Under the Influence with Terry O'Reilly - Marketing Pioneers

Episode Date: August 20, 2022

In this episode, we look at the Marketing Pioneers who created products that created industries. We talk about the first company to link diamond rings to engagements, how alcohol inspired the very first travel agent, how a brainstorm while ice-fishing ignited a $97 billion dollar industry, how a traveling salesman and his date led to the first car rental, and how an embarrassing moment in a restaurant revolutionized the way we shop. Each pioneer was a visionary, each overcame almost insurmountable obstacles, and all of them changed our lives forever. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. Due to popular demand, we've dug very, very deep into our archives and are pleased to announce the re-release of episodes from the last season of The Age of Persuasion. And we've remastered them to fit our Under the Influence format. Here is an episode from 2011. This is an apostrophe podcast production. Your teeth look whiter than no nose. You're not you when you're hungry. You're a good hand with all teeth.

You're under the influence with Terry O'Reilly. One day in 1878, a man named George Eastman decided to go on a holiday and take some photography equipment with him. He purchased a wet plate camera, a tripod, plates, and a tent. It was a lot of stuff to bring along just to take a picture. Eastman called it a pack horse load. While he was fascinated by photography, he was completely annoyed at how cumbersome the equipment was.

He was determined to invent a simpler way. Six years later, by a process of trial and error, Eastman finally hit pay dirt. He invented a transparent roll of film that completely replaced dry glass photographic plates. Eastman marveled at his creation, stood back, and waited for customers

to rush in, money in hand. But they didn't. So in 1884, he established a company to create a mass market for a camera that would use his new film.

It had to be as convenient as a pencil. Four years later, Eastman unveiled the Kodak handheld camera, preloaded with enough film for 100 exposures. He came up with a slogan, too. You press the button, we do the rest. The word Kodak was completely made up by Eastman and his mother. As he described the word, it was, quote, terse, abrupt to the point of rudeness,

literally bit off by firm and unyielding consonants at both ends. And that was the genius of it. The word, with the letter K at both ends, snapped like a camera shutter in your face. Kodak. It was only perfect. The 100,000th Kodak camera was sold four years later. In 1900, the Kodak Brownie camera was introduced,

making everyone a photographer. Eastman's invention was also the basis of motion picture film, helping set the standards for 35 millimeter. By 1919, George Eastman was worth 30 million dollars and retired a few years later. As Time magazine noted, Kodak film captured the Hindenburg fireball disaster in 1936. It accompanied Sir Edmund Hillary to the top of Mount Everest. Abraham Zapruder filmed the Kennedy assassination with it. And just about every birthday, wedding, and backyard barbecue in recorded history

has been immortalized with it. George Eastman was a pioneer that not only invented roll film, he created an entire industry, transforming an expensive hobby for a few devotees into a mainstream pastime. The world of marketing has its own list of interesting pioneers. These visionaries not only invented new products or services, they ended up creating new categories that had never existed before. And those categories would change our lives forever. You're under the influence.

In the world of advertising and marketing, there are great stories of those who build, those who innovate, and then there are those who create entire industries. The visionaries who saw something no one else did. People who not only had to figure out how to create an entirely new category, but how to market it to a public who had never seen the product before. While still others saw an opportunity to market an existing product, but do it in such a new way that they created an entirely new industry. Take diamonds for instance. A diamond has almost no practical use. Unlike gold or silver, they aren't pliant and malleable, or electrically conductive. Their biggest asset is that they sparkle. Diamonds became a favorite of royalty as far back as the 15th century. In the late 19th century, diamonds became an investment commodity. People would buy

the gems, then put them away for safekeeping. But after the Depression in the 1930s, the diamond trade crashed because too many of the stones came out of safekeeping as people panicked, glutting the market. Worse still, huge new fields of diamonds were being discovered all over the world, which led to every manufacturer's worst nightmare, increasing supply and decreasing demand. And that was bad news for De Beers, the world's largest diamond supplier.

As writer James B. Twitchell says in his superb book 20 Ads That Shook the World, De Beers contacted ad agency NW Air in 1939 to see if they could devise an advertising strategy to create a mass market for diamonds. The first thing the ad agency did was conduct a market study to see what perception the public had of diamonds. One thing was certain. People didn't associate diamonds

with commitment or romantic love at all. Instead, men preferred to propose with automobiles, trips, fur coats, or more colorful jewelry

such as rubies, sapphires, or opals. So N.W. Ayer got to work. Their strategy was simple. Link diamond rings with engagements. They decided to use the honeymoon as the premise. Famous artists were enlisted to create beautiful paintings of couples in idyllic honeymoon locales. These paintings were transformed into print advertisements,

showing an inset of four diamond rings in the left corner, surrounded by romantic ad copy that linked love with diamonds. Together, hearts light with love. They've shared their new life's happiness, the church so full of music and of friends, the wedding banquet marked with cake and laughter. In the engagement ring on her finger, a fire is kindled with such joys

to light their way through future days with hopes and memories. That is why her diamond, though it need not be costly, or of many carats, should be chosen with special care. Ooh, it was sweet enough to give you a cavity. But the campaign had two more problems to overcome.

