Ah, there’s a crucial question for any history of the MR business to start with. For years I told my business students and others, both verbally and in writing in my textbook Practical Marketing Research, that the earliest example of “modern MR” that I could find dates back only as far as 1905 and involved two famous U.S. companies, the Campbell Soup Company of Camden, N.J., and the Curtis Publishing Company of Philadelphia. I got the story from my former colleague Kenneth Hollander, who wrote it up in an article that appeared a number of years ago in Advertising Age. I am not sure where Ken first got the story, though.
It seems that at the turn of the last century, Campbell Soup was experiencing magnificent sales and profits, almost more than anyone could wish. But its “dilemma” was that it couldn’t explain exactly why its business was so successful. Of course Campbell was the only manufacturer of canned, ready-to-heat soup in the world then, so it was natural that its market share was then 100 percent. But who was buying its soups? Some Campbell execs thought that it had to be upscale families because only they could probably afford the 3-to-5-cents-per-can cost. Keep in mind that most blue-collar male heads-of-household were then supporting large families on annual gross incomes of $1,000 or less. But other Campbell execs attributed their sales to working-class families because of the convenience factor of not having to make soup from scratch. Such activity, they reasoned, was just too labor-intensive in households where many women even then worked part-time or full-time outside the home. So just who was right in trying to explain the great success of the Campbell Soup Company?
It was axiomatic then, as now, that American business leaders want to know why their products are successful or unsuccessful in the marketplace. And that makes sense. If you can find out why, then you can either repeat a success or avoid another failure. So sales executives at Campbell Soup got involved in heated discussions about this with advertising executives at the Curtis Publishing Company, just across the river in Philadelphia. Curtis published the Saturday Evening Post, the renowned nationwide weekly that was then the No. 1 magazine in the country and Campbell’s No. 1 advertising vehicle.
It was George C. Parlin, the top advertising executive at Curtis, who finally came up with a brainstorm for how to settle the longstanding debate over which market segments (that term did not exist until the 1960s) were driving sales. Parlin’s idea was to scrounge through peoples’ garbage and do a volumetric count of discarded soup cans. On the designated day, employees of Campbell and Curtis showed up for work wearing old clothes and traveled in teams to assigned neighborhoods and towns throughout the Philadelphia/southern New Jersey metro area. Neighborhoods were selected to represent different demographic groups, ranging from the wealthy, old-money families of Philly suburbs like Radnor, Wayne and Villanova to the poor immigrant families in the crowded tenements of South Philadelphia, Camden and Trenton. Using both horse-drawn wagons and a few early automobiles, the “researchers” returned their garbage to a government armory in the northeast section of Philadelphia that Curtis had booked for the occasion. There the Campbell and Curtis employees carefully sifted through tons of garbage until they came up with a final tally of soup cans, by neighborhood and town. It is rumored that the armory, which still stands just off Rising Sun Avenue, still has a brass plaque celebrating it as the site of the “first-ever marketing research study in America.”
What were the results of their novel garbage-based study? Well, it seems that virtually every demographic segment was purchasing Campbell Soup. The study found that Campbell’s success was due to the across-the-board appeal of its canned soups and that different market segments were attracted to Campbell soups for somewhat different reasons. Campbell Soup went on to even bigger and better successes and, at least for a while, Curtis Publishing continued to be a media powerhouse throughout the country.
The Campbell Soup/Curtis Publishing story is both an accurate and colorful one. But the problem is that this was not the first-ever incident of modern MR after all. So in researching this book, much to my chagrin I found out that I had been perpetuating incorrect information for years! That is the price a researcher pays when they go looking for “the truth.”
It seems that the real first-ever example of modern MR dates back 25 years before the Campbell Soup “garbage” study. It also involved a Philadelphia firm – the pioneer N.W. Ayer & Son advertising agency, which still exists, although it has long since moved its headquarters to New York City. From this point on, let me quote from a history of the Ayer agency that was written by Ralph Hower in 1949:
One of the most valuable services performed by an advertising agency today is analyzing the market for its clients. This is, indeed, the cornerstone of intelligent planning for an advertising campaign. The first realization of its possibilities came in 1879 and arose from the suggestion of a prospective client. For several prior years, N.W. Ayer had been trying to obtain the annual advertising contract of the Nichols-Shepard Company of Battle Creek, Michigan, manufacturers of [agricultural] threshing machines. But for two successive years, the Ayer representative, Mr. H.N. McKinney, found that George P. Rowell & Company had already carried off the order. In 1879, McKinney was determined to get a chance to compete for the next order and went to Battle Creek even before Nichols-Shepard had begun to formally plan their campaign for 1880. They agreed to consider a bid from Ayer, as well as others including the incumbent Rowell agency. McKinney asked for the list of newspapers in which Nichols-Shepard advertisements were run. “Make up your own list,” was the reply. “We want to advertise wherever we can sell threshing machines.” McKinney was taken aback: “Well, where do you sell threshing machines?” “That’s for you to find out,” came the client’s reply. “But,” protested McKinney, “how are you going to compare our list with Rowell’s if the newspapers are not the same?” The Nichols-Shepard representative answered: “Suppose you leave that to us. We would like you to prepare your own list and have asked Rowell to do the same.”
Perplexed but full of determination, McKinney returned to Philadelphia and reported on his client meeting. Since the business was worth having, his partners agreed that the agency should hastily put the entire agency staff to work on it. They sought help from the federal government in Washington, but at that time, unfortunately, the appropriate government bureau concerned with agricultural affairs had not yet been created. They suggested, though, that state-level officials might be able to supply useful data. Ayer immediately sent telegrams to the appropriate officials in every state and to those publishers likely to have firsthand knowledge of agricultural conditions and markets. For three days and nights the Ayer staff worked frantically . . . [finally completing] a crude but fairly adequate market survey by states and counties, together with a detailed plan for Nichols-Shepard advertising. The data were gathered into a large, heavy volume which Mr. McKinney took back to Michigan on the next train.
The manager of Nichols-Shepard could not conceal his surprise and excitement. “We have been trying for years to get this information,” he said, “but without success. How much will you sell it for?” Mr. McKinney replied: “It is not for sale. We are not in the book business. We are in the advertising business. If you are not our client, this report is not for sale at any price. But if you are our client, it is yours for the asking.” There was no resisting this constructive kind of salesmanship. The Nichols-Shepard advertising contract, which for that year was for $18,000, was immediately telegraphed to N.W. Ayer in Philadelphia.