Foote, Cone & Belding Worldwide
Address:
100 West 33rd Street
New York, New York 10001
U.S.A.
Telephone: (212) 885-3000
Fax: (212) 885-2803
http://www.fcb.com
Statistics:
Wholly Owned Subsidiary of The Interpublic Group of Companies Inc.
Incorporated:1942
Employees:6,000
Sales:$452 million (2003)
NAIC:54181 Advertising Agencies
Company Perspectives:
Every person at Foote Cone & Belding--at every level, across every discipline and in every office--is in the business of creating ideas that will benefit our clients. Ideas that both sell today and build brand value. This is our point of difference. It is at the heart of everything we do, and, frankly, we believe we do this better than any other agency. It is why clients hire us. It is the standard we set for ourselves. It is how we measure our results.
Key Dates:
1873: The Lord & Thomas agency is founded.
1942: Foote, Cone & Belding Company is formed after Albert Lasker's retirement.
1948: Foote leaves the firm.
1957: Belding retires from the agency.
1962: Foote, Cone & Belding goes public.
1994: Foote, Cone & Belding becomes True North Communications.
2001: The Interpublic Group of Companies buys True North Communications and restores the Foote, Cone & Belding name.
Company History:
With a history dating back to 1873, Foote, Cone & Belding Worldwide is one of the oldest providers of advertising and marketing services. It is part of the Interpublic Group of Companies, Inc., and has a network of 197 offices in 109 countries around the globe. Through the years Foote, Cone & Belding has created successful advertising campaigns for GlaxoSmithKline, Kraft Foods, J.P. Morgan Chase & Co. and Hilton.
Early History
The history of Foote, Cone & Belding begins in 1873 with the founding of the Lord & Thomas advertising agency and the career of Albert D. Lasker. It was Lasker who, along with John E. Kennedy and Claude Hopkins, revolutionized the advertising industry and brought it into the 20th century. Lasker built his agency until it became one of the largest and most successful in the world and is said to have ruled over it in an almost dictatorial manner. Furthermore, he did not take his own success lightly, nor did he wish to conceal it. In the words of the noted advertising man David Ogilvy, Albert Lasker "made more money and spent more money than anyone in the history of the business."
In the 1930s and 1940s the most important accounts at Lord & Thomas were the American Tobacco Company and the Pepsodent division of Palmolive. The former was owned and operated by the controversial George Washington Hill; its principal product, Lucky Strike cigarettes, provided nearly one-fourth of Lord & Thomas' business. Pepsodent was at the time the largest-selling toothpaste on the market, and was particularly important to Lasker who was a large shareholder in the company.
During the Depression consumer product companies and advertising agencies alike were often faced with the possibility of failure. Most corporations that survived did so because they were large enough to weather years of economic difficulty and were run by powerful, energetic men with large personal stakes in their respective companies. Albert Lasker was used to doing business with such men; he liked the challenge of bargaining with strong personalities. When the business world began to change in the early 1940s, his interest in advertising began to diminish. Fairfax Cone wrote of Lasker's relationships with his clients, that they "had been cemented at the top. When their structure began to change, when he became a supplier instead of a valued consultant, Mr. Lasker lost interest in the business. He saw that the day of the individual owner or the lasting partnership of two or three men in any large undertaking was gone. Business had become too big for that."
Lasker called together his three regional heads--Foote of New York, Cone of Chicago, and Belding of Los Angeles--to tell them that he was retiring from advertising in order to pursue other interests and that, as of December 31, 1942, Lord & Thomas would close its offices permanently. To say the least, the three men were surprised by the news. Originally, Lasker thought he could divide Lord & Thomas' business by apportioning accounts to each of the three according to geographical location. This plan meant, in effect, that the agency would be divided into three separate firms. Then Lasker changed his mind and decided it best to keep the company intact with each man directing a regional headquarters: Foote, Cone & Belding Company was born. Lasker made Foote president, Belding chairman of the board, and Cone chairman of the executive committee.
Foote, Cone and Belding did not purchase Lord & Thomas. It was willed to them by Albert Lasker. The sole financial condition was that each man raise $32,000 as security for a $100,000 loan Lasker obtained for them through a Chicago investment bank. The only other stipulation was that the name of Lord & Thomas be retired along with Mr. Lasker.
