Y&R Young & Rubicam

Y&R / Young & Rubicam Group : advertising & marketing profile (continued)

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See full profile for current activities: Although Young & Rubicam has retained to this day the names of both the men who founded it, the agency was in reality very much the creation of Raymond Rubicam, widely regarded as one of the most influential figures in modern advertising. Ray Rubicam was born in Philadelphia in 1892 into a moderately prosperous family. Rubicam's grandfather had founded a successful import-export business, but when he died without leaving a will, ownership of the company was seized by his wife's family, who severed relations with the young Ray and his parents. Rubicam's father became a journalist for Godey's magazine, but died when Ray was just five. As the youngest child of several, Ray was sent by his mother to live with various different relatives over the next ten years, moving around between Ohio, Texas and Denver. As a result the boy grew up as something of a rebel, always in trouble at school. Eventually Ray Rubicam quit school at 16 to work as a grocery clerk, then effectively spent two years on the road, sampling an everyman American life and holding down a variety of menial part-time jobs, often riding freight cars alongside bums and hoboes.

Eventually, he settled back in Philadelphia, but still had no clear idea of what he wanted to do. He worked briefly as a news reporter on a local newspaper, later as a car salesman. However, advertising was beginning to play an increasingly significant part in American culture, and Rubicam became interested in this apparently high-paying skill which might combine his two talents of writing and selling. He applied for a job with a large local agency, named F Wallis Armstrong after its owner, whose clients included Campbell's Soup and RCA Victor. Armstrong was reputedly a tyrannical and unpleasant man who treated his employees like dirt but ingratiated himself mercilessly with clients, while at the same time milking his sales contracts for every extra penny he could. According to one of his clients, quoted in Advertising Age in 1966, he was "hated by all who worked for him, and thoroughly despised by every space rep who ever had the misfortune to be obliged to call on him".

Rubicam sent Armstrong a few sample ads and attempted to get an interview. Eventually, he camped out for hours in the agency's reception area in the hope of buttonholing the man, but was repeatedly brushed off. "I sat in that lobby on a bench so hard that I can still feel it," he later recalled. "On three different days the boss passed me by, amazed me by calling me by name, but said he couldn't see me that day. By the ninth day going to that office had become a sort of hypnosis. But while I was full of hope each morning, I had been getting madder towards the end of each day. At the end of the ninth day, I exploded." He wrote an enraged letter of complaint to Armstrong, railing against this cruel and inhuman treatment, and delivered it by hand. But he was still back again the day after. This time, to him amazement, Armstrong agreed to see him. "Those ads of yours didn't amount to much," said the tyrant, "but this letter has real stuff."

Rubicam spent three painful but educational years at Armstrong before quitting to take a job at NW Ayer, then Philadelphia's biggest agency. His most significant account was Steinway Pianos, a prestigious client but not by any means a prolific advertiser. While looking through old cuttings on the company, Rubicam noticed that the brand had been favoured by a succession of important composers and pianists. While musing over this fact, he found himself jotting down on his pad the phrase "The Instrument of the Immortals". Steinway initially balked at the idea of using an advertising slogan, but were persuaded to try running Rubicam's ad just once, and were astonished to see a significant response in sales. As a result, they continued to use the slogan for years.

Rubicam's next big success was for ER Squibb. Again, the winning headline came to him after several hours of doodling on his pad when he ended up with line "The Priceless Ingredient of every product is the honor and integrity of its maker". As with Steinway's descriptor, this became Squibb's house slogan. Twenty years later it was selected by readers of the trade magazine Printers Ink as one of the three greatest ads of all time.

Perhaps the most significant aspect of Rubicam's period at Ayer was the friendship he struck up with a genial and outgoing account executive at the agency by the name of John Orr Young. Iowa-born Young had already spent several years in the business, originally serving as a copywriter under Claude Hopkins at AD Lasker's Lord & Thomas. However it was not long before the unruly Young was dismissed from Lord & Thomas for circulating a satirical version of the company's letterhead to his friends in which the company's name was represented as "Loud & Promise Badvertising", run by "principals AD Rascal and Fraud Hopkins". Young held down a succession of other jobs at agencies in New York and Chicago before ending up at NW Ayer.

