The "Perfect" Advertising Medium

[kfbkfb]

I admit being a somewhat taken aback when I read that (IIRC) Mr. Paley of CBS stated the Color TV would be a great attraction to advertisers, to be able to better show their products/services in color (I thought that color TV was developed for the sake of having color tv, not for advertisers).

IIRC, the "Radio Music Box" idea from David Sarnoff didn't include advertising, it would be a public service.

Given the systems we have now (portable, wireless audio and video [radio and TV], portable, wireless on demand audio and video [Spotify, YouTube etc.], working backwards by starting with the best known way of advertising, what sort of ad + content system would exist?


Kirk Bayne

 

[PTBoardOp94]

We'd only have Instagram, TikTok and maybe YouTube.

The reason is simple: broadcast media can only target broad groups, so it's great for products nearly everyone uses like household cleaners and apparel.

But there is also an enormous market for niche products. For example, baby formula. Unless you have children under 2, or perhaps considering having your first child, advertising to you is a waste of time. Even if an ad buy in radio or TV from Enfamil is perfectly targeted to Women 18-40, only a fraction of them actually need that product at that time.

That's where electronically profiled advertising comes in. Enfamil, Pedialyte, Pull-Ups, Fisher-Price, etc. can target exactly the audience they want: parents of young children, and maybe grandparents, aunts, uncles for reinforcement.

I think if targeted media had come first, it would be very hard for mass media to get a foot hold.

 

[TheBigA]

IIRC, the "Radio Music Box" idea from David Sarnoff didn't include advertising, it would be a public service.

There's more to that story. Sarnoff came up with the idea in 1920, before the idea of commercial radio. The first commercial aired on WEAF radio in 1922. He figured sales of the box would be enough to pay for the service. One factor he didn't consider was the cost of music. Sarnoff got an introduction to that in 1926, when NBC first appeared. The first broadcast on NBC was the voice of the network's president, welcoming listeners to the new network. Then his secretary performed some music on a piano. A few days later, the network received a letter from the musicians union, filing a grievance because the piano player was not a member of the union. From that day on, the network had to hire union musicians for all of its programs. In fact for many years, record labels and the musicians union sued radio stations to prevent them from playing recorded music.

But back to the advertising aspect. In Sarnoff's days, advertisers bought programs. So you'd listen to the Chrysler Hour featuring Bob Hope, or something like that. The advertisers owned the programs, and the hosts would also do the ads. The idea of :30 spots, and 14 minutes an hour of advertising didn't happen until much later. Now we're at a point where people want programming for free, uninterrupted by advertising. So the question becomes how much advertising is too much.

In the meantime, Sarnoff's music box has become a reality with the Amazon Echo or a number of internet radio devices. You pay for the box, and then subscribe to a music service, which pays for the content. Not exactly what Sarnoff had in mind.

 

[davideduardo]

In fact for many years, record labels and the musicians union sued radio stations to prevent them from playing recorded music.

The musician's union, the American Federation of Musicians, did not really become a force in thwarting the airplay of recorded music until the later 30's when James Caesar Petrillo, a rather mediocre Chicago musician, took control of the union. He would remain in power well into the 50's and tried to force every station that played recorded music to have an amount of time for a live studio band.

JAMES CAESAR PETRILLO: Controversial leaderof Musicians' Union

James Petrillo not only ruled the livihood of America's musicians, he dramatically influenced the record industry and had a profound effect on the radio industry from the late 1930's into the 1950's, We present here a series of links and documents that help to understand this major figure in...

worldradiohistory.com

The strength of Petrillo's union even reached smaller markets such as Chattanooga, where there was a legal case requiring a station to build a studio for a band.

ASCAP began in the late 1910's to protect the rights of composers and their sheet music royalties. But by the later 20's, it became obvious that radio was a source of income.

"The advent of radio in the 1920s brought an important new source of income for ASCAP. Radio stations originally only broadcast performers live, the performers working for free. Later, performers wanted to be paid, and recorded performances became more prevalent. ASCAP started collecting license fees from the broadcasters. Between 1931 and 1939, ASCAP increased royalty rates charged to broadcasters more than 400%."