First, research showed that there was some confusion about how much a man should spend on a diamond. So, in one of the first ads, the agency solved that problem by writing a headline that asked, Is two months' salary too much for a diamond engagement ring? It was an ingenious way of answering the question without being pinned down

to a cost, and that line is still used in diamond ads to this day. The second problem was that N.W.A.R. needed a great tagline or slogan to tie it all together. Enter ad writer Frances Garrity. She had been working on the De Beers campaign for a while

and was racking her brain to come up with a line that would sum up all the romantic qualities of a diamond. Exhausted one night, she put her head down on the desk and closed her eyes. Suddenly, a phrase popped into her mind. A diamond is forever. It was a stunningly simple line that summed up the fact that diamonds do last because of their intrinsic hardness. But more importantly, the line captured the utterly romantic notion that true love lasts forever.

It also worked as powerfully in English as it did in the 20 different languages into which it was eventually translated. The line would even inspire the 1971 James Bond film, Diamonds Are Forever. In only four years, sales of De Beers diamonds had increased by 55%. Today, of the millions of brides in North America every year, 80% now wear a diamond engagement ring. The diamond engagement ring. How else could two-month salary last forever? A diamond is forever. De Beers.

According to Advertising Age magazine, a diamond is forever is the most famous slogan of the 20th century. And with it, De Beers not only married their product to a marketing strategy, they created an entirely new category of diamond engagement rings. In 1908, Ford introduced the famous and economical Model T. Eight years later, a Nebraskan named Joe Saunders looked at his Model T and wondered if he could rent it out.

So he put out his shingle as the world's first car rental business, with only one car, and found his first customer in a traveling salesman who wanted to impress a local girl he was taking out to dinner. Saunders charged 10 cents a mile.

Encouraged, he soon bought other cars and by 1925 had offices in 21 states across America. Even though the Depression would eventually force him into bankruptcy, he would bounce back in 1947 and become one of the

founders of National Car Rental. Yes, Joe Saunders was a marketing pioneer who had done that rarest of things. He not only started a company, he put an entire industry on the road. And when we rent cars today, we usually pay for them with credit cards, which were inspired by an embarrassing moment in a restaurant. One day in 1949, Frank McNamara, head of the Hamilton Credit Corporation, invited his attorney Ralph Snyder

along with his friend Alfred Bloomingdale out for dinner He took them to a restaurant called Major's Cabin Grill across from the Empire State Building The purpose of the dinner

was to discuss a problem McNamara was having with one of his customers who had borrowed money but wasn't able to pay it back. Since the dinner was his treat, McNamara reached into his pocket to pay for the meals.

Much to his dismay, he realized he had forgotten his wallet and to his embarrassment, he had to call his wife to bring him some money. He vowed never to let that happen again. Thinking about it later, McNamara came up with a new idea, a credit card that could be used at multiple locations, and he would become the profitable middleman.

Prior to that idea, credit cards did exist, but only as store-specific cards developed to maintain loyalty. But you couldn't use those cards at other stores or businesses. And if you wanted to use credit cards when you shopped, you'd have to bring dozens with you. But McNamara saw the opportunity to offer the public the convenience of one single card. So he, Snyder, and Bloomingdale pooled their money and started a company in 1950 called the Diners Club. Restaurants were charged 7% for each transaction, and Diners Club subscribers were charged a $3 annual fee. They wisely targeted salespeople first, as salespeople often needed to dine at multiple restaurants with their clients. That need to dine inspired the name Diners Club.

200 cards were issued in 1950, and 14 restaurants signed up. Those first cards, by the way, were not plastic, but made of cardboard, with a list of participating restaurants on the back. By the end of 1950, 20,000 people were using the Diners Club credit card, and the company enjoyed eight full years without any competition. Nearly 25 years ago,

