Then Hopkins went to work. He invented a personality, Professor Alexander P. Anderson—in fact, the real-life Quaker Oats technician from the University of Minnesota who had developed the puffing process—to explain the science behind puffed cereals. (“Personalities appeal,” Hopkins observed, “while soulless corporations do not.”52) He lovingly wrote up the process (125 million steam explosions in every grain!). He described the puffed grains (eight times their original size!). He hammered away at the theme of “foods shot from guns”—a theme that elicited howls of derision from the advertising community: “That idea aroused ridicule. One of the greatest food advertisers in the country wrote an article about it. He said that of all the follies evolved in food advertising this certainly was the worst. The idea of appealing to women with “Food shot from guns” was the theory of an imbecile.”53
Not so: Puffed Wheat and Puffed Rice were soon the most profitable breakfast foods on the market. Quaker, astonished, retained Lord & Thomas to promote its flagship Quaker Oats and other products.54
Hopkins later admitted that Lord & Thomas made some mistakes with Puffed Wheat and Puffed Rice. They pushed for newspaper advertising—a mass medium—for a product that the masses couldn’t afford. (The agency soon retreated to magazine ads only.) They distributed millions of samples “promiscuously,” Hopkins recalled ruefully. (“It never pays to cast samples on the doorstep,” he later concluded. “They are like waifs.”55) One series of ads offered a box of Puffed Wheat free to anybody who bought a box of Puffed Rice. (“The offer was ineffective . . . it is just as hard to sell at a half price as at a full price to people who are not converted.”56) But the agency learned from its mistakes, and when the next consumer product came through the door, Lord & Thomas was far better prepared.
Hopkins never ceased being the scheme man who had taken Grand Rapids and Chicago by storm, and at Lord & Thomas he persisted in his promotional ways. These, combined with Lasker’s powers of salesmanship, continued to generate marketing miracles.
One such scheme involved the creation of an “advisory board” in the Chicago offices of Lord & Thomas. This lofty-sounding body was actually sixteen Lord & Thomas employees, over whom Hopkins presided. Using Judicious Advertising and other vehicles, Hopkins heavily advertised the existence of this board, which was available to help anyone with an “advertising problem.”
As Hopkins wrote in a 1909 Lord & Thomas publication called Safe Advertising: “Here we decide what is possible and what is impossible, so far as men can. This advice is free. We invite you to submit your problems. Get the combined judgment of these able men on your article and its possibilities. Tell them what you desire, and let them tell you if it probably can be accomplished.”57 Several hundred entrepreneurs came to the advisory board’s table. Some 95 percent of them—those with what Hopkins called “dubious prospects”—were told to give up on advertising. The remainder, of course, were good prospects for Lord & Thomas.
Two visitors not sent packing were B. J. Johnson, head of the Milwaukee-based B.J. Johnson Soap Co., and his newly appointed sales manager, Charles Pearce, who appeared before the advisory board one morning in 1911.58 The company had been founded a half-century earlier, in 1864, and was mainly known for its Galvanic laundry soap. But even in 1911, the laundry-detergent field was a cutthroat arena, and the advisory board advised against a Galvanic campaign.
Do you have anything else, the board asked? Yes, Johnson and Pearce said, they did have another product—a bar soap made from palm and olive oils. The soap, which had been on the market since 1898 and had a nearly undetectable market share, was called Palmolive. The delegation from Milwaukee had low expectations for their obscure bar soap, but the Lord & Thomas board felt differently.
After internal discussions, they proposed to Johnson that the company mount a small test. Galvanic was then sold mainly through grocers. Lord & Thomas would approach these retailers in test markets and ask them to participate in a promotion called “Johnson Soap Week.” During Soap Week, shoppers who purchased a tin of Galvanic would be given a bar of Palmolive. Grocers who agreed to purchase Palmolive in advance would be listed in full-page advertisements telling consumers where they could get their “free” bar of soap. Johnson agreed to the scheme, and the promotion proved successful, establishing a “solid trade” in the obscure Palmolive brand.59
The real challenge, though, was to get Palmolive out from under the skirts of Galvanic and into drugstores, where it could stand on its own. The agency proposed a novel campaign in Grand Rapids for $1,000. When Johnson objected to the price, Lord & Thomas proposed a scaled-down experiment—for $700—in the lakeside town of Benton Harbor, Michigan. Johnson agreed.