American Society of Composers, Authors and Publishers - Wikipedia

en.wikipedia.org

 

[davideduardo]

I admit being a somewhat taken aback when I read that (IIRC) Mr. Paley of CBS stated the Color TV would be a great attraction to advertisers, to be able to better show their products/services in color (I thought that color TV was developed for the sake of having color tv, not for advertisers).

But the motivation behind the CBS sponsored system (which failed faced with the RCA creation) was to be able to attract viewers and to sell advertising.

The cold, hard fact of commercial broadcasting is that their job is to "produce" viewers or listeners which they can sell to advertisers. The real "product" is listenership or viewership. Programming is an ingredient in that product.

 

[Don CT]

But the motivation behind the CBS sponsored system (which failed faced with the RCA creation) was to be able to attract viewers and to sell advertising.

The cold, hard fact of commercial broadcasting is that their job is to "produce" viewers or listeners which they can sell to advertisers. The real "product" is listenership or viewership. Programming is an ingredient in that product.

When the FCC granted the first licenses was their intent that they be for advertising or public service?

 

[TheBigA]

When the FCC granted the first licenses was their intent that they be for advertising or public service?

Keep in mind that the FRC was originally under the Department of Commerce, and the early Secretary of Commerce, who oversaw the early growth of radio was Herbert Hoover. He used his power to move the amateur radio operators off the main band and onto their own amateur band. The public service aspect was copied from other public-private partnerships that existed.

 

[davideduardo]

When the FCC granted the first licenses was their intent that they be for advertising or public service?

Neither. At the beginning, they were thought of as an experiment.

The Department of Commerce was the responsible agency for the licensing radio stations from the dawn of electromagnetic communication until the charter of the FCC in 1934. The "temporary" Federal Radio Commission was created in 1927 to reorganize the use of the radio band after which the DoC continued in charge.

When the DoC started licensing stations, they were experimental, most operating just a few hours a day... or week. Some belonged to companies eager to explore the potential of radio to sell receivers. Others wanted to promote their newspaper, car dealership or insurance company. Many were just experimenters.

It took a while to realize that radio was an ad medium beyond an owner's self-promotion. As that became more obvious, it was becoming necessary to remove the experimenters and hobbyists from the band. By 1927, 5 years after the first "real" licenses with call letters were authorized, the government cleaned most of the amateurs off the 550-1500 AM band.

Here are the FRC bulletins, from the period of radiotelegraphy and experimental broadcasts to the early 30's:

DEPARTMENT of COMMERCE - Pre-FCC Radio Service Bulletins from 1915 - 1932

As BigA mentioned, Hoover oversaw the development of radio assignments:

"Between 1923 and 1929, the number of families with radios grew from 300,000 to 10 million, and Hoover's tenure as Secretary of Commerce heavily influenced radio use in the United States. In the early and mid-1920s, Hoover's radio conferences played a key role in the organization, development, and regulation of radio broadcasting. Hoover also helped pass the Radio Act of 1927, which allowed the government to intervene and abolish radio stations that were deemed "non-useful" to the public. Hoover's attempts at regulating radio were not supported by all congressmen, and he received much opposition from the Senate and from radio station owners." (Wikipedia)

 

[Kelly A]

Many of the originally licensed stations back in the early 20's, were offshoot businesses of another business with the intent of promoting the main business. For example: The original Westinghouse stations like WBZ in Boston were built by Westinghouse with the idea specifically to build and sell Westinghouse products. Same goes with Crosley stations, for selling Crosley radios. Fisher stations in Seattle were built and funded primarily to promote Fisher Flour and baking products. Eventually radio stations started accepting other sponsorships as well, and the commercial radio business was born.

 

[TheBigA]

For example: The original Westinghouse stations like WBZ in Boston were built by Westinghouse

On the other hand, Westinghouse station KDKA was originally built by a company engineer as a side project. However, it moved in to the company building pretty quickly. Westinghouse Newark also launched WJZ. National Life Insurance started WSM in 1925 to help sell insurance. WLS was owned by Sears, Worlds Largest Store. Bamberger's Department Store launched WOR on the roof of it's Market Street store in Newark. AT&T started WEAF in NYC, and it is known for airing the first commercial in 1922. Radio stations were the original company website.

