Wall Street History

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Wall Street History

02/11/2005

Albert Lasker, Part II

Continuing our story on Albert Lasker (1880-1952), considered
the “father of modern advertising,” in 1904, Albert was made a
partner of Lord & Thomas and by 1912, he had acquired the
interests of both Mr. Lord and Mr. Thomas, thus becoming sole
owner.

Most advertising firms back then had just two copy writers but
Lasker, recognizing the potential, hired 10. One client, Frank
Van Camp of the Van Camp Packing Company of Indianapolis,
was the first in the world to put both soup and spaghetti in cans.
He was a large advertiser for these times, spending about
$15,000 to $20,000 a year.

Van Camp wanted Lord & Thomas to do more than just place the
advertising, he wanted “salesmanship-in-print.” Lasker sought
out Claude C. Hopkins, “the greatest copy writer who ever
lived.” It’s unclear from the 1949-50 interviews, from which this
series is adapted, just what Hopkins eventually did for Van Camp,
but we do learn about other campaigns Hopkins worked on
before moving to Lord & Thomas, including one for Schlitz beer.

Schlitz had been a poor second to Anheuser-Busch but with
Hopkins’s help it became number one for a spell. And it was all
about sterilization. In Lasker’s words:

“The Uhleins, who were the owners of the Schlitz brewery,
wanted (Hopkins) to write their advertising, and they took him
through their plant .They showed him every operation and he
wasn’t impressed by anything until they brought him to a room
full of steam where the bottles were being mechanically washed
in steam.

“They hurried through the room and said nothing. He asked
them, ‘What is this process?’

“They said, ‘This is the room where we sterilize the bottles in
live steam to prevent germs.’

“ ‘Oh,’ he said, ‘that’s most interesting.’

“ ‘There’s nothing to this. Every brewery does this. We’re not
the only one. No brewery could exist without doing this to their
bottles.’

“He said nothing to them, but when he submitted the campaign,
it was only around that. In no place did he say that every
brewery did not do it. He merely stated specifically that Schlitz
did it. That message, which was a salesmanship-in-print
message, made such a terrific impression on the public that
Schlitz beer grew by leaps and bounds, as if a magic wand had
been put over the firm.”

Albert Lasker had a hard time securing Hopkins. You see
Hopkins had retired, but eventually Lasker convinced him to go
back to work and the two had a 17-year partnership. Lasker:

“I often had this experience with Hopkins. He would go see a
client. In 24 hours he would have the answer that could, and
often did, quadruple their earnings – even increase them by eight
times. Within 48 hours he would write a campaign which would
run a year.”

And then there is the example of Quaker Oats. By 1909, the
company was spending large sums advertising two prepared
breakfast cereals, Wheat Berries and Puffed Rice. In the ads for
Puffed Rice they employed Japanese people and figures. The
rice was said to be large and very delicious. The Wheat Berries
were advertised as a large wheat food. But Quaker Oats wasn’t
successful with either.

Lasker and Hopkins had trouble getting Quaker to disclose the
margin on the products which were both 10 cents a package
retail. When the company disclosed it, Lasker observed it
“seemed too small to educate the public, for the public must
always pay for its education.”

“I won’t go into the economics, the ethics, or the social
implications of advertising – whether it is a good or a bad thing.
The only thing is this: if the public is to be educated to the use of
goods, it must pay the cost of its education. However, that
comes back to the public in time, because the volume increases
so much that the goods are sold at decreasing prices, and the
public is always sure of the quality.”

The whole puffed rice / wheat story originates with a Professor
Anderson at the University of Minnesota. He was doing research
on separating starch when one day he noticed a phenomenon
involving some grains of wheat he had in a test tube. Lasker:

“The wheat, without being destroyed, rose to eight times its
normal size .He at once realized that even though he had not
discovered anything which would be of aid in the research he
was doing, he had discovered something which might be
worthwhile commercially.”

Well, Professor Anderson cut a deal with Quaker Oats and
became a very rich man on the royalties as Quaker developed a
process that included a wooden gun. Lasker:

“Into this gun, they put the wheat or the rice. The room itself
may have been a hundred feet long. This gun was really a drum
which they subjected to great heat. The mouth was covered.
Then, automatically, when it had reached this great heat, the
covering of the gun was removed by means of a pulley. From
the pressure, the grains came out and went up to the ceiling – all
over the room – and expanded to eight times their size.”

So Hopkins told Lasker, “I know how they should advertise that.
They should advertise the process, because they have something
unique there. They have an exclusive thing.” Hopkins said he
would promote “The food shot from guns .We’ll show pictures
– or drawings – of these guns. We’ll show the grains hitting the
ceiling.”

Personally, I’m having trouble visualizing this, and I can’t say it
would have worked with me, but the bottom line was business
absolutely soared within weeks.

The next step was to convince Quaker that it was foolish to
advertise Puffed Rice and Wheat Berries separately. And Lasker
and Hopkins had other thoughts.

“Certainly, advertising to the American people that you’re going
to ‘Japanify’ them is not an appeal,” Lasker told Quaker. “They
will not respond to an allure for a lower standard of living. You
could do nothing worse than to associate your merchandise with
that. That has been one of the big things that has held you back.”

As big as Quaker Oats had become, Albert Lasker said “they
weren’t trained advertising minds.”

On the issue of separating the products, Lasker told Quaker:

“What we must do is advertise the process .No matter how
separately you advertise it, the public will know that it’s just
wheat and rice processed the same way when they eat it. They’ll
know that, and you won’t fool them.”

Lasker then suggested they change the name of Wheat Berries to
Puffed Wheat and just like that Puffed Rice and Puffed Wheat
were born. Then he tackled the issue of margin. Lasker said
they didn’t have enough. Quaker replied:

“We give 22 ounces of Quaker Oats for ten cents. We only give
eight ounces of Puffed Wheat and Puffed Rice. It’s a very big
package, but there’s so much air in it that it isn’t heavy. We
couldn’t give more, because with the bulk it takes, the
transportation charges would be too big. The stores wouldn’t
handle it. Our overhead is such that for ten cents we can give
them only eight ounces. We couldn’t charge more.”

Lasker and Hopkins countered, “Look, anyone who buys this
knows he’s buying a luxury. Eight ounces for ten cents is no
more out of line than is eight ounces for twelve cents. No one is
being fooled, and you haven’t enough money to educate the
public.”

Quaker raised the price. Puffed Rice and Puffed Wheat became
huge money earners, almost equal to Quaker Oats itself.

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Wall Street History returns on Feb. 18 with the final installment
of the Albert Lasker story the marketing of Camels,
Chesterfields and Luckies.

*The source for this material is an article for the December 1954
issue of American Heritage magazine titled “The Personal
Reminiscences of Albert Lasker,” as told to Professor Nevins
and Mr. Dean Albertson in a series of interviews, 1949-50.

Brian Trumbore

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