Modern Advertising and the Market for Audience Attention

The US Advertising Industry's Turn-of-the-Twentieth-Century Transition

Zoe Sherman

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781315511559
• Edition: 1
• Topic: Business
• Subtopic: Advertising
• Index: Business

Modern advertising was created in the US between 1870 and 1920 when advertisers and the increasingly specialized advertising industry that served them crafted means of reliable access to and knowledge of audiences.

This highly original and accessible book re-centers the story of the invention of modern advertising on the question of how access to audiences was streamlined and standardized. Drawing from late-nineteenth and early-twentieth-century materials, especially from the advertising industry's professional journals and the business press, chapters on the development of print media, billboard, and direct mail advertising illustrate the struggles amongst advertisers, intermediaries, audience-sellers, and often-resistant audiences themselves. Over time, the maturing advertising industry transformed the haphazard business of getting advertisements before the eyes of the public into a market in which audience attention could be traded as a commodity.

This book applies economic theory with historical narrative to explain market participants' ongoing quests to expand the reach of the market and to increase the efficiency of attention harvesting operations. It will be of interest to scholars of contemporary American advertising, the history of advertising more generally, and also of economic history and theory.

1 Introduction

Audience attention as commodity, commodification as historical process

Audience attention as commodity

Our eyes and ears are coveted commodities. They are coveted by advertisers who seek to put their messages where we will see or hear them. They are commodities by virtue of the fact that advertisers pay to reach us.

The results of the workings of the access-to-attention market are familiar to us. Magazine and newspaper advertisements surround the articles we read (and maybe we read the advertisements, too). Billboards pass through our field of vision as we walk or drive or ride along the road (and sometimes we notice what they show and say). Advertisements are dropped on our doorsteps and in our mailboxes. Advertisements interrupt or are woven into radio and television programs. Advertising arrives in our email inboxes. Advertising permeates the web.

The access-to-attention market operates in the background for most of us; the advertisements become part of the fabric of daily life, a set of shared cultural referents. If we investigate how advertisements reach our awareness, what we find is that the advertisements reach us because our eyes and ears are on the auction block. But we are not the ones who put our own sensory organs up for sale. Instead, those with access to an audience – and some degree of exclusivity – sell space in that audience’s field of vision or range of hearing. Advertisers then gain access to their desired audiences by buying their way in. A billboard owner, for example, can assure advertisers that the billboard will be visible to anyone who passes by on the street and that the only way to make use of that visibility is to pay for the billboard display space. Passersby are not party to the exchange and, at the same time, passersby are the whole point of the exchange.

This analysis has become commonplace in media studies: what the media produce is an audience; the media’s customers are the advertisers. The content of the TV show is merely the bait; the sales transaction takes place between the media outlet and the advertiser, and the content of that transaction is … well … us. If it looks like you are getting something for free, you are probably the product. (Even if it has become commonplace in the academic literature and is growing in prevalence in journalism and popular discussion of some advertising platforms, especially social media, it can still be a jolt for an individual to come to that realization.)

It is a mistake, however, to project contemporary media studies’ persuasive conclusion that audiences are commodities backward to the nineteenth century. This book shows how audiences became commodities. How is it that access to our eyes and ears came to be the property of someone else? Furthermore, how did it come to be that those who hold property rights in our eyes and ears can sell them to yet another someone else?

Commodification as historical process

Anything that has the status of a commodity must have, at some time or another, gone through a process of commodification; that is, a process by which private property rights are asserted and a market exchange mechanism is constructed. The rights of private ownership may be a de facto social practice or they may be de jure rights recognized and enforced by governmental authority. The private property rights must be alienable: the initial owner may relinquish the right of ownership to another. And the property must be considered fungible: commensurable with and exchangeable for something else, namely money (Radin 1996).

