otherwise respondents “will usually give either misleading answers to a foreigner (the American investigator) or will refuse to give any answer at all.” Reinitz, A. L., “Research—the Approach to Export Advertising,” Advertising Abroad (Nov. 1929): 29.Google Scholar

72 “Survey and Analysis of the Argentine Market;” “Motor Car Study Owners Holland,” prepared by the Research Department of JWT Co., London, Aug. 1927, JWT archives, microfilm reel 225.

73 At the Wednesday, 8 Aug. 1928 representatives' meeting, Sam Meek reported, “On General Motors we used 446 publications, about 90% being newspapers. I think between 80 and 90% of the total business is in newspapers.” JWT archives, 5.

74 “Survey and Analysis of the Argentine Market.”

75 This memo can be found in the James Webb Young International Branch Notebooks, which were compiled to assist the new Buenos Aires office manager in opening his office. The Young notebooks include correspondence with Stanley Resor, Sam Meek, Henry C. Flower, and Clement H. Watson between 1928 and 1931. Most of this material concerns GM's European accounts. Notes in the Finding Aid Notebook, JWT archives.

76 “Survey and Analysis of the Argentine Market.”

77 The report concluded that lower-income women had not yet cultivated the habit of reading magazines.

78 “Survey and Analysis of the Argentine Market.”

79 Ibid.

80 Microfilm reel 34, JWT archives. Translated by Robert L. Stevenson.

81 Kreshel, “Toward A Cultural History of Advertising Research.”

82 Marchand, 165. Marchand is careful to point out that the social tableaux depicted in ads were not intended to be reflective of society:

The content of a social tableau advertisement was determined primarily by merchandising strategy. Its purpose was to sell a product. Within the boundaries set by that strategy, its content was further shaped by pictorial conventions and by the desire to provide consumers with a scene into which they could comfortably and pleasurably place themselves. Given the assumption of advertisers, constantly reinforced by their observations of popular culture, that people preferred to identify with portrayals of themselves as they aspired to be, rather than as they “really were,” we must assume that most social tableaux aimed at depicting settings at least “a step up” from the social circumstances of the readers (166).

83 Dyer, Gillian, Advertising as Communication (London and New York, 1982), 97–102.CrossRefGoogle Scholar

84 “Survey and Analysis of the Argentine Market.” These results confirmed the findings in earlier reports that women had a significant impact on car purchases, and that this influence was growing. For example, in Holland in 1927, about one-third of dealers “said that women's influence on the purchase was becoming increasingly important,” and a significant percentage also said that women sometimes had more influence then men. However, about one-third of the dealers also said that women had little or no influence of the selection of automobiles. From “Motor Car Study Dealers Holland,” JWT Research Dept, London, Aug. 1927, microfilm reel 225. See also “Motor Car Study, Dealers, Switzerland,” prepared by Research Department of JWT Co., London, Aug. 1927, microfilm reel 232, JWT archives.

In general, most advertising men assumed during the 1920s that they were addressing primarily women through their ads—but many ads were for low-price household items, food, cleaning products, etc. That women would have to be taken into consideration for such a large-scale purchase—especially considering that men were the primary drivers of automobiles—is a primary example of how this type of survey research could, in fact, be helpful.

85 The American Magazine (Oct. 1929): 128.

86 Or, more accurately, JWT's GM ads.

87 Marchand, 180–189.

88 Ibid.

89 “Henry C. Flower,” biographical notes, Sid Bernstein Papers, JWT archives.

90 Ibid.

91 “J. Walter Thompson Company,” 95.

92 In 1929, JWT's U.S. billings totalled $32.1 million; international billings were $5.4 million. In 1933, JWT's U.S. billings totalled $24.7 million; international billings were $7.7 million. From Kreshel, “Toward A Cultural History of Advertising Research,” 411.

93 Ibid.