The Inward Thrust of Institutional Advertising:
General
Electric
and General
Motors
in the 1920s
Roland Marchand
Universityof California,Davis
CharlesF. "Boss"Kettering,the well-publicized
chief of the General
Motors ResearchLaboratory,offeredwhat wouldhaveseemedto mostlay
observers
an unusualproposalfor aimingadvertisements
at a primeaudience
when he addressed a convention of national advertisers in 1927. "I think that
every'ad' shouldbe postedin everyfactorywherethe productis made,"
Ketteringasserted."If the advertising
cannotmakethat workingforcewant
to makea betterarticleaftertheyhavereadit thantheydid before,thenyou
havelost something"
[31].
Most people, then and now, think of advertisingas somethinga
corporationaims at the public, not somethingdirectedinward to its own
organization.But Ketteringwasnot presentinga new idea to his audience
of advertising
leaders;neitherwashe suggesting
a practiceunfamiliarto his
own organization. Moreover, althoughKettering specificallydefined his
proposalin termsof productadvertising,
the experienceof severalmajor
corporations,
of whichGeneralMotorswasa prominentexample,recentlyhad
demonstrated
the evenmoresignificant
inwardthrustthat couldbe givento
advertising
of anotherkind: institutional
advertising.
Duringthe 1920sthelabel"institutional"
wasappliedto essentially
every
form of advertisingthat did not aim primarilyat the immediatesale of
productsand services.The term coveredsuchcampaigns
as thoseby which
the meatpackers,the utilities,and the railroadshad cultivatedthe public's
supportagainstcertainformsof regulation.It alsoincludedsuchserviceor
"philanthropic"
campaigns
as the longseriesof healthadspublishedby the
MetropolitanLife Insurance
Company,
andit encompassed
all of thoseefforts
by corporations
rangingfrom banksto shoemanufacturers
and from the
PullmanCompany(producerand operatorof the PullmanPalaceCars) to
WesternElectric(manufacturer
of telephoneequipmentfor AT&T) to keep
their namesbeforethe publicin waysthat wouldenhancetheir prestigeand
their stockof public"goodwill."
Since good public relationsseemedthe most obviousand visible
purposeof institutional
advertising,
it is easyto assumethatits impactshould
be judgedby its effecton publicgoodwill--unmeasurable
asthat effectwas
apt to be. But two simultaneous
institutionaladvertisingcampaignsin the
early 1920s,by two of the nation'sbiggestcompanies,suggestthat large
corporations
werediscovering
andexploiting
whatwerepotentiallyevenmore
significant
dimensions
of suchcampaigns-theirrole in long-range
marketing
andtheircapacity
to promoteinternalloyaltyandcorporatecentralization.In
meetingtheseadditionalneeds,institutionaladvertisingcame to acquirean
BUSINESS AND ECONOMIC
HISTORY, SecondSeries,VolumeEighteen,1989.
Copyright(c) 1989by the BusinessHistoryConference.ISSN 0849-6825.
188
189
inward thrust that was as importantas its outwardquest for prestigious
familiarity.
At the GeneralElectricCompany,to turn to the first of my major
examplesof the broad conceptualization
and internal merchandising
of
institutional
advertising,
1922wasan auspicious
yearfor experiments.
In May
of thatyearthe 78-year-old
CharlesF. Coffinclosedouthistermof 30 years
ascompany
President(1892-1913)andChairmanof the Board(1913-1922),
givingwayto a leadership
teamof twomenwhowereto epitomizethe new
era of "business
statesmanship"
of the 1920s. Owen D. Young,a lawyerof
international
outlookand diversepublicinterests,
becameChairmanof the
Board;Gerard Swope,former executiveat WesternElectricand one-term
residentin JaneAddams'Hull House,tookoveraspresident[36,pp. 102-03,
109-11;37, pp. 325-29].
At this time GE was still primarily a producerof large electrical
equipment-motors,turbines,
andtransformers-for railroads,publicutilities,
andotherindustrial
enterprises.
Theonlyproducts
thatGE thensolddirectly
to consumers
underitsownnamewerefansandlightbulbs(thenuniversally
knownas"lamps").A marketsurveyin 1918revealedthatto mostconsumers
"thename of the GeneralElectricCompanyhas only an extremelyvague
significance"
[20, 58]. Moreover,the company,organizedby financierJ.P.