Eventually, in Spring 1923, Rubicam and Young began plotting the next steps in their respective careers and decided to team up and form their own agency. In search of clients, Young took a trip to New York to call on some old contacts, and ended up at Post Cereals, later part of Kraft. He managed to persuade the client to take a chance with the new agency by assigning it one of its smaller accounts, for the beverage Postum, a sort of hot cereal drink designed for people who liked coffee but not its caffeine content. Rubicam's debut campaigns "Why Men Crack" and "When the Iron Man Begins to Rust" were extremely successful. The happy client promised more accounts as a reward, but only if Young and Rubicam agreed to move from Philadelphia to New York. This they did in 1926, renting a room on the 6th floor of a building at 285 Madison Avenue, the same building which 85 years later still houses the group's corporate HQ. (It plans to vacate those premises finally in 2013).

It was the first agency to be founded by a copywriter, and the result was typically unconventional compared to other more sober competitors. Young and Rubicam proceeded to lure a group of talented, often rather eccentric, individuals from other agencies. Among the most unusual was Ted Patrick, later the star editor of Holiday magazine. According to Draper Daniels, who described his time at Y&R in the book Giant, Pigmies & Other Advertising People, Patrick always came to work late, "looking like a pool-hall hustler or a retired jockey fresh out of a Damon Runyon story", took long lunches and left early. But he was widely admired as one of the finest copywriters on Madison Avenue. There was comparatively little job demarcation within the main office, and client briefs would often be discussed with anyone who cared to have a point of view. Often all the team members would join up over coffee and sandwiches and work late into the night to sweat out a particular brief, in what were called "gang-ups". However, ironically, even if they kept unconventional hours, Young & Rubicam's gang of oddballs and miscreants never missed a deadline, and kept a growing group of clients happy. "Young & Rubicam was heaven," rhapsodised Draper Daniels, "or next door to it, and God's name was Raymond Rubicam. We were Y&R and that meant the best there was. It was more of a religion than it was an advertising agency."

Unlike rival agencies which tended to become known for a particular style of advertising, Y&R prided itself on its versatility. "The value of an idea," said Rubicam, in an introduction to Creative Advertising, a textbook written many years later by his copy chief Charles L Whittier, "is in inverse ration to the number of times it has been used. Our job is to resist the usual." That approach was perhaps expressed most succinctly in the house ads produced by Young & Rubicam to advertise its own services in Time Inc's newly launched business magazine Fortune. Under the headline "IMPACT" and a picture of a man's face on the receiving end of a punch, Rubicam's copy read "According to Webster: The single instantaneous striking of a body in motion against another body. According to Young & Rubicam: That quality in an advertisement which strikes suddenly against the reader's indifference and enlivens his mind to receive a sales message." Ironically, it was Rubicam's partner Orr Young who gradually developed a reputation for pulling his punches, preferring to let his partner take the strain while he enjoyed the benefits of their growing success. Ray Rubicam gradually took over control of the agency during the 1930s, ousting his partner in 1934. (After a protracted break, Young returned to the industry in the late 1930s, working mainly as a political consultant, and published his memoirs in 1949).

Young & Rubicam was also the first agency to establish a research department, under the management of George Gallup. Gallup had begun his career as an interviewer at D'Arcy, then refined his approach to market testing at Northwestern University in a mammoth study of readers' attitudes towards newspapers and magazines in which more than 60,000 people were interviewed on their attitudes to different forms of editorial content. These results were published in 1932, and many agencies tried to persuade Gallup to join them. However "Raymond Rubicam was far more interested intellectually in how advertising works than other people I talked to," said Gallup later (Reminiscences, Columbia Oral History), "and he offered me the complete freedom that I didn't think was possible in the business world." Gallup joined Y&R in 1932, founding the agency's copy research department, which he head for the next 15 years. (He left in 1947 to form market research company Gallup & Robinson, where he initiated what was to become the hugely influential Gallup Poll, despite an early stumble when the agency famously failed to predict the outcome of the 1948 Presidential Election correctly. It had forecast a defeat for Truman, not a victory).

