This history of advertising from the 1800's and why it's gone off the rails.

by Matt Greitzer
I'm reading a book right now, The Mirror Makers, by Steven Fox. It chronicles the history of the advertising industry from its birth as a business -- the health tonic and bromide gold rush in the 1800s -- up to the mid-1990s. The book is fascinating on many levels. Matthew Wiener, creator of "Mad Men," actually used this book for background and source material, and some of the scenarios in the show are pulled directly from real events in the book. Beyond that, it's full of interesting facts and tidbits that both entertain and help one better understand how we got where we are as an industry today.

Consider this fact: Sometime just after the Civil War, an up-and-coming ad man named Francis Wayland Ayer (founder of N.W. Ayer & Sons, absorbed by Publicis in the early '90s) invented the "open contract." The open contract is open in the sense that the advertiser knows exactly how much its agent, the ad agency, is making in commission on media spend.

Prior to Ayer's open contract, ad agencies were in the arbitrage business, maximizing the spread between what they were paid by advertisers and what they paid out to publishers. Ad agencies, in fact, were the very first ad networks.  Read the full article...MediaPost Publications Looking For Answers In All The Right Places 06/19/2009