Morganin 1892,waswidelydistrusted
asa "WallStreet"operation.In 1911
the Attorney General had hauled GE into court on anti-trust charges,
declaringthat the "electricaltrust"was amongthe nation'smostpowerful
monopolies.Under PresidentCoffin'sleadership,
the company's
response
to
both changingmarketsand politicalagitationhad been conservative:keep
quietandkeeponconcentrating
onlargeapparatus.As Coffinsuccinctly
put
it, "A company's
job is simplyto makegoodsandsell them"[quotedin 29,
p. 387].
But SwopeandYoungsweptinto officein 1922with new,enhanced
visionsof corporatemerchandising
and service. Swopein particularwas
comingto believethat the futureof GeneralElectriclay in the expansion
of
its mass consumer market.
General Electric had invested in one of the
nation'smost highly-developed
researchlaboratories. Even thoughGE
presentlysold few consumerproductsunderits own name,it now seemed
logicalto consolidate
its affiliates'productsunderthe GE trademarkand to
augmentits line of appliances
by purchasing
other companies.Then GE's
researchcapacitycouldbe usedto improvethe appliances
of its subsidiaries
[22;39, pp. 24-25;43, pp. 91, 95].
Sucha strategypromiseda futureparadeof new consumerproducts
onto the market, productsthat could be launchedmore effectivelyif
introduced
by the centralcorporation,
prominently
linkedwith its research
activities,andassociated
with a prestigious
family-of-products
nameandlogo.
Duringhisearlieryearsasa WesternElectricexecutive,
Swopehadenvisioned
puttingthe WE brand "on everythingelectricalgoinginto the American
home,"only to see his ambitionthwartedby WesternElectric'spriority
commitment
to producetelephone
equipment
forAT&T. Now,asDavidLoth
has noted,the only differencewas that, insteadof "WE",the omnipresent
monogram
in theAmericanhomewouldread"GE"[39,pp. 24-25;36,p. 133].
190
Of the variousobstaclesto this strategy,the most significantwere
GeneralElectric'slackof publicrecognition
andits deficiencies
in integration
andcohesion.As BruceBartonof the advertising
agencyof Barton,Dursthe
andOsborn(BDO) pointedout,bothproblemscouldbe tackledeffectively
through
aproperly-merchandised
institutional
advertising
campaign.
Presently,
asthe agencyadmonished
GE, its twolightbulbmanufacturers-the Edison
LampCompanyandtheNationalLampCompany--eyedthe parentcompany
suspiciously
andmaintained
primaryallegiances
to theirdistinctorigins.Both
seemedbarelyto tolerateanyvisibleassociation
withGeneralElectricin their
advertising.
The BDO agencycriticizedtheirrationalityof these"privatetittle
campaigns"
anddeploredthewayin whichsuchaffiliates'productsasPremier
VacuumCleaners,Thor WashingMachines,andHot-Pointproductsrelegated
GE to invisibility
in theiradvertising
[3, 8, 44,45]. WhenSwopeinitiatedthe
process
of collaboration
in all GE advertising
witha generalconference
of all
advertising
executives
in mid-1922,BDO wasreadyto urgethatthe rightkind
of planwouldpromoteinternalmoraleandcooperation
aswellasprovideGE
with the rightkindof imagefor the public[4, 7].
Implicitin the institutional
campaigns
whichGeneralElectricand its
agencylaunchedfrom 1923through1927were twocriticalelements.The first
wasthatof a largevisionwithwhichthe entirecorporation
couldidentifyand
behindwhichitsvariousdivisions
andindividualmanagers
couldrally. Bruce
Bartonwasa manto whomlargevisionsof business
benevolence
cameeasily;
hisproposals
toucheda nervein SwopeandYoungwholookedforwardto a
statesmanlike
publicrole for big business.GeneralElectric,said Barton,
shouldnot simplymerchandise
itself to the American public as a large
electricalequipmentcompany. It shouldmarchforwardunder a nobler
banner--that of the nation'scrusaderfor "an electricalconsciousness."
By
doingsucha big and"unselfish"
thing,GE wouldimplicitlyclaimleadership
of the entireindustry.It wouldassume
theloftystanceof a greatinstitution
readyto provideits services
for humanprogress
[2, 3, 50].
