Chapter Seventeen

Retrenching and Reshaping

ON OCTOBER 12, 1927, Lasker’s eldest child, Mary, married Gerhard Foreman, the son of Oscar G. Foreman, a director of Chicago’s Foreman National Bank. It seemed an eminently suitable match: Mary and Gerhard were in love, and two powerful Chicago Jewish families found themselves united.

The couple was married at the Laskers’ Glencoe home, with only members of the two families present.¹ The mansion was lavishly decorated for the occasion, and the young couple was thrilled to learn that it was to be their wedding present: Albert and Flora would live full-time at Mill Road Farm.

Gerhard was named for his grandfather, who had emigrated to the United States from Darmstadt, Germany, in the late 1850s and founded the Foreman Bank in 1862.² The bank in the late 1920s was run by Gerhard’s father, Oscar, who was chairman of the board, along with a third-generation Foreman, Harold, who served as president. With all of these close family ties, Gerhard seemed assured of a bright future with the bank. Lasker was pleased to see his daughter married to a man with such strong prospects; in addition, Lasker biographer John Gunther reports that Lasker was “enormously fond” of Gerhard and admired his judgment.³

As Lasker looked back on the relationship a decade later, he recalled that the young couple was very much in love when they got married, but over the next several years, fissures appeared. There were “a good many private unhappinesses,” he said, pointing to the couple’s reluctance or inability to have children.⁴

Albert Lasker largely sidestepped the market crash of 1929, thanks to savvy investment decisions by his friend and neighbor, rental-car mogul John Hertz. Lasker and Hertz had a joint stock market account that was managed by a Chicago investment adviser.⁵ Both men were authorized to make changes to the account, and Hertz exercised that authority during the summer of 1929. Early one morning, Hertz called Lasker and told him that he was going to “sell everything,” despite the surging market.⁶ Lasker protested, but finally accepted his friend’s judgment. Several months later, the stock market collapsed.

Lasker’s stock in several privately held companies, including Kimberly-Clark, was immune to the wild swings of the public markets and generated a substantial dividend stream. But he kept much of his non–real estate wealth in the cash accounts of Lord & Thomas, so that business had to be managed carefully.

Managing the firm in the Depression took some counterintuitive thinking. Many of the agency’s largest clients suffered, and Lasker urged them to cut their advertising budgets—despite public statements by Lord & Thomas president Ames Brown in early 1929 predicting a good year for advertising.⁷ Early on, for example, Lasker told American Tobacco’s George Washington Hill that he should drastically reduce his advertising budget. The domineering Hill initially responded by threatening to raise his advertising budget to $25 million, but Lasker coolly replied, “If you [do], you are not going to spend it through me. I won’t place it for you.”

Lasker won this topsy-turvy argument; the following year, he talked Hill down again, to $10 million, and the following year to $8 million. Then Lasker called other clients, told them American Tobacco had agreed to cut its advertising budget by 33 percent, and advised them to do the same. “Never mind where the billing of Lord & Thomas falls, never mind anything about that,” he told them. “I instinctively believe that we are in for worse times before they are better, and I propose that any clients that are served by me shall survive.”

Meanwhile, Lasker did his best to help friends. Several of them lost huge sums on their margin accounts, and Lasker gave them loans to keep them afloat, most of which were never repaid. Lasker grumbled that he was helping his friends do the “very thing that I wouldn’t do myself”—i.e., buying on margin and playing a highly volatile market that he had abandoned—and later estimated that he had lost somewhere between $5 million and $7 million in bad loans to friends.⁸

By 1931, the Foreman Bank—which in December 1929 merged with the State Bank of Chicago, and was now the Foreman-State Bank—was on the brink of becoming yet another casualty of the Great Depression. The bank had overextended itself in speculative real estate loans, which quickly went bad in 1929 and 1930 as borrowers’ negative leverage caught up with them. Throughout the early months of 1931, the bank became increasingly unstable and by early June the crisis was coming to a head. On Thursday, June 4, whispers of a run on the Foreman-State Bank were in the air in Chicago’s Loop district and representatives of the city’s leading banks gathered in great secrecy at the home of Melvin Traylor, president of the First National Bank, to head off a crisis.⁹ Traylor’s solution was simple: a takeover of Foreman by First National.

Foreman’s directors, who included Lasker, Hertz, and William Wrigley, were dismayed by Traylor’s proposal, which would guarantee the bank’s deposits but cost the stockholders dearly. But by Saturday morning, the bank’s liquidity was in peril, and Lasker, Hertz, and Wrigley were forced to put up enough money to keep the bank operating through the day.

By this time, the crisis had attracted national attention. Recreating a climactic meeting in the second week of June, Time magazine reported that “newspapermen, lolling in the marble lobby of the Foreman Building, grew impatient for definite news of what was taking place on the [thirty-eighth] floor,” where members of the Federal Reserve were huddling with the Foreman bank directors and representatives of the other leading Chicago banks.¹⁰

What took place on that thirty-eighth floor, according to Lasker, was high drama, in which he commanded center stage. “The room was full of the heads of banks and clearing houses on a Sunday afternoon,” Lasker recalled, “and I made a talk for about fifteen minutes that made financial history in Chicago; they are never going to forget it.”¹¹ Melvin Traylor demanded that the Foreman directors pay First National to take over the struggling Foreman. Lasker responded that they would never sell Foreman “down the river,” and ended by exclaiming to Traylor that he’d never before seen “Shylock performed by a Christian.” (In the immediate aftermath, Lasker denied making the inflammatory comment; later, he admitted that he had.¹²)

But First National’s was the only offer on the table, and in the end, Foreman was indeed sold “down the river,” with its directors, Lasker included, compelled to post a $2.6 million indemnity fee. The bank’s individual depositors were thus saved, but the directors—as well as the entire Foreman family—lost huge sums on the transaction, and six smaller banks associated with Foreman were forced to close their doors. This led to sixteen additional bank closings in Chicago neighborhoods over the next two days. The Chicago State Bank Examiners rushed to reassure jittery Chicagoans that the merger had “eliminated the only sore spot in the Chicago banking situation,” and that additional closings were not imminent.¹³

Lasker, Hertz, and two other non-family-member directors of the bank were named directors of First National a month later.¹⁴ But this episode—along with the unhappy experience of lending money to his stock market-playing friends—sparked a new kind of cynicism in Lasker. “Most of the unhappiness I have had in life,” he observed several years later, “has been from people I have helped.”¹⁵ Increasingly, he felt detached from business, which he saw as having lost its moorings, with no clear course back to a safe harbor.