The commodity status of things that have long been commodified and the structures and practices of market exchange come to seem natural and obvious to market participants. But the initial commodification of a good is generally a struggle. There is struggle over what should be privately owned and by whom. There is struggle over what should be alienable. There is struggle over what sorts of exchanges should be allowed. What is commensurable with what? Once the commodity status and market practices pass into the realm of normalized, unquestioned social practice, the story of market exchange can be told as a story of freely chosen (within the constraints of existing circumstance), mutually beneficial exchanges. But establishing private property rights and commensurability in the market always involves an exercise of power. The market for audience attention in commodity form emerged from a process of fierce struggle amongst advertisers, advertising agents, publishers, billposters, and often-resistant audiences themselves.

The first stumbling steps toward the construction of an organized market for the buying and selling of audiences in the United States came around 1870. In the late nineteenth and early twentieth centuries, advertisers and the advertising professionals¹ who served them successfully pushed the transformation of audience attention into a form of tradable property. At the beginning of this period, getting advertisements before the eyes of the public was a haphazard affair. By the end of the period, advertising in periodical media, outdoor advertising such as billboards, and direct mail marketing had all gone through a process of standardization, allowing advertisers to, with a reasonably high degree of specificity and confidence, purchase access to the attention of desired audiences.

The standardization emerged from the interaction of advertisers’ and advertising professionals’ desires. Advertisers wanted reliable access to audience attention for use in their own competitive strategies. While providing the reliable access to audiences that advertisers sought, advertising professionals wanted to capture a healthy share of those advertisers’ selling costs. The business practices that developed in the decades around the turn of the twentieth century assured advertisers of the size of their audience and assured those selling advertising space of revenue. The placement of advertisements in print media, on outdoor billboards, and in mailboxes (or on doorsteps) took on their modern, still-familiar form when the maturing advertising industry was able to sell standardized access to audience attention. By 1920 the basic structure of the market was pretty well set. Space-sellers collected or intercepted audiences. Advertising agents, generally identifying as advocates for the advertisers’ interests, mediated the purchase of those audiences. Advertisers filled those spaces with their sales pitches, confident that those pitches would be seen by the number and type of people they had bargained for. Newer media – radio, television, the internet – were later incorporated into the audience attention market. Each new medium reshaped the market, certainly, but did not generate a market de novo. The initial construction had already been done.

Audience attention as a fictitious commodity

Markets are always embedded in a society that also includes non-market realms; what happens within the market depends in part on what happens without (and vice versa). Karl Polanyi argued that ours is a market society in which the market realm has a tendency to expand into more and more areas of social life, but this process of market expansion runs into contradictions. The self-regulating market ideal requires that every element of industry must be treated as a commodity, “subject to the supply-and-demand mechanism interacting with price.” However, industry’s needs include land and labor, which are “no other than the human beings themselves of which every society consists and the natural surroundings in which it exists.” That is, they are not produced for the purpose of market exchange, and yet they become subject to market exchange. Polanyi calls such items, those that are traded on markets although they are not produced specifically for sale on the market, “fictitious commodities.” He identified three: land, labor, and money. The self-regulating market ideal can never be fully achieved both because the market would fail – these fictitious commodities will not respond appropriately to market signals – and because allowing “the market mechanism to be sole director of the fate of human beings and their natural environment … would result in the demolition of society” (Polanyi 1957 [1944], pp. 71–73).

Audience attention is not produced for the purpose of market exchange; like labor, it is inherent in the existence of a human population. Although, unlike labor, which is sold by those laboring, attention was not (and is not) sold by those attending; it was (and is) sold by third parties. By the late nineteenth century, access to audience attention became important to the functioning of industry and it remains so today. This need of industry created a pressure for audience attention to take on a commodity form and the advertising industry was born in response. A new market in audience attention arose, interconnected with all other markets in the larger market economy. In short, audience attention became a fictitious commodity.

