#206 Albert D. Lasker the creation of the advertising industry

Albert Lasker, often hailed as the father of modern advertising, transformed the industry from mere space brokering to a creative powerhouse. His aggressive and dynamic approach attracted both admiration and dread, drawing in big names like RCA's David Sarnoff and American Tobacco's George Washington Hill, who thrived on Lasker's fervor. Despite his professional triumphs and personal wealth, Lasker battled a lifelong depressive illness, which he fought with the same intensity that fueled his career. His innovative strategies, such as focusing on the power of ideas and fostering close client relationships, led to the relaunch and revitalization of countless brands. However, Lasker's later years were marked by a quest for anonymity and a retreat from the public eye, as detailed in Jeffrey Cruikshank and Arthur Schultz's book "The Man Who Sold America." His story is a testament to the profound impact one individual can have on an industry, as well as the complex interplay between success and personal demons.

• Albert Lasker was known for his boundless energy and imagination, which was both admired and feared.
• Described as charming, brilliant, thrilling, and exhausting by friends.
• Subordinates admired him but also dreaded the tumult his presence brought.
• Clients learned to fully embrace Lasker's aggressive and dynamic approach.
• His fervor in pursuing life was polarizing, alienating some while energizing others like David Sarnoff and George Washington Hill.
• Herbert Field and other associates expressed a mix of frustration and admiration for Lasker.
• Lasker's personal and professional lives were intense, and he was open about his mistakes, including his failed second marriage.
• Known as the father of modern advertising, he transformed the industry from space brokers to creative forces.

"A lot of people can't stand me, he once admitted, because they think I'm too aggressive and too dynamic." This quote exemplifies Lasker's self-awareness of his polarizing nature and the strong reactions he elicited from people around him.

"He's the only man I felt I'd like to murder every now and then." Herbert Field's quote reflects the complex relationship and intense emotions Lasker could inspire in his colleagues.

• Lasker revolutionized the advertising agency model, focusing on high service for key accounts.
• He achieved high margins and personal wealth through this model.
• Maintained close relationships with powerful business figures, providing cross-industry insights.
• David Sarnoff admired Lasker's judgment and valued his insights.
• Lasker was aware of his significant impact on American daily life.

"He pursued life with a fervor that offended and alienated many people." This quote highlights Lasker's intense approach to life and business, which was both influential and controversial.

"Give him an equal knowledge of the facts, said RCA's legendary head David Sarnoff. And I'd rather have his judgment than anybody else's." Sarnoff's quote underscores the high regard in which Lasker's business acumen was held by industry leaders.

• Lasker suffered from major depressive illness throughout his adult life.
• Experienced a complete mental and emotional collapse at the age of 27.
• He struggled with sleep, alcohol, mood swings, and impulsive behavior.
• Despite his illness, Lasker was resilient, drawing on his energy and self-awareness to succeed.
• He recognized the value of troubled geniuses in his work, possibly due to his own experiences.

"I could do nothing but cry, he said." This quote reflects Lasker's vulnerability and the severity of his depressive episodes.

"His rare ability to put troubled geniuses to work on challenging problems." Jeffrey Cruikshank's observation about Lasker suggests that his own struggles may have given him a unique capacity to harness the talents of similarly troubled individuals.

• In his later years, Lasker sought anonymity in his endeavors.
• Became increasingly invisible, with a curtain between himself and public history.
• The book "The Man Who Sold America" by Jeffrey Cruikshank and Arthur Schultz aims to reveal the true Albert Lasker.

"Little by little, Lasker became invisible." This quote captures Lasker's gradual retreat from public life and the deliberate obscurity he sought.

• David Ogilvy, in his book "Ogilvy on Advertising," credits Lasker as a pioneer from whom he learned.
• Lasker was known for his wealth, lavish spending, and the value he placed on advertising as salesmanship.
• Lasker focused on impactful copywriting to drive sales, leading to high profit margins for his agency.
• Ran Lord and Thomas as a dictatorship, avoiding unnecessary business conventions and emphasizing personal control.

"Albert Lasker made more money than anyone in the history of the advertising business, and he spent more, and he got his money's worth." David Ogilvy's quote emphasizes Lasker's financial success and his belief in the value of his expenditures.

"Lasker held that if an advertising agency could write copy which sold the product, nothing else was needed." Ogilvy's summary of Lasker's philosophy shows his single-minded focus on the power of copywriting to drive business success.