Mary and Gerhard’s marriage survived the crisis of the Foreman bank failure, but within another couple of years, they had arrived at a crisis of their own, and Mary—an energetic and highly intelligent young woman—needed something to take her mind off her marital difficulties. Flora decided that something should be a job at Lord & Thomas, and she demanded that Albert hire their daughter.

Even though he had entertained ideas a decade earlier of setting Mary up in the newspaper business—perhaps even joining her there—his reaction to this proposal was an emphatic no. “Now, look here,” he told Flora, “I have given you and Mary and the children everything I have in the world. I have shared it with you. It has been yours first. But the one thing I have kept for myself is my career. Now don’t you start on my career; don’t you try and bring nepotism in my career. It won’t go.”¹⁶

Lasker thought this was only a whim on Mary’s part and didn’t want to indulge it. It was not that she couldn’t do the work, he felt, but that she wouldn’t keep it up once she started. Flora believed otherwise—and she told Albert that continually for the following six months. “She’d come into my room every night,” Lasker recalled, “and start over again. She was a very determined woman.”

Albert approached business manager David Noyes and asked him to get him out of a tight spot by meeting with Mary. “I am going to tell my wife,” he said, “that I am going to send my daughter in. Of course it is all nonsense, and you write me a long memorandum why you can’t do it. I will take it home and show my wife; I know she won’t upset my organization.”

After several days, Albert had not yet received the memo from Noyes, so he tracked down his business manager to see what had happened. “Mr. Lasker,” a sheepish Noyes said, “I just didn’t have the courage to tell you that I hired her. I meant to give her ten minutes, but she stayed four hours, and she is the best prospect we ever had. She has more advertising in her than any human being.”

With that, Mary Lasker was on the payroll, at the modest salary of thirty dollars a week. Albert decided that the best tactic was to keep his distance from the firm’s newest employee. He did, however, leave a note on her desk on her first day of work (October 29, 1935):

My darling Mary,

Welcome to Lord & Thomas. I hope we have a long business association together—if we do, we will both get much joy from it.

Both as father and employer I give you this advice—try to learn from everyone (high and low), try to be of service to every one (high and low). He finally leads who first learns to serve. And remember—we spend our lives learning. Above all, be yourself—your best self. Always think of the other fellow’s viewpoint and try to get him to think of yours. Learn to walk before you run. Believe in yourself—and believing, strive to learn every day and grow creatively every minute so that you will justify your belief.

All my love,

Father¹⁷

Lasker later concluded that Noyes had been right about Mary’s advertising talent. “It’s the darnedest story,” Lasker told his ghostwriter in 1938. “A little over two years, and I have never known anybody who has been in the business ten years and been [as] successful, and who has gotten as far as she has in proved performance. She is the sensation of the line in Chicago.”¹⁸

As good as Mary was, however, her talent could not salvage her career at Lord & Thomas. Intermittent bouts with alcoholism impaired her performance, as did the bluntness she inherited from her father. The end came in 1941, when Mary fought with one of the agency’s managers, and Albert—fearing a charge of favoritism—felt he had to side with the manager. He fired Mary.¹⁹

Edward, meanwhile, had also launched what appeared to be a promising career at Lord & Thomas. After graduating from Yale, Edward decided to go to work for the family firm because he couldn’t come up with a more interesting career.²⁰ His father believed that before trying to advertise products, Edward needed to learn more about why people bought them, and secured a job for his son in England as a salesman for J. Wix & Sons, a subsidiary of American Tobacco. After several years abroad, Edward returned to work in the New York office, where, upon his request (and with the intercession of American Tobacco’s George Washington Hill), he became a mainstay of a growing new department at the agency: radio advertising.²¹

In the late 1920s, Pepsodent toothpaste—which had been on the market for a little more than a decade—was losing ground to its increasingly formidable competition. Its owners, including Albert Lasker, were far from happy about this.

Peposdent had been founded in 1916 by Douglas Smith, the Chicago-based entrepreneur who had already amassed a fortune from the sale of typewriters and patent medicines around the turn of the century. When his cash-cow, Liquozone, was exposed as a fraud, Smith scrambled to find other products to bring to the market.²²

One of these new products was Pepsodent, which according to Smith was brought to him by a chemist from Lincoln, Nebraska, who told him the formula would make a good toothpaste. The product even came with its own “reason-why” argument: it removes film on teeth.²³

But the company had a poor relationship with both retailers and wholesalers, and sales were almost nonexistent. In fact, toothpaste sales in general were quite low, mainly because very few people practiced—or even knew about—oral hygiene. Although the first toothbrush was patented in the United States in 1857, only a small minority of the population owned a toothbrush until after World War I.

When Smith acquired the toothpaste, therefore, he faced an uphill battle. Hopkins, who had so successfully marketed Liquozone for Smith years earlier, was now a fixture at Lord & Thomas, so Smith decided to hire the agency to see what Hopkins could come up with. Initially, Hopkins tried to turn the account down, saying that the product was overpriced and that (as he later wrote) he did not “see a way to educate the laity in technical tooth-paste theories.”²⁴ Under pressure from Smith, however, Lord & Thomas took the account.

For the first several years of the relationship, the agency’s efforts on behalf of Pepsodent were limited, reflecting Smith’s modest ad budget. Hopkins focused on the fact that Pepsodent contained pepsin, which allegedly digested the mucin plaques that were the “source of most tooth troubles.” Ads placed by Lord & Thomas in dental journals asserted that “the whole object of Pepsodent is to dissolve the film,” through a somewhat mysterious digestive process. As in the case of Liquozone, Hopkins’s claims generated some unwanted attention. As one researcher from Columbia University’s College of Physicians and Surgeons icily put it:

We have found that none of these digestive claims is warranted in any degree. “Pepsodent” is devoid of the digestive power on dental mucin plaques that is commercially ascribed to it. Mucin plaques cannot be digested from teeth by any advertised use of “Pepsodent” . . .