One of the more significant results of Gallup's research during the 1930s and 1940s was the discovery that most newspaper readers were most likely to look at the "funny pages" – the cartoon strips – before anything else. As a result, instead of the text-heavy blocks then favoured by most agencies, Young & Rubicam began to experiment with picture caption ads, occasionally presented like a comic strips, which they placed in the coloured Sunday comics. These proved very successful, and subsequent research led the agency to develop a style of short first paragraphs, headlines of 11 words or less, and big breathing spaces and subheadings in copy. In a rather more unusual development, Rubicam acquired Tide magazine, a weekly advertising trade journal launched by Time Inc, and attempted to establish it as a rival to Printers Ink and Advertising Age. However he was no more able than Time to make the publication work, and he eventually transferred ownership to the magazine's editor. (It was eventually acquired by Billboard and later folded).

The agency moved into radio during the 1930s, but with less conviction than other agencies – Rubicam was a die-hard supporter of print. However, Y&R did secure the talents of a then comparatively little known comedian named Jack Benny, and placed General Foods' Jell-O as the sponsor of his comedy variety show. The sponsorship was typically atypical. Rather than present straight plugs for the product, Benny adapted the product's name for his introductory spiel: "Jell-O again. This is Jack Benny speaking…"

By this time, "Ruby", as he was known to younger members of his team, usually behind his back, had begun to play a smaller role in the actual creation of the agency's ads, taking on the role of administrator, and then chairman. Yet he was both admired and feared. According to Draper Daniels, even if he was seldom seen by the creative department, "his presence was everywhere". Nothing could be worse than to face his displeasure. If presented with copy which displeased him "he would hold it at arm's length as if it were decaying garbage that was dirtying his fingers. Quietly and clearly, with each word carefully spaced, he would say… 'I… think… that's… STUPID!'. At this point he would drop the paper and let it flutter slowly to the floor". During the 1930s was succeeded as president by Chester LaRoche. "I felt like a cog in a machine," said Rubicam in 1974, "even though I was the biggest cog. I had less and less to do with planning and making ads, and working internally with our own people, and more to do with calling on chief executives, many of whom cared little about advertising." In 1940, he married for the second time, to opera and musical comedy star Bettina Hall. Four years later, he retired aged 52, and spent the next 30 years as a real estate developer. He died in May 1978.

During the later 1940s, the agency began to venture overseas, opening a London office at the end of World War II. In 1944, Chester LaRoche left to run the new Blue broadcasting network, later to become ABC, and he was succeeded as president by Sigurd Larmon, who was to take Young & Rubicam to new heights during the pots-war era. Crucially, Larmon was a keen supporter of the new medium of television, and he quickly established the agency as one of the market-defining agencies of the time. In his period as head of the agency he increased billings from $40m to over $280m by 1962. Among other accomplishments Y&R was the first agency to place a colour ad on American television, for Jell-O in 1951. It was also one of the first agencies to instinctively understand the power of images over words, and its advertising was often memorable for what it called "dramatic demonstration". For example, as Steven Fox describes in his book The Mirror Makers, "a Goodyear tire being crushed and returning unblemished, a Remington razor taking the fuzz off a peach, a Band-Aid picking up an egg." Larmon was in turn succeeded at the helm of Y&R by George Gribbin and then Edward Bond, who pushed the group further into the international market, an area where the agency still lagged behind other groups.

Yet not even Y&R could maintain its position on the cutting edge forever, and during the 1960s its creative reputation had been eclipsed by a new breed of hipper, faster-talking young agencies, such as Doyle Dane Bernbach, Ogilvy & Mather and Leo Burnett. Ed Ney took over as CEO in 1970, and undertook a brave paring down of the advertising business, cutting staff and appointing Alex Kroll as creative director; Alexander Brody as head of international. At the same time, Ney mounted an aggressive acquisition drive to bolt on subsidiaries with expertise in other fields. Healthcare agency Sudler & Hennessey was purchased in 1973, as well as direct marketer Wunderman Ricotta & Kline, and sales promotion agency Cato Johnson three years later. Marsteller, including its public relations division Burson-Marsteller, was added in 1979, making Y&R the global #1 by billings.