One aspectof the new institutional
campaign,
Swopeand the BDO
agencyagreed,mustbe an ongoingeffortto insurethat the GeneralElectric
logo,theGE initialsthatwouldnowbe associated
withhumanprogress,
were
stampedin a uniformway on all GE and affiliates'advertisingand on all
factorysigns[3, 62, 63, 64, 65]. A classic1923GE advertisement
soughtto
insurethat themeaningof the logo,aswell asits design,wouldbe embedded
in the consciousness
of all who viewed it. Entitled "An Emblem of Service,"
thisdefinitivead soughtpermanently
to identifythe GE logoas"TheInitials
of a Friend."Sincethe purposeof the newcampaign
was"topersonalize
the
Company,"arguedBruceBarton of BDO, the impersonalword "company"
shouldbe dropped. Just plain "GeneralElectric"was a "morecolloquial
signature."With time,Bartonconfidently
predicted,
the phrase"initialsof a
friend"wouldquietlyworkitselfinto the publicconsciousness.
It wouldgive
the organization
"something
to live up to" [3, 4, 24, 52].
This "something
to liveup to"wouldconstitute
a unifyingvisionfor all
segments
of GeneralElectric.Here waswherethe secondcriticalelementin
the campaignemerged--an aggressive
programto "re-sell"the institutional
advertising
to themembersof the company,
itself. The newcampaigns
were
191
reproduced
andexplained
in thelocaldivisional
newsletters.
Immediately
in
1923thecorporation
launched
a newpublication
aimedat itsmanagers.
The
verytitleof thenewGE Monogram
proclaimed
anincreasingly
predominant
role for the company
logo. The company's
elaborateinternalbrochureon
1924publicity
assured
localmanagers,
salesmen,
anddistributors
thatthevery
prominent
rolegivento thelargeGE monogram
in theinstitutional
campaign
insureda majorcontribution
to theirmarketing
efforts[3, 4, 24, 69]. In a
sense
Swope
andtheBarton,DurstineandOsbornagency
hadrecognized
the
role that the newinstitutional
campaign
couldplayin the internaldynamics
oftheweakly-integrated
amalgam
ofmanufacturing
operations
thatconstituted
GeneralElectricin theearly1920s.Theymadecertainthatthenewnational
campaign
for an "electrical
consciousness"
wasaccompanied
by an intense
internalcampaignfor a "corporation
consciousness"
[1, 4, 9].
These centralizingand unifyingefforts did not proceedwithout
resistance.
The various
manufacturing
divisions
of thecompany
were"taxed"
(as GE executives
put it) to payfor the institutional
advertising
andsome
deeplyresented
having"theirmoney"siphoned
off merelyto "educate
the
public." In response,
BDO continuedto cultivatea sensitivity
to the
importanceof "reselling"
the institutional
campaigns
within GE and
overcoming
localresistance
to a morecentralized
corporateconsciousness.
FromGE's advertising
manager,BruceBartonexactedcooperation
in a plan
for "Makingour own organization
advertising
conscious."
The electrical
consciousness
campaign
wouldnotbe effective,
he argued,
unless
it created
"ineveryrepresentative
of GE ... a largerpridein hisworkandselfconfidence
bornof the knowledge
thathe is backedupby the forceof a greatnational
understanding"
[1, 3, 7, 10, 14].
I will not attemptto describeherethe contentsof the extensive
GE
institutional
campaigns
between1923and1927,but merelyobservethat GE
did moveincreasingly
into the consumer
products
business
and that its GE
Refrigerator,
launched
in the marketin 1927afterfouryearsof intensive
institutional
advertising,
provedanimmense
success.
By 1929it commanded
nearlyone-third
of thenational
market[21]. Otherfactors,
suchastechnical
soundness
anda gooddistribution
system,
mayhaveplayedanevenlargerrole
thanthe effectsof institutional
advertising
on the "merchandising
mix"that
underlaythesuccess
of theGE refrigerator.Butwe stillcanaskwhetherGE
couldhaveexpected
suchsuccess
withitsrefrigerator
in 1922--whenmembers
of thesalesforcehadtoldtopGE executives
that"theGE trademark
meant
littleto the average
housewife"
[67]. Moreover,
agency
studies
in 1924and
1926revealedthatmorepeoplewereawareof GE'sactivities
in research
than
theywereof thoseof anyothercorporation
[13]. Institutional
advertising
had
increased
thatvisibility
andGE wouldcontinue
to emphasize
itsresearch
in
the advertising
of eachnew consumer
product(including
a GE radio,the
relation of which to GE researchwas tenuousand whichwas not actually
manufactured
by GE) [42, 49]. Aboveall, as GE leadersobserved,
the
institutional
advertising
campaigns
hadgivenan impetusto greaterinternal
coordination
andcohesion
withinthe company.Theyhadhelpedstampthe
GE logo,the "initialsof a friend,"uponthe entire organization
and its
192
affiliatesandhadhelpedunitethembehindthe visionof the companythat it
represented.