Our results make it evident that “Pepsodent” is put on the market in utter ignorance of the dental and biochemical principles involved, or with intent to mislead the multitude that may usually be deceived by plausible advertisement.²⁵

Hopkins shrugged off the complaints, probably because by 1919—with total sales of around $2,000 per week—Pepsodent was still just bumping along.²⁶ At this point, however, Lasker took a personal interest in the account. In consultation with Hopkins, Lasker made an astounding proposal to Douglas Smith. Smith needed to invest $1 million in advertising, Lasker asserted: an enormous sum for a relatively unknown and untested product. Lasker offered to front the money himself and told Smith that if he was satisfied with the results, he could pay Lasker back with company stock. If Smith wasn’t completely satisfied, no repayment would be necessary.

No entrepreneur could pass up that offer, and Smith soon gave Lord & Thomas the go-ahead. Hopkins, too, demanded and got stock options, and from that point forward, Lasker and Hopkins were deeply involved in the fate of Pepsodent.

Hopkins already understood the challenges that Pepsodent presented. At the time, all toothpastes were all made from sodium bicarbonate and flavoring. So how could Pepsodent differentiate itself from the growing number of competitors?

Hopkins decided to employ a tactic he later called “altruistic advertising,” by which he meant a “test for the good of the parties concerned.”²⁷ In various test cities, Hopkins tried hundreds of “altruistic” ads, and systematically recorded the responses to every ad. Overall, his success was outstanding. In the first test, Pepsodent spent $1,000—and recovered its money before the advertising bills came due. The experiment was repeated in other cities, with similarly successful results. Within a year, Pepsodent had established a demand nationwide, and within four years, a worldwide market.

Part of this success was an accident of timing. The U.S. government began including toothpaste in the ration kits distributed to soldiers on the front lines in World War I, which contributed to a rapidly expanding public awareness of dental hygiene. In addition, nearly 70 percent of all toothpaste advertisements in the early 1920s touted Pepsodent, which certainly built the brand’s momentum.

Later in the decade, however, Pepsodent began to falter again. Competitors like Colgate and Forham’s increased their share of the advertising market—and also their attacks on the frontrunner. Meanwhile, there was another important contributing factor to what turned out to be a steady downward slide for Pepsodent. Research conducted in the late 1920s confirmed that the product was overly abrasive and could damage teeth. (Colgate capitalized on this research in a series of pointed ads.) Pepsodent’s research labs worked furiously to come up with a new formula to reduce abrasiveness; meanwhile, its marketing gurus scrambled to develop a novel marketing angle.

By 1929, Pepsodent sales were down 38 percent from their 1922 peak.²⁸ The brand was in such a dramatic freefall, in fact, that there was talk of taking it off the market. Just in time, Lord & Thomas hit on a new marketing strategy, involving the fast-evolving medium of radio. This successful gambit reversed the company’s fortunes—and in the process, helped change the face of advertising.

By the time Lord & Thomas began to investigate advertising Pepsodent on the air, radio was far from a new medium. The earliest wireless broadcasts were transmitted on Christmas Eve in 1906, and regular radio broadcasts by wireless enthusiasts began the following year.²⁹ But well into the 1920s, radio was still thought of primarily as a means of point-to-point information transmission—for example, communication among ships or between military command centers and the front lines of battle.

After World War I, radio frequencies in the United States were turned over to civilian control, and the number of radio stations mushroomed. Educational institutions, companies, and individuals—all began experimenting with a wide variety of formats, including talk, music, and comedy broadcasts. Over the next decade, as broadcasters learned to use radio to its best effect, programming gradually become more formalized. One especially popular format grew out of a vaudeville model, in which two men would perform a “song and patter” routine that could be shortened or lengthened to fit available broadcast time.

Advertising on radio remained the exception rather than the rule. In part, this was owing to the untested nature of the new medium: nobody, not even the broadcasters, had any idea how many people were listening to their shows. In addition, many radio buffs objected to the idea of bringing advertising “into the home,” arguing that radio was a more intimate medium than newspapers. Somehow, advertising on the radio felt more intrusive than advertising in print and therefore should be discouraged.

The first radio advertisements appeared in 1922, when American Telephone and Telegraph offered to sell airtime in a scheme it labeled “toll broadcasting.” A real estate company took AT&T up on the offer in August of that year, and many other organizations soon followed suit. These fledgling radio ads rarely mentioned the price of a specific good or service; rather, much like public radio sponsors today, they attempted to promote a positive institutional image.

By the late 1920s, broadcasting had begun to resemble today’s industry. National networks (including the National Broadcasting Company, or NBC, formed by David Sarnoff’s Radio Corporation of America [RCA]) were established, and the concepts of programming, advertising support, and market research had taken root. In fact, the first books on radio advertising appeared in 1927, although major advertising agencies generally weren’t deeply involved in radio advertising until the early 1930s.

Some of Lord & Thomas’s earliest experiments with radio came at the behest of the irrepressible George Washington Hill. American Tobacco’s first network show debuted in 1928: the Lucky Strike Radio Hour (which later became the well-known Your Hit Parade). The show consisted of popular songs of the day with minimal orchestration, interspersed with American Tobacco commercials. Hill insisted on the minimal arrangements, believing that they would help listeners relax and leave them more receptive to his commercials.³⁰

As far as Lord & Thomas was concerned, the Lucky Strike Radio Hour was more of a vanity piece than successful advertising. Lord & Thomas’s American Tobacco account history makes no mention of radio campaigns, and Lasker later asserted that radio was not particularly successful for the company.³¹ But Hill was driven first by his own convictions. By mid-1936, he was spending about $350,000 a week on radio advertising, and was thoroughly convinced of radio’s efficacy.³²

By that time, Lasker, too, was a convert, owing largely to the results achieved by another client: Pepsodent.

Pepsodent’s first forays into radio were initiated by a new recruit: Walter Templin, previously head of the Manhattan Electrical Supply Company, an early manufacturer of radio receiving sets. The Manhattan Electrical Supply Company became a significant client of David Sarnoff’s RCA, one of Thomas Logan’s key accounts. Logan had been favorably impressed by Templin’s work, and after his firm’s merger with Lord & Thomas he recruited Templin to join Lord & Thomas in Chicago to work with the Pepsodent Company.

The timing of Templin’s arrival at Lord & Thomas couldn’t have been worse. He had taken a month off after leaving New York to travel in remote areas of Canada, and during his northern wanderings Logan died. By the time Templin arrived in Chicago, therefore, his champion was buried, and Lasker—the man he would now be dealing with at Lord & Thomas—was confined to Mill Road Farm with yet another serious bout of depression. In addition, Kenneth Smith, who had taken over management of Pepsodent from his father, was largely absent from the company at this time; he left to spend the winter in Palm Beach only weeks after Templin arrived and spent much of the following spring in London.