Sectors of the audience attention market

The emerging market for audience attention had several sectors. Before 1920, there were three main avenues for the interception of audiences’ field of vision outside of places that were already considered places of commerce. One was to gather audience attention in the virtual spaces of the mass media. The second was to gather audience attention in public spaces. The third was direct mail marketing and door-to-door distribution seeking to intercept people’s attention in the private space of their homes.²

Mass media

In the late nineteenth and early twentieth centuries, mass media meant print (Laird 1998, p. 58). There were local daily and weekly newspapers, many with a small local readership numbering only in the hundreds, and there were monthly national magazines with readership in the thousands or tens of thousands or even, for a very few stand-out successes, by around 1900, hundreds of thousands to a million. In the late nineteenth century, however, information about publications and their readership was incomplete and inaccurate. Advertisers could and did pay publishers for advertising placements and the advertisers’ payments could pretty reliably secure the application of ink to paper. But the ultimate purpose of the ad placement – intercepting the gaze of a reader – remained a vague and entirely unverifiable promise. Advertisers put little faith in the circulation claims of publishers (Rowell 1906; Fowler 1900 [1897]; Myers 1960).

The production of all forms of print media grew remarkably quickly in the decades after the Civil War. As the volume of print media grew, advertising agents took on a larger role in circulating information about available advertising space and in negotiating ad placements. Through their intermediation, the market for media ad placements integrated regionally and nationally. From the perspective of producers and retailers with national ambitions, this service from advertising agents meant that newspapers in New Haven, New York, Newport News, and New Orleans were now part of a single, readily accessible market for audience attention. Also, as the market grew and integrated, the nature of the exchange between publisher and advertiser – the relationship between size, page placement, and circulation, to rates – became increasingly standardized. There is a rich literature on print media advertising in the economic and cultural setting of the late nineteenth and early twentieth centuries. The core of this literature is a flurry of scholarship published in the fifteen years from Daniel Pope’s The Making of Modern Advertising in 1983 to Pamela Walker Laird’s Advertising Progress in 1998. Chapter 2 relies on the work of Pope, Laird, and others to retell the story of the development of print media advertising, re-centering the analysis on the question of quantifying audiences to develop print as a sector of the audience attention market.

Outdoor advertising

While greater volumes of print media were engaging the eyes of a larger and larger readership, city streets and major regional transportation routes were gathering together denser and denser spatial concentrations of people. The throngs of people funneled into major thoroughfares were of great interest to many advertisers. As with print media, however, advertisers in 1870 had only spotty access to these throngs. They could and did pay printers for posters, and those purchase orders were generally fulfilled. Advertisers could then pay billposters to paste the posters around the city, but that was a much iffier proposition. Billposters in the postbellum period were as little trusted as publishers, for good reason. They were sometimes caught burning or otherwise disposing of the posters they were paid to hang. Even if the billposter did earnestly paste every one of the posters in his charge, there was no inventory of display locations, nor was there protection or inspection of display spaces. The next billposter to walk by could paste over one advertiser’s poster with a new poster before anyone read the first. The owner of the property to which the poster was affixed – or anyone else, for that matter – could tear it down (Associated Billposters Association of the United States and Canada December 1897, pp. 20–21).

Then some enterprising and innovative billposters introduced a new practice: billboards. Rather than pasting a poster to any surface they happened upon, they leased space, constructed specialized display surfaces, and pasted posters there. This new practice allowed advertisers to contract for particular display locations and verify that their posters were in fact hung as promised. Billboards rapidly proliferated and by 1900 billposters in every major city in the US could offer advertisers standardized billboard displays. With display now guaranteed, display pricing was negotiated on the basis of size, placement, and number of passersby. Rather than paying billposters for the service of affixing poster to wall, advertisers were now paying billposters for access to an audience’s eyes. Billposting has not received nearly the volume of focused scholarly attention devoted to print media (or other elements of consumer culture such as retailing). Chapter 3 draws heavily on the Outdoor Advertising Association of America archives, held at Duke University’s John W. Hartman Center for Sales, Advertising, and Marketing History, to tell the story of standardizing the field of outdoor advertising.