• Lasker recognized the untapped potential of the advertising industry and capitalized on it.
• His father, Morris Lasker, had a profound influence on his career and personal philosophy.
• Albert Lasker's approach to business was shaped by lessons learned from his father's experiences during the economic panic of 1893.
• Lasker's business strategy focused on personal relationships, talent acquisition, and a simplified cost structure.
• He emulated his father's aversion to borrowing and debt, despite later lending money to others.

"I received the full impact of the panic as a lesson throughout my business life. I never borrowed." This quote shows how Lasker's father's experiences during a financial crisis shaped Albert's conservative approach to business financing.

"The effect was tremendous. These were words from an oracle." The quote indicates the deep influence Morris Lasker had on Albert, akin to that of a wise and revered figure.

• Lasker initially planned to pursue journalism but was persuaded by his father to try advertising.
• Began his career at Lord and Thomas with the intention of a short tenure, which turned into 44 years.
• The advertising industry was evolving, with a growing need for sophisticated marketing of manufactured goods.

"To ask a reporter to become an advertising man was to enter a life of shame." This quote reflects the low regard in which advertising was held at the time Lasker entered the industry.

"Gradually, though, a number of factors converge to make advertising a necessity and therefore increasingly acceptable." This observation outlines the changing perception of advertising as it became a critical component of business strategy.

• The early 1900s saw significant technological advancements that enabled new products to be manufactured.
• Development of a national transportation network, specifically railroads, facilitated the distribution of goods across the United States.
• The rise of intermediaries like department stores and mail order houses (e.g., Sears, Roebuck) helped distribute the flood of new manufactured goods.
• The emergence of national magazines and newspapers increased the circulation of daily newspapers, expanding the reach of advertising.

"Then you have the development of a national transportation network. The railroad's total miles nearly doubled in the decade in which Albert Lasker reported for work." "Sears is doing $10 million of sales in 1900." "The circulation of daily newspapers in the United States jumped from 250,000 in 1860 to 2.2 million in 1900."

These quotes highlight the technological and infrastructural developments that allowed businesses to grow rapidly, with transportation and communication playing key roles in expanding markets and advertising reach.

• Albert Lasker noticed that advertising firms were primarily space brokers, not contributing creatively to the ads.
• Lasker, as a gifted salesperson, brought in new accounts and was mentored by the owner of the agency, Thomas.
• Thomas and Lasker had a complex relationship, evolving from boss and employee to partners and adversaries.
• Lasker's early success in sales convinced him to stay in Chicago rather than moving to New York.

"Advertising firms did little more than broker space and publications." "His job is just literally go around, talk to owners of businesses and sell them, say, hey, we will advertise for you."

These quotes describe the traditional role of advertising agencies as middlemen and Lasker's initial role within the industry, which he later sought to transform.

• Lasker's big break came when he successfully persuaded a Cincinnati alcohol manufacturer to sign with Lord and Thomas after initially being rejected.
• He realized that he knew as much as anyone else in the industry, which was not well-understood by its own participants.
• Lasker's success was driven by persistence, confidence, and the realization that the industry had untapped potential.

"First, we get to his mindset how he's just sick with worry about failing at this opportunity." "I had to find out what advertising was about."

These quotes reflect Lasker's determination to redefine advertising and his personal struggle with imposter syndrome, despite his outward success.

• Lasker began to suspect that advertising agencies were not fully exploiting their potential to create value.
• He pushed for a focus on creative aspects of advertising, aiming to increase the effectiveness and therefore the budgets of their clients' ads.
• Lasker's approach was to test and improve ad copy, leading to significant increases in revenue for both clients and the agency.
• He sought to understand the essence of good advertising, which led him to John E. Kennedy's transformative definition of advertising as "salesmanship in print."

"He was beginning to suspect that advertising agencies, certainly including his own, were leaving an enormous amount of money on the table." "Great advertising did the same work as great salesman."

These quotes encapsulate the core idea that advertising should be as effective as a salesperson, multiplying the impact of sales efforts through the medium of print. This concept became the cornerstone of Lasker's career and reshaped the advertising industry.

• Albert Lasker's career is highlighted as remarkable and fascinating, particularly his contributions to the advertising industry.
• The speaker is deeply intrigued by Lasker's story and recommends reading the book for more insights.
• Lasker's idea of leverage and understanding that "people are power law" is emphasized as a key principle.