Lacking any explicit instructions from his absent superiors, Templin decided to tackle the product’s biggest failing first. He allocated between $250,000 and $300,000 to reduce the abrasiveness of the toothpaste while still preserving its cleansing ability. He later commented that Lasker’s willingness to tackle this kind of problem—even by proxy—was highly unusual in an advertising executive: “We went way further than most companies would go to eliminate this abrasive factor. There are very few men, I think, besides Lasker engaged in the advertising business [who] would have the courage and support such a program . . . Lasker was enthusiastically in favor, always, of making the product the finest it was possible to make it.”³³

Second, Templin—whose background in radio now came into play—pushed both Pepsodent and Lord & Thomas to explore this new advertising medium. “Lasker was cold to the idea of a radio program for Pepsodent,” Templin recalled, “because the few clients of his that had tried a radio program up to that time had not, so he said, been able to trace any increase in sales or any benefit from it.” In addition, of course, Lasker was a substantial stockholder in Pepsodent, which probably made him more conservative in the management of the account.

At this time, however, Lasker was largely incapacitated, giving Templin far more leeway. In an effort to convince his new colleagues of the benefits of radio, Templin staged a full-dress “audition” in Chicago, complete with a New York announcer reading Pepsodent ads on the air. The studio audience included copywriters for Pepsodent, Lord & Thomas executives, and NBC executives—a “sophisticated and cold” group, in Templin’s estimation. Much of what they heard that day was not new, having been lifted out of existing print campaigns. But just as Templin anticipated, the old copy acquired new power and resonance when it landed on the ear, rather than the eye. “As I expected,” Templin noted, “when the people in the room for the first time heard, coming over the air, from the loudspeaker these statements about Pepsodent tooth paste, I think every man in that room was impressed tremendously.”

Once the decision to pursue radio advertising had been made, the next challenge was to find the right vehicle. At the time, the most common radio advertising model was for a product to sponsor a specific radio program, broadcast every week (or in some cases, every day) at the same time of day. Templin wanted a program “that would be sufficiently interesting to act as a vehicle to carry this series of announcements.” Pepsodent conducted a series of auditions, but none of the acts felt “sufficiently fresh or different.”

So Templin decided to investigate a local act that had a passionate following in the Chicago area. He first stumbled upon the program while visiting with some friends, who were so engrossed in the broadcast that the whole household stopped what it was doing and gathered around the radio to listen. Even the young children, Templin noted, were allowed to stay up past their bedtimes and listen.

The program, called Amos ’n’ Andy, was the brainchild of Freeman Gosden and Charles Correll, two bricklayers from Peoria whose on-the-job patter so amused their coworkers that they eventually tried out for radio.³⁴ The resulting program, Sam and Henry, aired briefly in St. Louis before moving to the Chicago Tribune’s WGN station in January 1926. Originally a musical production, WGN suggested that the pair add a dramatic element to the show, creating a sort of radio comic strip.³⁵ When the program’s creators later requested a wider distribution of the show, WGN turned them down, and Gosden and Correll left the network. In March 1928, the show found a new home on the Chicago Daily News’s radio station, WMAQ, where it was reinvented as Amos ’n’ Andy.

Amos ’n’ Andy was essentially an extension of the traditional minstrel show format: Gosden and Correll, both white, played two black men who move from Atlanta to Chicago in pursuit of opportunity. The two open a taxi company, encounter a number of Chicago characters (all performed by Gosden and Correll), and later relocate to Harlem. An unusual combination of humor and pathos animated the series, and the show quickly became a hit. As broadcast historian Elizabeth McLeod writes:

Amos ’n’ Andy profoundly influenced the development of dramatic radio. Working alone in a small studio, Correll and Gosden created an intimate, understated acting style that differed sharply from the broad manner of stage actors—a technique requiring careful modulation of the voice, especially in the portrayal of multiple characters. The performers pioneered the technique of varying both the distance and the angle of their approach to the microphone to create the illusion of a group of characters. Listeners could easily imagine that they were actually in the taxicab office, listening in on the conversation of close friends. The result was a uniquely absorbing experience for listeners who in radio’s short history had never heard anything quite like Amos ’n’ Andy.³⁶

With Smith’s backing—and over Lasker’s objections—Templin decided to run a thirteen-week test. The program first aired with Pepsodent’s sponsorship on August 19, 1929, on the NBC Blue network (one of two radio networks then owned by NBC; it later became the American Broadcasting Company) with the mellow-voiced Bill Hay announcing. This choice was inspired: Hay had been associated with the show since the early WMAQ days and was already a familiar voice to Amos ’n’ Andy fans. His calm and dignified sign-off, “Use Pepsodent Toothpaste Twice a Day—See Your Dentist at Least Twice a Year,” and the earnest and intimate quality of his voice as he read the prebroadcast Pepsodent pitch lent an immediate credibility to the product.

Templin insisted that Hay announce only for Amos ’n’ Andy. This led the public to associate him with Pepsodent instead of with the radio station. As Templin describes it, Hay was able to entrench himself “in the minds of the public as a conservative, sincere, honest representative of the Pepsodent Company, not of the NBC.”³⁷

The trial failed: after thirteen weeks, sales weren’t up, and the area’s wholesalers and druggists were grumbling about the huge inventories of Pepsodent they had on hand. But Templin felt in his gut that it was too soon to pull the plug. To test his instinct, he had announcer Hay offer an autographed photograph of Amos ’n’ Andy to anyone who was interested. More than 150,000 replies poured in from all across Chicago—sufficient to silence his skeptical colleagues at Lord & Thomas and convince the naysayers at Pepsodent to underwrite another thirteen-week trial.