A New Beginning
Since the change of ownership was sudden and unexpected, many people inside and outside the advertising industry were shocked. Many industry analysts did not believe that the new firm was viable. Its harshest critics expected FCB to lose most or all of its clients and fall from the ranks of the major agencies. Foote, Cone & Belding was not taken seriously, particularly by the media. A January 4, 1943, Time magazine article commented that, "To the advertising world it was almost as if Tiffany had announced that from now on it would be known as Jones, Smith & Johnson."
The critics, however, focused primarily on the name change and not the more salient facts. The new agency was able to retain nearly all of the old Lord & Thomas customers, the most important of which was George W. Hill's American Tobacco account. Moreover, it won a number of new lucrative accounts, including Toni home hair permanent products, Hiram Walker Whiskey, and Marshall Field and Company, not to mention ad contracts for a few Samuel Goldwyn movies.
Yet the question still remained--who were Foote, Cone and Belding? They were barely known to each other, much less to those outside the company itself.
Emerson Foote was born in Alabama and raised in California. His college career consisted of one semester at the University of California, after which he sought work in the advertising business. He tried on various occasions to obtain a job with the research department of Lord & Thomas' San Francisco office in the early 1930's, but without success. The Depression was under way and virtually no one was hiring. So in 1934 Foote opened up his own firm, Yeomans & Foote, only to find the competition within the industry too intense for the small company to survive. A short time later, Foote's work came to the attention of the J. Stirling Getchell agency which offered him a job developing an ad campaign for a new automobile manufacturer called Chrysler. Foote accepted the job, but when Getchell died in 1938 the firm was dissolved and Foote was once again seeking employment. He applied to Lord & Thomas, and this time he was hired--as an assistant account executive for Lucky Strike cigarettes. In this capacity he met George W. Hill. Foote impressed Hill and was subsequently put in charge of the entire American Tobacco Company account. Simultaneously he was promoted to the position of general manager of Lord & Thomas in New York, a position he still held at the time of Lasker's retirement.
Don Belding, the oldest of the three men and director of the Los Angeles office, was unique for an advertising man in that he avoided being transferred from city to city doing agency business. He spent all of his career in the western United States. A native of Oregon, Belding had been an artillery man in World War I, a Western Union telegraph operator, and the publisher of a small newspaper before he entered advertising. After spending a year in the hospital for a war related illness, he enrolled in a veterans' training program. Part of his training included a government paid internship at Lord & Thomas of San Francisco. Years later Lasker opened an office in Los Angeles which Belding took charge of in 1938. There he used his experience in copywriting and accounts management to provide services for clients such as Lockheed, Sunkist, Purex, and Union Oil.
Fairfax Cone, like his two partners, spent his early life in California. He attended the University of California at Berkeley and worked for the San Francisco Examiner in the ad department. He had taken up drawing as a child and had become quite accomplished. He was colorblind, however, and later realized that because of this difficulty any advancement as an artist was impossible. He turned to copywriting and obtained work at a number of small San Francisco advertising agencies. When he went to work for Lord & Thomas, Cone began writing campaigns for the Southern Pacific Railroad and Dollar Lines ocean travel, and also became proficient at selling vacations as consumer products.
In 1934 Cone temporarily left Lord & Thomas to work for J. Stirling Getchell on the Plymouth and De Soto automobile accounts. During this period, Cone became afflicted with a seriously debilitating illness. What was at first thought to be a severe case of jaundice, turned out to be hypoglycemia. The correct diagnosis and proper treatment were seven years in coming, and during the interim Cone was forced to live half his life in bed.
Cone left Getchell and returned to Lord & Thomas in 1936 as manager of the agency's San Francisco office. He remained on the West Coast until 1941 when Albert Lasker asked him to move to New York to help out with a new campaign for Lucky Strikes. His stay in New York was brief. He no sooner became acquainted with George Hill than he was transferred to Chicago to work on the troubled Pepsodent account. A year and a half later, Cone found himself one-third owner of one of the largest advertising agencies in the world.
By 1946 the new firm of Foote, Cone & Belding had answered its critics and had proven itself the suitable heir of Lord & Thomas. Then publication of a book that became a best-seller threw the agency into turmoil and a three year period of readjustment. The Hucksters, by a former FCB copywriter named Frederic Wakeman, was supposedly a fictional account of the less reputable side of the advertising business. The two main characters of the book included an overbearing, unscrupulous owner of a large corporation and an advertising account executive who wasn't reluctant to lie in order to sell his client's merchandise. It was generally believed within the industry that the first character was patterned after George W. Hill and the second after Emerson Foote. The book caused a stir of controversy and was soon made into a major motion picture.