"The subtitle says, the amazing but true story of Albert Lasker. It's just remarkable."

The quote indicates that the speaker is impressed by Albert Lasker's story and finds it worth sharing.

• The concept of self-interest is crucial in advertising; consumers and advertisers act based on their own interests.
• The "reason why" principle is a fundamental concept that Lasker, Hopkins, and Kennedy introduced to the advertising industry.
• The principle dictates that advertisers must provide a clear benefit to the consumers to create demand.

"But what's interesting is people are extremely self-interested. You have to tell them, what is the benefit."

This quote summarizes the core idea that advertising must focus on the benefits to the consumer, tapping into their self-interest.

• Hiring and retaining top talent is essential, even at a high cost, as demonstrated by Kennedy's high salary compared to his peers.
• Lasker's willingness to take over Kennedy's expensive contract shows his commitment to learning from the best.

"Kennedy was under contract to his patent medicine firm for an annual salary of $16,000... So Lasker takes over this contract. He's like, we have to pay this guy."

The quote highlights the importance Lasker placed on securing top talent, in this case, Kennedy, by taking over his substantial contract.

• Lasker's humility in seeking education from Kennedy despite being his boss.
• The parallel drawn between Alexander the Great being tutored by Aristotle and Lasker being tutored by Kennedy.
• Lasker and Kennedy's after-hours sessions were crucial in transferring knowledge and shaping Lasker's future principles.

"So this is where he's just like, hey, kennedy, I'm paying you. Teach me everything you know."

This quote reflects Lasker's eagerness to learn from Kennedy, understanding the value of mentorship and knowledge transfer.

• Kennedy's brilliance was accompanied by eccentricity, inconsideration, and expense.
• Lasker had to learn to manage talented but difficult individuals, a lesson echoed by Ogilvy.
• The power of copy and the laborious process behind Kennedy's successful ads are revealed.

"When he was with Kennedy, he felt he was in the presence of a great man. Yet Kennedy was eccentric, egocentric, utterly inconsiderate of everyone else, and expensive."

The quote captures the dual nature of Kennedy's genius and his challenging personality, which Lasker had to navigate.

• Kennedy's painstaking approach to writing ads, often revising extensively.
• The process behind successful ads is not visible to the public, who only see the end result.
• Lasker witnesses the hard work and dedication required to produce compelling advertising.

"He would be lost to the world for 2 hours thinking out a paragraph of 50 words."

This quote illustrates the intense focus and effort Kennedy put into crafting each piece of copy, a testament to the meticulous nature of advertising.

• Kennedy's advertising strategies led to significant cost reductions in customer acquisition.
• The importance of using insights gained from advertising to improve business and outcompete rivals is emphasized.

"They were paying $20 for something and happy to pay $20 for something that Kennedy can deliver for 40 times cheaper."

The quote demonstrates the dramatic impact of effective advertising on reducing costs and improving profitability.

• Lasker and Kennedy's approach to advertising involved sharing valuable content (essays on advertising principles) to attract clients.
• This strategy of offering valuable information before soliciting business is likened to modern content marketing.

"Here's twelve essays, a small book, right, of everything we know about advertising. If you want to talk over on how we can help you improve your advertising, at the end of this pamphlet, this book, whatever you want to call it, here's our contact information."

The quote describes Lasker and Kennedy's innovative approach to attract clients by first providing them with valuable insights into advertising.

• Lasker's determination to become a partner and his bold negotiation tactics.
• His ability to secure a partnership and financial backing through persuasion and leveraging his value to the firm.
• Lasker's transition to leadership following the death of his partner, Thomas, and the subsequent pressures and breakdowns he faced.

"The only way to hang on to Lasker and his accounts was to make Lasker a partner."

This quote explains the strategic move made by Thomas to retain Lasker's talent and the accounts he managed by offering him a partnership.

• Lasker's potential struggle with bipolar two disorder and the personal challenges he faced, including his wife's health and family responsibilities.
• The societal limitations of the time in addressing mental health issues, leading Lasker to retreat from the world.

"In 1907, though, the only option for an individual who couldn't stop crying was to retreat from the world."

The quote reflects the limited understanding and options for mental health treatment in the early 1900s, which affected Lasker's ability to cope with his condition.

• Canned food goods are likened to the technology of the day, with advancements in canning techniques and distribution channels.
• Companies like Campbell Soup leveraged this new technology to their advantage, similar to how tech companies today hire top talent.