This time, the evidence was unambiguous: a marked increase in Pepsodent sales. Now the toothpaste company and its ad agency decided to plunge, taking the show nationwide. The result was a phenomenon. In 1930 and 1931, at the peak of its popularity, Amos ’n’ Andy attracted some 40 million people every evening.³⁸ Phone companies reported that telephone traffic plunged during the show, and movie chains interrupted their features to broadcast the show to patrons in their theaters.³⁹

Most important from the advertiser’s point of view, Pepsodent sales increased 100 percent between 1929 and 1930.⁴⁰ Much of the profit was plowed back into advertising, and by 1932, Pepsodent was the second-largest buyer of radio time in the United States, topped only by George Washington Hill’s American Tobacco.⁴¹

Pepsodent’s resurgence thanks to Amos ’n’ Andy was short-lived. While the radio show remained the most popular broadcast on the air, other shows were quickly gaining a national audience, and other brands were capitalizing on the power of the airwaves. By 1934, Lord & Thomas was being outspent on the radio by both J. Walter Thompson and Chicago’s pioneering Blackett-Sample-Hummert, and many other agencies were rapidly gaining ground.⁴² Blackett-Sample-Hummert was led in part by Lord & Thomas–trained Frank Hummert, a gifted copywriter whom Lasker had hoped would succeed Claude Hopkins, but who had left Lord & Thomas in 1927.⁴³ Hummert and his wife Anne recognized the enormous potential of serial drama on the radio, and created more than one hundred successful radio series for their clients, including Colgate-Palmolive and General Mills.⁴⁴

Lord & Thomas gave Pepsodent a temporary boost in the early 1930s through a new scheme involving radio promotions. The first of these was an offer of lithographed cut-outs of Amos ’n’ Andy characters to listeners who sent in a Pepsodent box top. It was a natural extension of Lord & Thomas’ long-standing advertising practice of offering samples with strings attached; according to Templin, however, this was the first time that the consumer had to send in a box top in order to receive the product.

This proof-of-purchase scheme eventually became standard practice among advertisers, but Lord & Thomas did it first—and only after overcoming NBC’s strong objections. As Templin recalls: “We were the first to include in the specifications that they must send the carton of the product in. The very first. We did that to weed out the professional coupon clippers, as we call them, that never will be customers, that just write in for samples. We had a great battle for it to get the NBC company to permit such an offer to be made on the air.”⁴⁵

Like most of Lord & Thomas’s best clients, Pepsodent had strong creative talent of its own. In 1935, for example, two up-and-coming vice presidents at Pepsodent, Charles Luckman and Stuart Sherman, came up with a second write-in scheme to boost lagging sales. Luckman, then twenty-seven years old, had been trained as an architect at the University of Illinois and had gone into industry because architectural commissions were few and far between in the Depression; Sherman was a Lord & Thomas alumnus who had recently joined Pepsodent. Sitting together one night over scotches at the Drake Hotel, the two men were brainstorming new merchandising concepts when that evening’s Amos ’n’ Andy broadcast came on. Amos’s wife, Ruby, was pregnant at the time in the storyline, and the two characters spent much of the broadcast arguing about the baby’s name.

Both Luckman and Sherman slapped the table at the same moment, shouting “That’s it!”⁴⁶

More or less simultaneously, the two had invented a baby-naming contest. They spent the next few days feverishly working out the details. The contest would run for six weeks, with the company offering a prize of $5,000 to the listener who sent in the winning name. Other prizes totaling $35,000 were also announced. (All entries, of course, had to be accompanied by a Pepsodent box top.)

The success of the contest stunned even its creators. At a meeting with Lasker and Smith on the day following their brainstorm, all four men wrote down their guesses as to the number of entries the contest would generate. The highest guess was Lasker’s, at a million entries—but even this proved low. In only six weeks, Pepsodent received more than 2 million box tops. Sales jumped 21 percent.

Wildly successful though it was, the baby-naming contest could only buy time for Pepsodent. As David Noyes later explained, the product’s fatal flaw was that it offered nothing special to the consumer: “It seemed that no major product improvement was possible since there were no new ingredients available and that everyone in the dentifrice business was using almost the same ingredients in varying proportions. It was made clear again that advertising could only function when it had a theme that held the consumer . . . because of the advantage to the consumer. There was no advantage at that time in Pepsodent.”⁴⁷

The company therefore began a search for a new ingredient that would differentiate Pepsodent from the competition. At a fortuitous juncture, probably some time in 1936, a somewhat shadowy “foreign inventor” showed up in New York City with the “beginning of an answer,” according to Noyes. The inventor, who had come up with a foaming detergent substance, apparently contacted every local toothpaste manufacturer on the same day, informing them of his miraculous discovery. Pepsodent cut a deal with him the following day.

The new detergent, though promising, didn’t work in combination with any of the known polishing agents on the market, so Pepsodent began a search for a product that would be compatible with the detergent. A new agent called sodium alkyl sulphate was eventually identified, and—in combination with the detergent—showed vastly improved cleansing results in lab tests.

The challenge for Lord & Thomas, once again, was how to market this new ingredient. Lasker decided that it needed a name—one that would spark the public’s interest. Ever sensitive to the power of euphony, he told his staff to come up with a name that had five letters: three vowels and two consonants.

From this exercise, the made-up word “irium” was born, and once again, advertising history was made, as “Pepsodent with irium” burned itself into the national consciousness. “We didn’t go to do it on purpose,” Lasker later commented, “but it sounded like irradiated, it sounded like platinum, it sounded like something precious, and it was a success from the [first] second.”⁴⁸

The new name worked the magic that Lasker had been hoping for. The American Dental Association had to add a full-time staff member to answer queries about irium from dentists and teachers. Pepsodent received petitions from drugstores asking them to send a detailed explanation of irium so that the druggists could answer their customers’ questions.⁴⁹ Within a year and a half, Pepsodent had recaptured first place in the toothpaste wars.

Toward the end of 1937, Charles Luckman was summoned into a meeting with Lasker and Noyes. He immediately sensed a strained atmosphere in the room, but before he could ask any questions, Lasker fired one at him: should Lord & Thomas renew the contract with Amos ’n’ Andy, which expired at the end of the year, or find new radio talent?

Luckman, suspecting that this was a test, took his time weighing his response. Finally, he told Lasker that he would recommend canceling. The program, he explained, had reached a saturation point; listeners by that time were either already sold on Pepsodent, or never would be sold. Luckman passed the test: Lasker agreed with him, and had been arguing the same point with Noyes for the past hour.⁵⁰ With that, the eight-year collaboration with Amos ’n’ Andy came to an end, and Lord & Thomas began looking for a new hit for Pepsodent.

The choice initially came down to two personalities: Fred Allen and Milton Berle. But Edward Lasker, now heading up the radio department in the New York office, had another candidate in mind. He became head of the radio department in early 1938—only weeks after Lord & Thomas made the decision to sever ties with Amos ’n’ Andy—and therefore was a new voice in these high-stakes discussions. Screwing up his courage, Edward invited Luckman to come to New York to see an obscure comedian named Bob Hope.