Because of the unflattering portrayal of the George Hill character, many people in the industry felt Hill would take the American Tobacco account away from Foote, Cone & Belding. That did not happen. Instead, he awarded the company with a new five million dollar account for Pall Mall, American Tobacco's second best-selling cigarette.
In 1948 George Hill died. Leadership of his company passed to Vincent Riggio, a man with whom Emerson Foote felt he could not do business. On Foote's recommendation the American Tobacco account, fully one-fourth of the agency's business, was terminated by the agency. Emerson Foote, suffering from manic depression and thinking that he may have given up too much in relinquishing the account, had a nervous breakdown. He subsequently sold his stock at below market value and left the firm.
Triumphs and Disappointments in the 1950s-60s
The year 1948 marked something of a watershed for Foote, Cone & Belding. The agency was successful in obtaining a number of what were to become long-standing accounts. Foote, Cone & Belding began handling the advertising for, among others, Latex elastic products and Dial deodorant soap. It was also instrumental in putting the Hallmark Playhouse, precursor to the Hallmark Hall of Fame, on television.
Throughout the 1950s Foote, Cone & Belding continued to gain new clients and expand the services rendered to those already on its roster, particularly in the areas of radio and television. The firm had long employed Bob Hope as spokesman for Pepsodent and Arthur Godfrey for Toni and Frigidaire; now it had Red Skelton and George Gobel selling Johnson's Wax and Dial Soap respectively. At this time, Foote, Cone & Belding also created ad campaigns for Paper-Mate pens, Clairol hair coloring, and Kool-Aid.
The news was not all good, however. In 1951 the company lost the Pepsodent account to McCann-Erickson, leaving FCB without the two accounts (Pepsodent and American Tobacco) that had been the bedrock of Lord & Thomas' business. Pepsodent later returned to the firm, but with a much weaker market share. Then, in 1955, General Motors withdrew the Frigidaire account from Foote, Cone & Belding and took its business elsewhere.
The withdrawal of the Frigidaire account coincided with what at first promised to be the brightest chapter in the Foote, Cone & Belding story, but which turned out to be the darkest. In August of 1955, J.C. Doyle of the Ford Motor Company asked Fairfax Cone if he would be interested in doing the advertising for a new Ford automobile. Cone accepted the invitation and FCB, along with 10 other agencies, entered into the most extensive bidding competition ever seen in the ad industry. After 22 weeks and countless campaign presentations, Foote, Cone & Belding was finally awarded the account. The firm was instructed to find a suitable name for the new "E" (Experimental) car; after a month of brainstorming the agency had created the "Edsel."
The failure of the Edsel as an automobile is well-known; it cost the Ford Company close to $350 million. What is not recognized very often is that the Edsel was an advertising failure as well. The fiasco proved a cardinal rule of advertising--an advertisement, by itself, can aid or inhibit the sales of a good product, but it cannot, no matter how excellent the art and copy, save an inferior product. The Edsel was a product so out of step with prevailing market conditions that it was a losing venture from the beginning. In the words of Fairfax Cone, "The trouble with the Edsel was almost everything." Cone and company worked diligently through the years of 1956, 1957, and 1958 to make the Edsel appealing to the American consumer, but without success. In the winter of 1959 the last Edsel crossed the assembly line.
The agency's resilience was soon apparent; the Edsel did not destroy Foote, Cone & Belding, nor even hinder its growth. The company acquired new accounts for Zenith, Dole pineapple, Contac, Fritos, True cigarettes, Sunbeam, People's Gas, International Harvester, Sara Lee, Monsanto, Ralston-Purina, Merrill Lynch, and Falstaff beer.
In 1957 Don Belding retired from the firm at the age of 60, and the agency came increasingly under the direction of Fairfax Cone and company chairman Robert Carney. Carney, a shrewd lawyer and businessman, urged the agency to go public, which it did in 1962. By 1965 the company's shares were being traded on the New York Stock Exchange.
During the 1960s the agency made strides in cementing its relationships with the major clients on its roster and in enhancing their images. Its work for Kimberly-Clark, a client of Lord & Thomas since 1923, is particularly notable. Two Kimberly-Clark products, Kleenex and Kotex, have become so well known that the names themselves are now household words used to define an entire line of products. With FCB's research and marketing help, Kimberly-Clark emerged as one of the leaders in the manufacture of paper towels, napkins, paper uniforms and paper dresses. Similar work by the company was done for Armour/Dial and S.C. Johnson & Son.