 

[Kelly A]

On the other hand, Westinghouse station KDKA was originally built by a company engineer as a side project. However, it moved in to the company building pretty quickly. Westinghouse Newark also launched WJZ. National Life Insurance started WSM in 1925 to help sell insurance. WLS was owned by Sears, Worlds Largest Store. Bamberger's Department Store launched WOR on the roof of it's Market Street store in Newark. AT&T started WEAF in NYC, and it is known for airing the first commercial in 1922. Radio stations were the original company website.

Yep, so to answer the OP's question: Radio was essentially created to advertise.

 

[davideduardo]

Yep, so to answer the OP's question: Radio was essentially created to advertise.

Not really; not quite. The purpose of a lot of those early licensed stations... the ones that were not built as manifestations of creative techs and engineers... was to promote their own brand the way companies sponsor a local symphony orchestra or art museum. In quite a few cases, the motivation was to provide something to listen to so people would buy their radio sets.

In a sense, the same mentality as companies today have when buying naming rights to a stadium or other community structure or destination.

Those stations did not run ads as we know them. They were "the radio service..." of companies looking to enhance their image or to extend their brand. Newspapers saw radio as a supplement to their daily publication, insurance companies saw a radio station to build trust in their name.

It would be quite a while before unaffiliated entities began to buy programs on someone else's station.

And before stations were licensed as we know them today, in the earlier years of the 1910 decade up to their silencing during The Great War, there were many experimental stations with erratic programs and schedules. Some would go on the air once a week with a poem, a song, a reading and perhaps a prayer or blessing and then sign off. It was all about the thrill of putting something on the air.

Any of us who have built and started a station from scratch understand that, in that moment, the achievement of "doing it" was the greatest reward.

 

[davideduardo]

Radio stations were the original company website.

That needs to be printed on nice parchment paper and framed.

 

[Kelly A]

Those stations did not run ads as we know them. They were "the radio service..." of companies looking to enhance their image or to extend their brand. Newspapers saw radio as a supplement to their daily publication, insurance companies saw a radio station to build trust in their name.

It would be quite a while before unaffiliated entities began to buy programs on someone else's station.

And before stations were licensed as we know them today, in the earlier years of the 1910 decade up to their silencing during The Great War, there were many experimental stations with erratic programs and schedules. Some would go on the air once a week with a poem, a song, a reading and perhaps a prayer or blessing and then sign off. It was all about the thrill of putting something on the air.

Any of us who have built and started a station from scratch understand that, in that moment, the achievement of "doing it" was the greatest reward.

Fair enough, but the purpose, assuming this whole radio thing took off, was to cross promote the parent company, whether that was via calling it a 'service-of', or a product or service cross promotion. Prior to actual licenses being issued use of radio for entertainment was essentially by amateur radio hobbyists. When the licenses started being issued, companies like Westinghouse, Crosley, and later, RCA started building stations in all the major markets:

The Growth of Radio​

The growth of radio in the 1920s and 30s can be seen in Tables 1, 2, and 3, which give the number of stations, the amount of advertising revenue and sales of radio equipment.


Table 1
Number of Radio Stations in the US, 1921-1940

Year	Number
1921	5
1922	30
1923	556
1924	530
1925	571
1926	528
1927	681
1928	677
1929	606
1930	618
1931	612
1932	604
1933	599
1934	583
1935	585
1936	616
1937	646
1938	689
1939	722
1940	765

Source: Sterling and Kittross (1978), p. 510.

Radio Advertising Expenditures in Millions of Dollars, 1927-1940

Year	Amount in Millions of $
1927	4.8
1928	14.1
1929	26.8
1930	40.5
1931	56.0
1932	61.9
1933	57.0
1934	72.8
1935	112.6
1936	122.3
1937	164.6
1938	167.1
1939	183.8
1940	215.6

Source: Sterling and Kittross (1978).

Sales of Radio Equipment in Millions of Dollars

Year	Sales in Millions of $
1922	60
1923	136
1924	358
1925	430
1926	506
1927	426
1928	651
1929	843

Source: Douglas (1987), p. 75