Hope wasn’t a completely unknown quantity at Lord & Thomas; in December 1937, he had done a thirteen-week stint on American Tobacco’s Your Hit Parade. But George Washington Hill had been unimpressed with Hope, and so far, radio audiences seemed to agree with Hill’s assessment.⁵¹ Between 1935 and 1937, Hope had been given guest shots on several radio shows—including the Rudy Vallee show for Fleischmann’s yeast and the Woodbury soap show—but had failed to land his own long-term deal.

Luckman, too, had reservations. Although he was impressed with Hope’s quicksilver wit, he worried that the brash young comedian might be too sophisticated for a national audience. “Does he have the touch of the common man that you see in Andy’s characterization of the Kingfish?” he asked Edward Lasker. “Jack Benny has that touch . . . Fibber McGee and Molly seem to follow the same pattern; so do Edgar Bergen and Charlie McCarthy. Those are three of the top shows on radio.”⁵²

Edward Lasker transmitted these concerns to Hope’s agent. Hope agreed to turn some of his rapier wit on himself, and—thanks to Edward Lasker’s lobbying and Luckman’s backing—Lord & Thomas agreed to give Hope a trial. The first show aired in October 1938. Critics loved it. “That small speck going over the center field fence,” Variety raved, “is the four-bagger Bob Hope whammed out his first time at bat for Pepsodent.”⁵³ Audiences loved him, too: after only two months on the air, Hope’s was the fourth most-listened-to show nationwide.⁵⁴

Hope’s subsequent accomplishments—as a radio, movie, and TV phenomenon and as an entertainer of U.S. troops overseas through the USO—began with that “four-bagger.” In 1943, for example, Pepsodent happily paid $225,000 to send Hope on a wildly successful tour of Army camps.

Lasker’s involvement in Pepsodent ended unhappily after two odd incidents in which he came into conflict with Charles Luckman, who by the late 1930s was gaining more and more authority at the company. Kenneth Smith continued to be a hands-off, frequently absent figure, and although Luckman continued to get his approval on all major decisions, these consultations increasingly became a formality.

The first incident, which occurred soon after Pepsodent began sponsoring the Bob Hope show, grew out of Luckman’s decision to develop a creamier-textured toothpaste. He undertook this experiment on his own initiative, without notifying either Smith or Lasker. Pepsodent’s lab produced three samples of varying creaminess, which Luckman distributed to the company’s secretaries, executives, tax accountants, lawyers, and so on, asking them to choose their favorite. Almost 95 percent preferred the creamiest formula. Luckman then tested the new formula in Fort Worth, Texas, and Madison, Wisconsin, to equally favorable results. An A.C. Nielsen company survey a month after the new formula was introduced came back with results that Arthur Nielsen himself warned might be “too good to be true,” but a second survey two weeks later confirmed the dramatic findings.⁵⁵

Armed with this convincing data, Luckman made a formal presentation to Smith and Lasker, hoping to convince them to adopt the new creamier formula nationwide. According to Luckman, Lasker’s response to the presentation was both unreasonable and unwavering. “Let us get one thing straight,” he told Luckman. “If the figures say one thing, and I say another, I am right. I say no change.”⁵⁶

Lasker’s position—if reported accurately by Luckman—bears some exploration. He was a major stockholder in the company and for almost two decades he had been one of its most important guiding forces. It was about this same juncture that Lasker commented to his ghost autobiographer, “I am Pepsodent!”—an attitude that infuriated the company’s middle managers.⁵⁷ This was one of those occasions. Luckman was incensed—and also convinced that Lasker was dead wrong. He decided to move ahead without his superiors’ approval, risking his job to do what he felt was right for the company.

A month later, Luckman found himself summoned by Lasker, who asked him point-blank whether he had in fact changed the formula without approval. Luckman admitted that he had, and Lasker asked if Kenneth Smith knew.

No, Luckman replied, he hadn’t told Smith anything.

Lasker picked up the telephone and called Smith in Palm Beach. “Well,” he said to Smith, “your young man passed the final test. He didn’t let me put him down, but went ahead and ordered the formula changed. Isn’t that something?”⁵⁸ With that, Smith and Lasker made Luckman vice president and general manager of the company. In 1941, when Smith decided to take another step back from the company, Luckman received another promotion, and was named president and CEO of Pepsodent.

Was this a premeditated test of Luckman’s mettle? Or was an increasingly rigid Lasker simply saving face after realizing that Luckman had been right?

A second incident, involving the buyout of Pepsodent, suggests that Lasker may have harbored resentments about Luckman’s decision to go around him. In 1944, Luckman was approached by Frederick Peyser, a representative of Lever Brothers, which was then one of the three major players in the soap industry (along with Colgate-Palmolive and Procter & Gamble). Lever Brothers wanted to buy Pepsodent, and was offering $66 per share in cash. Luckman, who by then owned 15 percent of the company, was eager to sell, and when he relayed the offer to Smith, Smith assigned him the voting rights for his 60 percent of the company stock. When Luckman met with Lasker, however, the deal fell apart. Lasker refused to sell and seemed personally affronted by the proposition. “Pepsodent’s more my baby than anyone else’s,” he told Luckman. “I am going to tell Kenneth he cannot sell . . . besides, Peyser should have come to me first!”⁵⁹

As the weeks went by, Lasker refused to budge. Luckman considered a lawsuit, though he dreaded airing the matter in court. Finally, he asked Peyser to make one last effort. He suggested that Peyser and the head of Lever Brothers call on Lasker and apologize for not bringing the offer first to him. Then, Luckman suggested, they should lay on the honey, lauding Lasker’s many contributions to the company over the years.

Peyser agreed to try, and the effort was partially successful. Lasker agreed to sell, but he insisted that Lever Brothers pay him a dollar more per share than either Luckman or Smith. What’s more, even though Lever Brothers offered to pay him this difference out of their own pocket, Lasker insisted that the difference come from Luckman’s and Smith’s share of the profits. One last time, Lasker was asserting his dominance at Pepsodent, and Smith and Luckman were forced to accept his terms.

It was not Lasker’s finest hour. According to Luckman, neither he nor Smith ever spoke to their former colleague again.⁶⁰

Armed with strong data from the Pepsodent experience, Lord & Thomas began recommending radio campaigns to many other clients.