Nowhere, though, was Foote, Cone & Belding advertising more visible and prolific than on television. Fairfax Cone, who had long considered advertising and television mismatched, nonetheless brought the firm to the forefront of this area of the industry. By 1969 the company was responsible for $110 million worth of advertising time on television. Products advertised by Foote, Cone & Belding were the sponsors of such shows as Rowan and Martin's Laugh-In, The Dean Martin Show, The Jackie Gleason Show, The Ed Sullivan Show, The Smothers Brothers Comedy Hour, and Ironside.
The Business of Advertising in the 1970s
The 1970s marked a shift in emphasis for Foote, Cone & Belding. The agency began to focus less on advertising as an art and more on advertising as a business. Following the trend started by the other large agencies, Foote, Cone & Belding actively sought to acquire subsidiaries and build a more comprehensive international network of company offices. In January of 1972 it purchased the predominantly female-operated Hall & Levine agency (which it later sold in 1978), in 1973 it bought Whalstrom & Company, in 1975 Honig-Copper & Harrington, and in 1978 merged with Carl Byoir & Associates. In the international arena, Impact/FCB was established in Belgium and France, Jessurun/Bauduin-FCB in Amersterdam, Lindsay Smithers-FCB in Johannesburg and Capetown, and FCB/SPASM in Sydney and Melbourne.
Expansion on this scale, however, was costly, and fiscal 1974 was marred by a $1,410,000 loss the agency suffered as a result of the failure of its FCB Cablevision venture. Any agency operating in the international market is prone to the trials and tribulations of currency fluctuations; Foote, Cone & Belding was no exception.
In June 1977 Fairfax Cone died. With his passing, the firm and the advertising industry as a whole lost one of its most distinguished men. He had been one of advertising's staunchest defenders and most articulate critics. Foote, Cone & Belding had grown large and profitable under his tutelage. At the time of his death, it was an international agency with resources and services rivaling those of the biggest worldwide firms. Furthermore, Foote, Cone & Belding was able to achieve this eminence without resorting to what Cone called dishonest, tasteless, and gimmick-ridden advertising.
The advertising industry during the 1970s was marked by more than just business expansion. Most of the major agencies, FCB included, went through a period of creative malaise. The difficulties involved in the management of what was now a sprawling bureaucracy, and maintaining a balance between the creative and financial operations of the business, contributed to this problem.
Growth in the 1980s
In 1981 Foote, Cone & Belding emerged from its slump; 10 of its entries were ranked in Advertising Age's 100 Best Commercials, more than that of any other agency. This accomplishment revealed a renewed commitment to creativity. The approach did not always work (FCB lost Hallmark in 1981), but it revitalized Foote, Cone & Belding's image, and between 1982 and 1984 the agency won a record number of new accounts. The year 1984 was especially lucrative because Levi Strauss and a number of other major clients substantially increased their advertising budgets to meet the demand created by the Los Angeles Olympics.
However, FCB encountered financial difficulties. The firm went on a subsidiary buying spree between 1981 and 1984, amounting to over $23 million in purchases. The fiscal strain of this expansion was felt in 1985 and made even worse by the fact that many clients, preparing for a more sluggish economy and a drop in sales following the Olympics, reduced expenditures for advertisements. The result of these developments was that despite the 1985 increase in total revenues (including subsidiaries), the agency's net income dropped 14 percent, driving its share price down.
Present chairman and chief executive officer of Foote, Cone & Belding, Norman W. Brown, fought to keep the firm from becoming a takeover target. With the aid of outside consultants, the company implemented a new budgetary system that included profit-planning models for each office. The strategy was that the decision-making process within management would be less time consuming and more efficient and that financial planning would be more farsighted.
The 1990s Brings Change
Nevertheless, Foote, Cone & Belding's financial difficulties were not over. The economy in the 1990s was marked by a recession that took its toll on the advertising industry. Along with staffing and expenditure cuts, the company and its peers faced strained relationships with clients. During this era of budget reductions, there was a greater push to secure as many clients as possible and Foote, Cone & Belding desperately needed an edge over other firms. As part of its strategy, the company adopted a holding company structure under the name of True North Communications in 1994. This change placed True North in a position to own more than one advertising agency. In an attempt to diversify, the company restructured itself with the creation of three subsidiaries, TN Media, TN Technologies and TN Services.