The agency ran a series of ads touting the “beauty appeal” of Palmolive, and announcing that the manufacturer would “buy a cake of Palmolive for every woman who applied.” The next ad contained a coupon good for a ten-cent cake of soap at any store. The dealer, according to the coupon, would then charge Palmolive ten cents.
The notion of a dime changing hands, or at least appearing to change hands, was central to Hopkins’s scheme. (In fact, the dealer would be buying the sample bars at wholesale prices of less than a dime, thereby receiving a guaranteed profit on each bar sold.) The coupon gimmick also helped persuade dealers to stock the product. Lord & Thomas mailed a copy of the coupon in advance to local retailers, pointing out that every household in the vicinity would soon be getting one of these coupons—worth a dime, back in a day when a dime was worth something—and that consumers would certainly redeem them somewhere. The threat was clear: existing customers might go elsewhere. “We gain[ed] by this plan universal distribution immediately at a moderate cost,” Hopkins boasted.60
At a cost of approximately $700, Lord & Thomas persuaded several thousand Michigan women to try Palmolive. The product was good—the essential building block, according to both Lasker and Hopkins—and repeat sales in Benton Harbor paid for all advertising costs even before the bills came due. “We knew we had a winner,” wrote Hopkins.61
A subsequent test in Cleveland (where Palmolive sales had up to that point averaged about $3,000 per year) generated $20,000 in sales. Consumers redeemed twenty-thousand coupons, costing Johnson $2,000. With an additional $1,000 for newspaper advertising figured in, the campaign cost a total of $3,000, or about 15 percent of gross sales.62
From then on, it was simply a matter of ratcheting up the scheme in a series of ever-larger markets. When every local test returned the same results, Lord & Thomas persuaded Johnson to take Palmolive national. Buying a full page in the Saturday Evening Post, Lord & Thomas drew up an ad that made essentially the same offer that had been made in Benton Harbor. Then the agency sent out letters to fifty thousand druggists and retailers all over the country, explaining what was about to happen. More than $50,000 worth of orders poured in for a soap none of these retailers had ever seen. As an internal Lord & Thomas account put it:
It is an astonishing fact that on this circular alone, before the advertising appeared, over $50,000 worth of the soap was sold and the resultant sales in the four weeks following the appearance of the advertisement totaled almost $75,000. Almost 200,000 coupons were redeemed and the advertiser had gained a foothold on a national basis that had never before been contemplated. The astonishing thing was that the soap orders came from over 300,000 cities, towns, and hamlets in the United States and Canada.63
A juggernaut was now in motion. A similar ad four months later in the Ladies’ Home Journal generated a huge response. Dealers began placing ads—totaling some $30,000—announcing that they would redeem the Palmolive coupons. Johnson sold more than $100,000 worth of soap before the ad appeared. A year after the advertisement appeared in the Journal, Johnson was still redeeming up to two thousand coupons per month. An astonishing 99 percent of drugstores stocked Palmolive and ordered new stock on an average of between three and four times a year.64
Palmolive was now the best-selling soap in the world. One re
ason was that, despite the costs associated with advertising, Palmolive (at ten cents a bar) remained the lowest-priced “beauty soap” on the market. Competitors that traditionally had sold high-end soaps for as much as twenty-five cents a bar were forced to cut their prices to stay competitive.65
In 1916, B.J. Johnson Soap changed its name to the Palmolive Company.66 Lord & Thomas promoted a variety of products under the Palmolive brand—including shampoo and shaving cream—with great success, and the account remained with the agency until the 1930s.
Now comes one of the stranger stories from the Lasker-Hopkins heyday, drifting into the darker realms of commercial espionage and betrayal.