Direct mail

Advertising professionals of the late nineteenth century found another important venue in which they could intercept an audience’s attention and offer it to advertisers: private homes. Advertisers made use of three main ways to enter people’s homes. One was to distribute trade cards and other bits of advertising ephemera (calendars, rulers, paper fans, tins…) and hope that the targeted audience themselves would bring those items home. Late nineteenth century and early twentieth century scrapbooks show that this often worked (Laird 1998, pp. 219, 265; Banta 2013).

But advertisers did not necessarily want to wait for audiences to self-select into perusal of their promotions, nor did advertising professionals want to pass up an opportunity to mediate advertisers’ contact with audiences. The result of both parties’ discontent was two practices that delivered advertising to audiences’ doors. One was door-to-door delivery: distributors (this was their standard job title) would take sacks of advertisers’ materials and walk the streets, handing items to people they found at home, or tossing them through a window, or sliding them under a door, or leaving them on a porch. The advantages offered by distributors were that advertisers did not need a mailing list and could send out a wide variety of advertising materials such as product samples and items of nonstandard shapes and sizes that the Post Office would not handle, at least not at affordable postage rates (Associated Billposters and Distributors of the United States and Canada 1905–1908). However, distribution suffered from the same principal-agent problem as early billposting: there was no way to know whether or not distributors had fulfilled their side of the bargain.

Another option was direct mail marketing sent through the United States Post Office, which first began home delivery in select urban areas in the 1860s and began delivering mail to all households, even in rural areas, by 1902 (Gallagher 2016, p. 190; Henkin 2006, pp. 86–90). Direct mail limited the types of material that could be delivered (only paper of fairly standard sizes and weights) and required that advertisers already know the names and addresses of those they wanted to reach. But in compensation, advertisers had a high degree of confidence that the items were delivered and the individual addressing allowed them to track contacts with individual targets and run detailed studies of responses. Modern commercial data mining can trace its roots to the businesses that compiled and sold mailing lists beginning as early as the 1880s and entered a period of rapid growth after 1900. (Data mining can also be traced to the consumer credit reporting that arose around the same time (Lauer 2017).) Like billposting, direct mail has attracted less scholarly attention than print. Relying largely on primary source material, much of which I accessed at Harvard Business School’s Baker Library, Chapter 4 tells the direct mail story.

The dramatis personae

Pamela Walker Laird suggests that we think of the process of advertising in five steps: decide to advertise, conceive the message, produce the material that encodes the message, distribute the material, and pay for it. Advertisers themselves must do the first and last, but the middle steps “devolved to specialists at different rates over the years” (Laird 1998, p. 39). Laird’s central purpose in her book Advertising Progress was to explore the emergence of the second and third steps, conceiving of the message and producing the material that encodes it, as specialized professional tasks. The purpose of this study is to explore the transformation of the fourth step as distribution of advertising came to be accomplished through the purchase of access to audiences. To understand the conversion of audience attention into a purchasable commodity, we need as context some understanding of the advertisers’ decision to advertise.

Who were the advertisers? Why did their sales practices change?

The scale and style of advertising developed in the closing decades of the nineteenth century differed in kind from earlier advertising. The most familiar and non-suspect form of advertising prior to the Civil War came from merchants alerting the local public to recent shipments. Few items, especially items transported from afar, were consistently stocked. The implicit assumption behind such early advertisements was that buyers generally knew what they wanted to buy (a bolt of cloth, a ...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• Preface
• Acknowledgments
• 1 Introduction: Audience attention as commodity, commodification as historical process
• 2 Packaging readers: Newspaper and magazine advertising
• 3 Pricing the eyes of passersby: Outdoor advertising
• 4 Home invasion: Advertising delivered door to door
• 5 Conclusion: Multimedia demands on the resource of attention
• Index