Unfortunately, True North Communications proved to need much more than a name change. Although it had 190 offices across the globe and billings of more than $7 billion, it continued to lack a competitive edge over its peers. To further complicate the situation, its endeavor to merge with Publicis Communications of France failed in 1996. Its joint venture in Europe also fell apart one year later as Publicis commenced an ill-fated hostile takeover of True North. At the same time, Foote Cone's relationship with clients began to deteriorate further. The company lost its accounts with Citicorp and Mazda Motor--the latter terminated its contract due to the True North acquisition of Bozell, Jacobs, Kenyon & Eckhardt, which provided advertising for Chrysler. In an attempt to shore up revenues, Foote Cone and Bozell considered joining efforts in order to attract global corporate clients.
Despite heartened efforts to succeed in the global market, True North Communications put itself up for sale in 2001. The company had lost the $1.5 billion DaimlerChrysler account the previous year, and believed a sale was its best option. The Interpublic Group of Companies came to its rescue and completed its $2.1 billion acquisition in 2001. Interpublic immediately restored the Foote, Cone & Belding name, hoping that the historical moniker would attract new customers.
Indeed, under the charismatic leadership of CEO Brendan Ryan the company won many new clients such as Samsung, Boeing and Taco Bell. Interpublic and Foote, Cone & Belding however, continued to encounter many difficulties. Although Interpublic had become quite large, it did not have as many global accounts as other agencies of its size. The reorganization had also brought layoffs in the New York office. FCB lost the AT&T Wireless business worth $400 million. In addition, some of Foote, Cone & Belding's clients conflicted with those brought by Interpublic, and there were clients that complained of account problems. To make matters worse, Interpublic's stock was faltering, dropping by fifty-five percent between 2001 and 2004. Nevertheless, Foote, Cone & Belding Worldwide remained poised in the midst of these difficulties. Its history, dynamic leadership, and list of impressive clients would no doubt allow it to prevail for years to come.
Principal Competitors: Arnold Worldwide Partners; Saatchi & Saatchi; TBWA Worldwide Inc.
Further Reading:
- Beatty, Sally Goll, "Foote Cone Gets 3Com Account Following a String of Setbacks," Wall Street Journal, October 27, 1997, p. 1.
- ------, "True North, in Shift of Direction, Says Pact With Publicis is Over," Wall Street Journal, March 1, 1996, p. B5.
- "Business Brief--Interpublic Group of Cos.: Foote Cone & Belding Cuts Include up to 80 Layoffs," Wall Street Journal, September 10, 2001, p. A4.
- Cone, Fairfax M., With All Its Faults: A Candid Account of 40 Years in Advertising, Boston: Little Brown, 1969.
- Goldman, Kevin, "Foote Cone & Belding is Aiming to Make a New Name for Itself," Wall Street Journal, December 12, 1994, p. B7.
- Gunther, John, Taken at the Flood: The Story of Albert D. Lasker, New York: Harper, 1960.
- Johnson, Bradley, "Did True North Pick Best Partner in IPG?," Advertising Age, April 5, 2004, p. 6.
- Khermouch, Gerry, "The Shock Waves Rocking Interpublic Scandal has Scared Off Clients and Endangered its Grand Strategy," Business Week, December 2, 2002, p. 54.
- Kranhold, Kathryn, "True North to Discuss Scenarios for Merger of Foote Cone, Bozell," Wall Street Journal, September 7, 1999, p. B10.
- Lublin, Joann S., "Agencies Foresee Unkinder, Rougher 1991," Wall Street Journal, December 27, 1990, p. B2.
- MacArthur, Kate, and Tobi Elkin, "So, What's in a Name? History," Advertising Age, July 9, 2001, p. 1.
- Melcher, Richard A., and Gail Edmunson, "A Marriage Made in Hell; How the Foote Cone-Publicis Alliance Hit the Rocks," Business Week, December 22, 1997, p. 40.
- O'Connell, Vanessa, and Nikhil Deogun, "True North is in Talks to Sell Itself to Expand," Wall Street Journal, January 29, 2001, p. B9.
- Sampey, Kathleen, "Ryan's Hope: The Worst is Over," Adweek, August 12, 2002, p. 5.
- Vranica, Suzanne, "FCB Chief Sets Creativity Improvement as Top Priority," Wall Street Journal, April 6, 2001, p. B6.
Source: International Directory of Company Histories, Vol. 66. St. James Press, 2004.