The melodrama begins in 1907, shortly after Hopkins’s arrival at Lord & Thomas. The Goodyear Tire & Rubber Company—an Akron-based tire manufacturer founded in 1898 by Franklin A. Seiberling and his younger brother Charles—was an established Lord & Thomas client with a consistent annual ad volume of about $40,000. Although this was a respectable figure for the early years of the twentieth century, Lord & Thomas proposed a significant expansion of the tire manufacturer’s advertising. After prolonged debate, Goodyear agreed to increase its ad budget to $250,000. This sum was twice as much as the company’s entire profits from 1906 and represented an enormous gamble.67
The huge expansion of the Goodyear account occasioned a memorable moment at Lord & Thomas. Robert Crane, then a young copywriter, was talking with Hopkins in Hopkins’s office: “Suddenly the door opened, and in rushed Lasker. Hopkins was standing up with his back to the wall, about two or three feet away from the wall. And Lasker doubled up his fist, and hit Hopkins in the chest, and said, ‘By God, Hopkins, we landed it!’ And Hopkins bumped his head against the wall, and his eyes bulged out, and he didn’t crack a smile. And said, ‘Isn’t that gratifying?’”68
But a problem soon emerged. After visiting Akron and prowling around the Goodyear plant, Hopkins confessed that he couldn’t figure out the merits of the tire that Goodyear was then promoting: the Straight Side tire, introduced in 1906.69 Who cares if a tire has “straight sides,” he asked? Don’t all tires have more or less straight sides? Goodyear’s technicians rushed to straighten him out. This patented construction, they told him, meant that size for size, Goodyear tires had 10 percent greater air capacity. Just as important, they could not be cut by the rim of the wheel in the wake of a puncture.
Hopkins listened, pondered, and came up with a plan: “I coined the name ‘No-Rim-Cut Tires.’ Across every ad, we ran the heading, ‘No-Rim-Cut Tires, 10% Oversize.’ The results were immediate and enormous. Sales grew by leaps and bounds. Goodyear tires soon occupied the leading place in tiredom.”70
According to Lord & Thomas records, sales of the No-Rim-Cut tire doubled in four months. Goodyear’s business increased from $2 million in 1906 to $9.5 million in 1910, reflecting both effective promotion and a huge surge in car production (from 33,200 cars produced in the United States in 1906 to 181,000 in 1910).71 By 1911, the company’s Akron plant was operating twenty-four hours a day to keep up with demand.72
Competitors soon imitated the No-Rim-Cut design, so Hopkins moved on to another angle: the tire’s patented, diamond-pattern antiskid tread, first introduced in 1908. He decided that this should be called the “All-Weather” tread. Again, sales boomed. Goodyear became the nation’s leading tire maker. Ad budgets grew from $250,000 a year—a sum that Goodyear had ventured with some trepidation—to an astounding $2 million.
But all was not well between Lord & Thomas and Goodyear. “I lost it,” Hopkins later wrote of the Goodyear account. His explanation was characteristically vague: “There developed a desire for institutional advertising which I could never approve.”73
Actually, the account left the Lord & Thomas fold for several reasons, including dramatic changes then taking place within the agency. In 1912, Albert Lasker decided that he had to get rid of his sole remaining partner, Charles R. Erwin. Lasker had muscled his way into his ownership position at the agency in 1904 with Erwin’s support. Over the next eight years, however, he became frustrated with Erwin’s minimal advertising skills. Erwin was a “business-getter,” in Lasker’s estimation, but not an ad man. Hopkins, too, had little use for Erwin. “He liked Mr. Erwin tremendously,” Lasker later commented, “[but] had nothing but the most supreme contempt for him on advertising, which he realized Erwin didn’t grasp at all.”74
In 1910, Lasker opened a Lord & Thomas office in New York, at Fifth Avenue and Twenty-Eighth Street, putting added pressure on himself to build business in two cities.75 By 1912, Lasker’s irritation with Erwin came to a head, and he announced that he wanted out. “I went back to Erwin,” he later recalled, “and told him that I wanted to split partnership with him . . . that I realized that I was a lone wolf, that I couldn’t be in a partnership.”76
Erwin took the bad news graciously. He knew Lasker was the true driving force behind the business, and generously suggested that Lasker should take more than half of the agency. Lasker made a counterproposal: “No, Mr. Erwin, that is totally unfair . . . I am going to make you a proposal. I will give you $400,000 for your half interest, and you agree not to go into the advertising business. Or, I will take $200,000 for my half interest, and I will agree not to go into the advertising business.”
It was a clever formula that Lasker used several times in his life: offering to buy out the other party for a certain sum or to be bought out for half that amount. Erwin chose to be bought out and arranged to stay on at the agency for five years as a non-partner. The changes were not divulged publicly. Erwin retained his title of president and an annual salary of $18,000.