Alex Kroll became CEO in 1985 after Ney's retirement but a new slump began in the early 1990s. During the 1980s, many of the agency's rivals had been swallowed up by conglomerates such as WPP and Omnicom. Y&R, however, stayed fiercely independent. By the 1990s, this independence was beginning to cost the agency clients and market share. Once again, Y&R fought back. Much of the agency's success during that period can be credited to Kroll's successor Peter Georgescu who replaced the company's traditional high brow New York stance with a much more aggressive style. He also built a strong international network through acquisitions in Asia, Latin America and Europe, and the company's long-standing relationship with Japan's Dentsu was further cemented through the creation of Asian network Dentsu Young & Rubicam.

The capture of Colgate-Palmolive's consolidated global account in 1995 reinforced Y&R's return to strength. The following year, the company sold one-third of its equity to venture capitalists Hellmann & Friedman as part of a recapitalization of the business. In 1998, Georgescu successfully floated part of the group's stock. Just under half of the shares went public in two offerings, raising $800m in total. Of this, the company netted a large chunk to pay off debts and fund acquisitions. That same year, Danone consolidated the whole of its $300m global account with Y&R, and the agency went on to capture most of Ford Motors' business in Europe. In 1999, newly appointed chairman-CEO Tom Bell paid £25m to acquire much courted UK independent Rainey Kelly Campbell Roalfe.

Y&R's long-cherished independence finally came under attack in April 2000 when the company's share price was badly dented following the announcement that key client Citigroup was reviewing the account. Within days, the group had received a friendly takeover bid from Martin Sorrell's WPP. However Y&R's board was not happy with these advances, concerned about the extent of control demanded by the British company. It quickly put in place a "white knight" deal with another, initially unnamed partner before tentatively opening negotiations with WPP. The implication was that Y&R was willing to talk to WPP, but only on its own terms. If the takeover bid went hostile, the agency threatened to activate its potential white knight. That stance appeared to work. By early May, Y&R appeared to have escaped WPP's clutches, and instead announced a merger with its white knight, now revealed to be French group Publicis.

However, this revelation had quite the opposite effect which Y&R's board had hoped for. Ford, then one of Y&R's biggest clients, was quick to voice its dissatisfaction with such a deal. Publicis, after all, managed the business of one of Ford's main European rivals, Renault, whereas its own account was already shared with WPP's Ogilvy & Mather. The threat of losing Ford in Europe encouraged Y&R shareholders to force the company back into talks with WPP. The deal was finally completed mid-month. A few weeks later Y&R chairman Tom Bell announced his resignation. He was replaced as chairman & CEO by Michael Dolan.

Despite a comparatively speedy integration into WPP, Y&R's performance over the next few years remained disappointing. Following a particularly weak new business performance during 2002, Dolan resigned unexpectedly in May 2003. Ann Fudge, a former senior Kraft Foods executive, was appointed as the new chairman and CEO of both the Young & Rubicam Brands group and Y&R Advertising, becoming the first black woman to run a major international advertising agency. But despite a restructuring of its US operations, Y&R continued to struggle. Fudge surrendered her role as CEO of Y&R Advertising in April 2005, although she remained chairman & CEO of the Y&R Brands umbrella group until the end of 2006.

Chris Jaques moved from regional director of Asia to CEO, Y&R North America at the end of 2006, but resigned just four months later for personal reasons. Finally, Peter Stringham, former chief marketing officer of HSBC, was appointed as the new chairman & CEO of Y&R Brands in February 2007. Tony Granger was poached from Saatchi & Saatchi New York in November 2007 to become global executive creative director, but was prevented until starting his new job until May 2008. See full profile for current activities

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