"And that's really thinking about canned goods, canned food goods, as the technology of its day, because it was the perfection of new canning techniques."

The quote draws a parallel between the revolutionary impact of canning technology in the past and modern technological advancements.

• Claude Hopkins is introduced as a new key figure, with his autobiography and the book "Scientific Advertising" recommended for those in sales and advertising.
• Hopkins' challenging upbringing and his mother's struggles after being widowed or abandoned.

"This is where we're introduced to Claude Hopkins."

This quote marks the introduction of Claude Hopkins, another influential figure in the advertising industry, whose work would continue to impact Lasker's approach.

• Claude Hopkins' childhood was marked by immense hard work, which later translated into his career in advertising.
• His focus was solely on advertising, with no other hobbies or interests.
• Hopkins' fear of poverty fueled his work regimen of twelve-hour days, seven days a week.
• He believed his success was due to his exceptional hours, not exceptional ability.
• Hopkins was recruited by Albert Lasker due to his outstanding copywriting skills.

"If I have gone higher than any others in advertising or done more, the fact is, not due to exceptional ability, but to exceptional hours."

The quote emphasizes that Hopkins attributes his success in advertising to his intense work ethic rather than innate talent.

• Claude Hopkins and John E. Kennedy both emphasized the importance of appealing to the consumer's self-interest in advertising.
• Hopkins believed that effective advertising should not brag about a product but should appeal to each consumer individually.
• He considered himself a teacher in the field of advertising.

"We must figure out how to appeal to the consumer's self-interest. The group we call everybody is actually a collection of individuals, each mainly concerned about him or herself."

This quote underlines Hopkins' strategy in advertising, which focuses on targeting individual self-interest rather than a collective appeal.

• Lasker and his business partners learned the importance of technological superiority in business through a failed venture in the canned goods industry.
• Van Camp's inability to compete with Campbell Soup's advanced manufacturing highlighted the need for technological investment.
• Andrew Carnegie's philosophy of investing in the latest technology for competitive advantage is discussed.
• Lasker realized he should stick to his expertise in advertising and not venture into manufacturing.

"Invest in technology, the savings compound. And sometimes it's the single difference between a profit and a loss."

This quote from Andrew Carnegie, which is echoed in Lasker's experience, stresses the importance of investing in technology as a key factor in achieving business success.

• Lasker's competitors built upon his advertising insights, focusing more on consumer psychology.
• BDO, a new advertising agency, quickly rose to success by building on Lasker's fundamental concepts.
• Lasker's absence from the industry led to a loss of competitive edge for his company, Lord and Thomas.

"New competitors were on the horizon... They focus more on the psychology of the consumer, and they met with almost immediate success."

This quote indicates how Lasker's competitors used his foundational work in advertising as a stepping stone to further innovation, particularly in understanding consumer psychology.

• Lasker overcame objections to advertising Kotex by demonstrating the product's value to a skeptical magazine editor.
• Coco Chanel's insight into the women's fashion market is compared to Lasker's approach.
• Lasker's strategy involved not artificially narrowing the market for products, as demonstrated by the evolution of Kleenex from a makeup remover to a disposable handkerchief.

"The market of the product might as well triple if it weren't purely a makeup related purchase."

This quote reflects the discovery that broadening the use of Kleenex beyond makeup removal could significantly expand its market potential.

• Lasker advised the American Tobacco Company to focus on a single strong brand, Lucky Strike, rather than diversifying.
• This advice aligns with the investment philosophy of not diversifying if you have a winning product.

"Stop advertising most of your brands... Instead of spending a little money and a moderate amount on money on each of these 50 products, take what you spend on them and put it behind Lucky."

Lasker's advice to the American Tobacco Company to concentrate their resources on promoting Lucky Strike reflects his belief in focusing on a single, successful product to maximize impact.

• Lasker's wife describes him as both egotistical and modest, depending on his familiarity with the subject.
• Despite his success, Lasker struggled with feelings of inadequacy and impostor syndrome.
• Lasker's decision to close Lord and Thomas was influenced by financial considerations and a desire for new explorations.

"You are insufferably egotistical on the things you know nothing about, and you are painfully modest about the things about which you know everything."

This quote from Lasker's wife captures the complex nature of his personality, highlighting his confidence in unfamiliar areas and modesty in his areas of expertise.