Diners Club introduced the first executive credit card. Today, around the world, Diners Club is still the first card. We're honored in 75,000 more places than any other executive credit card, including American Express. Diners Club! Then, in 1958, both American Express and Bank AmeriCard,

later called Visa, arrived on the scene, and in 1966, MasterCharge was created, which later changed its name to MasterCard. But when it's all said and done, you have to give credit to Frank McNamara, who forgot his wallet one day and created an entire industry. Thomas Cook was a preacher in the Midlands of England. As a devout Baptist, he had an aversion to alcohol

and was a strict supporter of the temperance movement. One day in 1841, while waiting for a stagecoach, he suddenly wondered if the educational benefits of travel could divert people's attention away from demon alcohol. So on July 5, 1841, Cook arranged for 570 temperance supporters to take a train trip to a rally 11 miles away. The price was one shilling, and it included tickets and food. Cook was paid a share of the fares from the rail company. So, for the next three summers,

he conducted outings for temperance groups and Sunday school children. According to Jonathan Mantle's book titled Companies That Changed the World, the railway company saw the success Cook was having and offered him an arrangement. If Cook could round up groups willing to travel, the railway would pay him a commission. That was enough of an impetus to start the world's first travel agency called Thomas Cook. He began organizing short rail excursions. Then in 1845, he organized a trip for hundreds of people by railway from Liverpool

to Leicester, Nottingham, and Derby. Cook carefully examined the route in advance and produced a 60-page handbook of the journey, in essence, the first travel brochure.

He promoted his services by promising easy, cheap, and safe travel. With that, business started to boom, which prompted him to declare, Advertising is to trade what steam is to machinery. In 1855, he undertook his first continental European tour. Not long after, he invited his son John Cook to join the company, renaming it Thomas Cook and Son Travel Agents. In 1872, the elder Cook conducted the company's first

220-day world tour. To help customers along the way, his son invented what would be the predecessor of the Traveler's Check. Soon, the company had offices around the world, and by 1890, Thomas Cook and Son Travel had sold over 3 million tickets. And along the way, Thomas Cook not only started the very first travel agency, he gave the entire travel industry a first-class ticket to the future. Clarence Birdseye was an American inventor. His unusual surname was bestowed on his family when an ancestor protected the queen from an attacking hawk

by shooting it directly in the eye. Well done, old chap. A Brooklyn native and naturalist, he was a college graduate who went to work as a fur trader in Labrador in 1912. There, he was taught by the Inuits how to ice fish. While in minus 40 degree weather, he noticed that the fish he caught froze almost instantly and when thawed, tasted fresher than any other frozen fish he had ever had. Clarence Birdseye, the businessman, knew in his heart that the public would gladly pay for this quality of frozen food. So he went back home and started experimenting. And with an investment of $7 for an electric fan, buckets of brine, and cakes of ice, he founded Bird's Eye Seafoods in 1924.

He eventually developed and patented a quick-freeze machine, the first frozen food laboratories, and a full line of commercial products. But in order to make his frozen foods commercially successful, Clarence Birdseye had to overcome seemingly insurmountable obstacles. First, he had to persuade supermarkets to lease freezers. So, he began testing refrigerator display cases and started to manufacture them soon after. Next, he had to develop super-insulated railroad cars in order to send his frozen food over long distances. This was his crowning achievement as it made national distribution a reality and made him a very rich man.

Birdseye eventually sold his company to Goldman Sachs and the Postum Company for an astounding $22 million in 1929, just before the stock market crash. Today, Birdseye has a 27% market share of the $2.8 billion frozen vegetable category in North America. Birdseye International and Americana Vegetable Recipes. Why settle for dull? Make a super Birdseye supper. It was Clarence Birdseye's ability to see the future from an ice fishing hole in Labrador that created a frozen food market worth $97 billion worldwide. Very few great ideas in this world are born gift-wrapped, ready to go. As a matter of fact, big ideas almost always reveal themselves in the smallest of ways.

Joe Saunders looked at his lonely Model T and wondered if anyone would want to rent it. Frank McNamara's inspiration for the credit card was the embarrassment of forgetting his wallet. And who knew that Thomas Cook's dislike of alcohol would inspire the world's first travel agency? Each overcame incredible obstacles to create a product that created an industry. And all had that extraordinary ability to build a bridge while walking on it. Not only did Birdseye invent a new way to freeze fish and vegetables,

he had to invent a way to transport it, convince grocery stores to rent freezers, and persuade the public to buy frozen food, all at the same time. And before George Eastman could sell his incredible film, he had to invent a camera to use it. Malcolm Gladwell wrote an interesting article in the New Yorker once. In it, he said that successful entrepreneurs

all have one thing in common. It isn't their appetite for risk. It's their ability to see a sure thing. And that's the amazing thing about pioneers. They stare at the same things we all stare at, but they're able to see the future. And the products they invent keep us

under the influence. I'm Terry O'Reilly. This episode was recorded in the Terrastream Mobile Recording Studio. Producer, Debbie O'Reilly. Sound Engineer, Jeff Devine. Under the influence theme by Ari Posner and Ian Lefevre. Music in this podcast provided by APM Music.

Follow me on Twitter at Terry O'Influence. If you enjoyed this episode, you might also like When Founders Are the Face of a Company, Season 3, Episode 19. You'll find it in our podcast archives. See you next time. Fun fact. There are close to 7 million rental cars available in the world. Beep, beep, and beep, beep.

Wow.