In 1934, Lord & Thomas approached International Cellucotton Products Company (ICPC) and proposed a broadcast promotion for Kleenex. The vehicle became an on-air soap opera, The Story of Mary Marlin, that was fifteen minutes long and aired five times a week.

In November 1935, Lord & Thomas ran a Pepsodent-like promotion on Mary Marlin, offering a free packet of Kleenex to listeners who wrote in to the Chicago NBC station to keep the program on the air. The station received 67,300 responses: the largest amount of mail ever received by a station in response to a promotion. In 1936, Lord & Thomas mimicked another successful Pepsodent promotion, offering $10,000 in prizes to listeners who wrote in with naming suggestions for Mary Marlin’s baby, as well as the best way to use Kleenex for babies. Again, the response was tremendous: NBC received 168,207 responses, and Lord & Thomas attributed a 13 percent increase in sales to the promotion.⁶¹

The company saw additional proof of Mary Marlin’s success in the case of Quest deodorant, a product launched in 1935 and advertised solely on the radio show. Within months, a consumer survey showed that the product had captured first place in the powder deodorant field, a fact that Lord & Thomas called “conclusive proof” of the success of the show.⁶²

But radio advertising was expensive, even for large corporations like ICPC. The Mary Marlin show was so costly, in fact, that ICPC suspended advertising in all other media while the show was on the air. The program clearly earned its keep; according to the account history, sales increases due to the program were “sensational.” Nevertheless, The Story of Mary Marlin was dropped in 1937 when Lord & Thomas concluded—as in the case of Amos ’n’ Andy—that the show had reached its saturation point. For its subsequent campaign, Kleenex reverted to print media.

With the exception of David Sarnoff’s RCA and the General Electric subsidiaries that Thomas Logan had brought to the agency, Lord & Thomas never made significant inroads into the highest reaches of corporate America. (New York upstarts BBDO and Young & Rubicam had far more success on those circles.) For example: Lasker had worked his magic for second-tier automakers—companies like Hudson, Mitchell Motors, and Studebaker—but he had never landed the likes of Ford, General Motors, or Chrysler.

This changed in 1935, when General Motors came into the fold. This time, though, Lord & Thomas wouldn’t be advertising cars. Instead, the agency would be advertising refrigerators for General Motors’s Frigidaire subsidiary: the leading player in a $300 million industry that was growing dramatically, thanks to the nationwide expansion of the electrical grid and the lower prices that resulted from increased sales volumes.

Frigidaire wasn’t Lord & Thomas’s first refrigerator account. The short-lived partnership with Thomas Logan brought into the Lord & Thomas fold several General Electric products, including the “Monitor Top” refrigerator, introduced to the public in 1927. Unlike competing models of the day, which concealed their mechanical parts inside their rectangular “boxes,” the Monitor Top featured a hatbox-shaped metal box atop its cooling compartment.⁶³ In the “hatbox” sat the refrigerator’s motor and compressor.

One of GE’s corporate goals was to increase the overall consumption of electricity, so the Monitor Top favored a relatively inefficient air-cooled system over a water-cooled one.⁶⁴ Obviously, Lord & Thomas couldn’t promote the Monitor Top as an efficient appliance—it cost about $2.60 more per year to power than competitive models—so the agency focused on “simplified electrical refrigeration” as its campaign theme, and trumpeted the appliance’s reliability as its key selling point. “Not one cent for repairs,” read the bold headlines in Lord & Thomas’s ads.

On the strength of Lord & Thomas’s campaign, GE’s ungainly new product seized 60 percent of the refrigerator market in 1927. The rest of the industry—Frigidaire, Kelvinator, Westinghouse, and smaller players—howled in protest at the implied warranty inherent in the “not one cent” theme. In response, the powerful home-appliance industry association took a novel tack: it imposed a three-year warranty on all home refrigerators, thereby blunting the impact of GE’s campaign, and effectively relegating the Monitor Top to its previous status as an industry also-ran. Lord & Thomas and GE’s refrigeration unit soon parted company, in part because GE demanded that the agency begin spending a lot of time at individual dealerships—a strategy of which Lasker disapproved.⁶⁵

The real powerhouse in the industry—before and after the anomalous year of 1927—was General Motors’ entry into home refrigeration: the Frigidaire, which typically outsold its nearest competitors by nearly two to one. GM first got into the refrigerator business in 1918, when Will Durant applied his auto company’s mass-production techniques to refrigerators. The Frigidaire Corporation formally became a GM subsidiary in 1926, with an ambitious young executive named Elmer G. Biechler as its president and general manager. That same year, GM built a huge new Frigidaire factory in Moraine City, Ohio, vastly increasing the subsidiary’s output—and necessitating a huge increase in its advertising budget. The combination worked: by 1929, Frigidaire had sold its millionth unit.⁶⁶

In the ensuing half-decade, Frigidaire became nearly synonymous with “refrigerator”—a mixed blessing, in terms of brand awareness. “I heard a woman say, ‘I just bought a General Electric Frigidaire,’” Albert Lasker observed pointedly, underscoring the perils inherent in becoming a generic.⁶⁷

In the summer of 1935, Frigidaire went looking for a new agency.

Frigidaire was blessed with considerable marketing expertise, including a network of talented distributors and dealers across the country. At an early meeting, Frigidaire representatives told Lord & Thomas about an interesting experiment then going on in the Dallas-Forth Worth region. In the previous year—1934—the Electrolux refrigerator had successfully invaded that territory, using claims of low operating costs to grab second place behind Frigidaire. Worried about this interloper, the Fort Worth distributor tested the Electrolux, and discovered that, unlike the Frigidaire, it couldn’t maintain a constant 50-degree temperature in the scorching Texas summer. In collaboration with Dallas Power & Light, the Frigidaire distributor then handed out three hundred thermometers to randomly selected refrigerator owners, and the results were the same: Frigidaire units performed extremely well and competing models came up short—with Electrolux performing worst of all.