By the end of 1914, however, Lasker had had enough. “I still had to pull my punches,” as Lasker later explained it, “[so] I asked him to go.” Lasker felt that he had done right by Erwin, but later admitted that Erwin never forgave him for forcing him out of Lord & Thomas.77
Soon enough, though, Lasker had his own reasons for feeling aggrieved. Several years earlier, Erwin had hired a young man named Louis Wasey. In Lasker’s estimation, Wasey was one of the ablest recruits ever to join Lord & Thomas. One day in 1915, Wasey advised Lasker to fire a colleague named W. T. Jefferson, whom Wasey described as a “bad influence.” Lasker did so, giving Jefferson a generous severance package. About two months later, Wasey resigned from Lord & Thomas and went into business with Jefferson.
In those interim two months, however, Lord & Thomas salesmen noticed that whenever they went out in response to a prospective client’s call, they ran into representatives from “Jefferson & Wasey” pitching to that same company. Lasker’s hardnosed lawyer, Elmer Schlesinger, decided that Lord & Thomas’s switchboard operator was slipping information to the rival agency. He arranged a fake inquiry from a friendly firm, and—sure enough—Jefferson & Wasey showed up. The switchboard operator was fired and shortly thereafter turned up as Jefferson & Wasey’s switchboard operator.
At about this time, Charles Erwin also joined the new agency, which was renamed Erwin, Wasey & Jefferson.
Meanwhile, there was the problem of Goodyear. The tire company was originally Erwin’s account, but it had been built up mainly by Hopkins. When Erwin left Lord & Thomas, Goodyear stayed with Lasker’s agency, even though Goodyear cofounder Frank Seiberling felt less comfortable with Lasker than with Erwin. Seiberling’s discomfort was heightened by his increasing irritation with Hopkins, who disdained the kind of institutional advertising that Seiberling was now demanding. “Seiberling wanted to be glorified institutionally,” copywriter Mark O’Dea explained, “[and] Hopkins and Lasker wanted to tell why the tires were better.”78
All of these factors converged, and a crisis erupted one day in this tumultuous year of 1915. Seiberling called a summit conference with Lasker and demanded that Hopkins be taken off the Goodyear account. “That put me on the spot,” Lasker recalled. Lasker agreed with the client in the particulars of the case, but felt it was “one of those stubborn places” where he couldn’t influence Ho
pkins. And humiliating Hopkins by bumping him from the Goodyear account might lead to disaster. “I knew I’d lose [Hopkins] for everything else,” said Lasker, “and that left me no choice.”79 He refused to move Hopkins. As expected, Goodyear fired Lord & Thomas and retained Erwin, Wasey & Jefferson.
As a rule, Lasker didn’t mind when his subordinates left Lord & Thomas and went into competition with him. Later in his life, in fact, he took great pride in the fact that thirty-nine agencies had been founded by Lord & Thomas alumni. But he believed in honorable partings of the ways, and he felt that Wasey had behaved dishonorably. “He is the only man that ever I was connected with,” Lasker later commented, “that did something that was studiedly wrong.” Although Lasker rarely held grudges, he resented Wasey for the rest of his life.
Claude Hopkins earned every bit of his legend, and he was incredibly productive. “Hopkins could photograph the thing instantly,” Lasker later commented. “Three days after he would take over the thing, he would have an immortal campaign written.” In fact, Lasker sometimes sat on Hopkins’s output for days or weeks, fearing that the client wouldn’t value a product that had been generated so quickly.80
Hopkins enjoyed no forms of amusement, Lasker recalled; he worked incessantly, although, like Kennedy, he was a “prodigious drinker.”81 As Mark O’Dea wrote, he was also a hard man to fraternize with:
Hopkins was always difficult in conversations. His intimacies were few. He was far from a social being . . . never a mixer. In many ways, he was Lasker’s opposite, for the latter was cosmopolitan, gay, voluble, and won a countless host of friends from Presidents to caddies. Whereas Lasker was versatile, Hopkins was single-traced. His one subject was advertising copy. For music, books, politics, sports, plays, personalities, he had little concern.82
The Man Who Sold America: The Amazing (but True!) Story of Albert D. Lasker and the Creation of the Advertising Century Page 14