With this information in hand, Frigidaire counterattacked. It shipped ten thousand thermometers to Dallas, handing them out to current and prospective customers through its dealer network and also inviting competing dealers to distribute the thermometers. (The power company did its part by running ads supporting regular checks of refrigerator temperatures for safety’s sake.) The result, according to an in-house Lord & Thomas memo, was a near-complete rout:

The effect of this campaign on Electrolux was that they dropped from second place to fifth place in one season, lost the power company as a distributor, lost a number of their active dealers, and were flooded with a warehouse full of repossessed jobs. Frigidaire’s monthly sales average in the area went from 163 before the campaign started to 298 during July and August, 1934, when the thermometers were being given away. Amazingly enough the campaign resulted in a drop in the Frigidaire service cost because the thermometers led owners to defrost oftener and to take better care of their refrigerators.⁶⁸

On the strength of this success, Frigidaire wanted to build its 1936 advertising campaign around the concept of “safety-zone temperatures”: in other words, the ability of its refrigerators to maintain foods at a safe temperature. In addition, the manufacturer wanted to promote its products’ fast-freezing capability, low operating costs, features, and five-year guarantee. These added up to a “five standards of value” story, Frigidaire told Lord & Thomas, and that was what the new ad campaign should push.

But the agency said no. Frigidaire, they contended, was using “product thinking,” rather than talking in “consumer words.” The standards-of-value story line, Lord & Thomas pointed out, would appeal only to those who had already decided to buy a refrigerator; it wouldn’t speak at all to the millions of people who believed that they couldn’t afford electric refrigeration in the first place. Many consumers dreaded the idea of a meter spinning away in some dark corner of the house, racking up electric bills that they might not be able to pay.

No, said Lord & Thomas; what was needed was a “potent battle cry” to win over the prospect who worried that he or she couldn’t afford an electric refrigerator. And that battle cry had to rescue the Frigidaire brand from its increasingly generic limbo.

Albert Lasker took a personal interest in the Frigidaire account. He maintained a close personal relationship with Frigidaire’s president, Elmer Biechler.⁶⁹ He also participated actively in the key internal discussions at Lord & Thomas, focusing on the battle-cry challenge. As he later recalled:

We said, “We have to clothe it with something that makes it seem a new product, so that the name gets a new proportion” . . .

I said, “What is the main working part of it?” And the main working part was a rotary compressor with only two parts—very ingenious—a mechanism which they had had from the beginning. They had never changed it from the first day. I said, “All right, we will name the working part. We will give it a name, and then we will say, ‘Frigidaire with the blah-blah,’ whatever that is. And then if they go to see a “General Electric Frigidaire,” they will ask, ‘Is this the General Electric Frigidaire with the blah-blah?’ And they won’t buy it unless it has the blah-blah . . .

I said, “We can’t explain [the compressor] technically. It must be two words where the imagination of the reader will fasten on the fact that nothing is so economical as this . . . And furthermore, don’t bring me any two words that aren’t alliterative. If you are going to use two words—if you are going to fasten them in the minds of the readers—then they must be alliterative.”⁷⁰

Actually, the rotary compressor was brand-new—replacing the far less effective reciprocating model that Frigidaires had used up to this point—but Lasker got the main point of the story right. The entire Lord & Thomas creative staff was asked to submit names for the efficient new compressor (the blah-blah), and several dozen people came up with close to two thousand names. At a staff meeting, Lasker reviewed the entries, and rejected all of them. At that point, however, a young copywriter named Ted Little retrieved from a trashcan a crumpled piece of paper that included a name that he had decided wasn’t even good enough to submit: meter miser.⁷¹ “That’s it,” Lasker said immediately.

But Lasker wanted to make sure that the phrase worked in the ears of potential consumers. Staffers had “meter miser” printed on five hundred pieces of paper, and then asked pedestrians on the streets of Chicago what the phrase implied to them. An amazing 82 percent said that it had something to do with “saving current.”⁷²

Clearly, meter miser was a winner. Still fighting their client’s stated preferences, the agency renamed the product “Frigidaire with the Meter-Miser” and added the phrase “Made only by General Motors.” Lasker contributed a tagline: cuts current costs to the bone.

The first ads featuring the Meter-Miser appeared on March 6, 1936, and proved a spectacular success. GM had hoped to sell 320,000 units for the 1936 model year; the total came closer to 440,000 units (with those additional 120,000 refrigerators delivering extraordinary profits, thanks to ever-increasing economies of scale). The following year, more than 550,000 Frigidaires were sold.

The growing power of advertising was indisputable: Lord & Thomas had found ways to sell staggering numbers of two distinct kinds of refrigerators, from two different manufacturers, within a decade. The agency, and the old master who still guided its fortunes, at least intermittently, hadn’t lost their touch. Inside Lord & Thomas, people were reminded of the importance of listening and being responsive to their clients, but at the same time, sticking to their guns. It also became clear that successful advertising was self-fulfilling: in the wake of the Meter-Miser’s astounding success, General Motors’s engineers felt compelled to make sure that the Frigidaire was stingy with current.

Finally, the wisdom of maintaining a creative tension within the agency, and drawing on the collective talents of a team, once again became apparent. Ted Little’s inspiration, David Noyes emphasized, almost failed to make it to the table, and that would have been both the agency’s and the client’s loss:

That is why [Lasker] has an inviolable rule that no one must sit in criticism over his creative thinking, and no man is privileged to reject his own ideas, no matter how absurd. He must always submit it for final appraisal, where the decision is made . . . Each man goes to work on the other man, and it is a sort of healthy conflict, where everybody attacks everybody else’s work with no quarter given, but no pride at stake with everything you submitted, [and] always with the idea that practically everything is going to be thrown out.⁷³

Frigidaire remained a Lord & Thomas account until Lasker closed the agency’s doors in 1942, and remained an account of Foote, Cone & Belding (Lord & Thomas’s successor agency) until 1955.

In more ways than one, Lasker’s triumph at Frigidaire represented the end of an era. It was the last big account that Lord & Thomas won and the last account on which Lasker put his personal stamp.

In addition, it was the last time Albert Lasker developed a close personal rapport with a company’s leader—in this case, Frigidaire’s president and general manager—and did business on a peer-to-peer level. American business was becoming more stratified, divisionalized, hierarchical, and impersonal, and the kinds of personal relationships that Lasker cultivated and counted upon for his influence were increasingly difficult to establish.

Lasker found hierarchies boring. He relished his head-to-head confrontations with the likes of George Washington Hill and David Sarnoff. He enjoyed being a player, especially a player with a significant equity stake. And he believed, with some justification, that injecting bureaucracy into the advertising process only hurt that process.

Eventually, these changes would help drive Lasker out of advertising. First, though, he and his West Coast lieutenants would use the tools of their trade—including their newly acquired skills in radio—to change the course of American politics once again.