Simultaneouslywith General Electric's major commitment to
institutionaladvertising
in 1923,anothercorporategiantembarkedupon a
remarkablysimilarventure. The situationof GeneralMotors in the early
1920swasbothsimilarto, anddifferentfrom,that of GeneralElectric. Unlike
GE, GeneralMotors alreadymarketedthe hugemajorityof its products
directlyto consumers
and,unlike6E, it didnot sufferfrom publicmistrustfor
monopolypractices. But it facedproblemsof internal coordinationand
controlevengreaterthanthosefacedby GE andit wasjust asinvisible,
asa
corporation,
to thegeneralpublic.In 1922a studycommissioned
bypresident
AlfredP. Sloan,Jr., hadrevealedthat "peoplethroughout
theUnitedStates,
exceptat the cornerof Wall andBroadStreets,didn'tknowanythingabout
GeneralMotors"[54,p. 27]. The publichadheardof Buicks,Chewoletsand
Cadillacs;
but hardlyanyonewouldhaveconnected
thesecarswith a company
named General Motors. When Pierre Du Pont and Alfred P. Sloan, Jr. took
over leadershipin the corporationat the end of 1920,moreover,General
Motorswaslittle morethana holdingcompany.In the wordsof subsequent
GM executiveDonaldsonBrown,it "wasentirelylackingin any form of
coordinatedcontrol." Thus General Motors, at the outset of the 1920s,
amountedto something
lessthan the sum total of its individualparts [18,
pp. 473, 597; 15, p. xi].
Whenthe economy
beganto recoverin 1922Sloanaccelerated
a push
toward rationalization
and more centralized control.
This effort did not
proceedwithoutresistance.Alfred ChandlerandStephenSalsbury
pointout
that most of the operatingmen in the GM divisions"lookedwith great
skepticismand often distruston the representatives
of easternfinancial
interests"
[18,p. 499]. As Ed Crayhasobserved,
"thereweremen all around
who knewonlyDurant'sway of doingbusiness,
men who pulledlongfaces
wheneverSloantalkedaboutrationalmanagerialcontrols"
[19,p. 189]. Sloan
nowdeviseda plan for makingprogress
in one areawherethe largesizeof
GeneralMotorsofferedevidentefficiencies.
Surelycentralized
purchasing
to
meetthe commonand overlappi•4g
needsof the variousdivisionscouldbring
down coststhroughvolumeorders. When divisionmanagersremained
skeptical,Sloan devisedthe structureof an "interdivisional
committee,"
shrewdly
bypassing
the divisionmanagers
throughan organizational
structure
that linked top corporateexecutives
directlyto specializedstaff members
within the divisions. As Arthur Kuhn has emphasized,"the central
headquarters
powergrewfar beyondits apparentauthority"
[17,pp. 154-55;
34, pp. 21, 127].
Severalmonthslater,Sloanlaidthegroundwork
for a second
divisional
committee-on institutional
advertising.
PierreDu Pont,stronglyendorsing
this step,observedto Sloanthat evenif the valueof the advertising
was
negligible,
"theotherbenefitsaccruing
to the corporation
by the development
of a GeneralMotors atmosphere
and the workingtogetherspirit of all
membersof the Committee..."wouldalonejustifythe costof the advertising
campaign[54, p. 105]. When Barton, Durstine and Osborn won the
competition
to planGeneralMotors'newinstitutional
advertising
campaign,
193
BDO leadersspeculated
privatelythattheiragency
hadbeenselected
largely
because"werecognized
the problemof gettingthe unitsto be enthusiastic
aboutthe parentcompany's
campaign
.... "[12; 34, p. 132].
Once again,as at General Electric, the essenceof the institutional
campaignwas a large visionof the company's
serviceto humanity. By
promising
largeserviceandaccepting
largeresponsibilities,
thecompany
could
presentits largesizein the mostpositivelight. GeneralMotorswouldthus
proveitselfbig enoughto assumethe burdenof "morethana campaignfor
itself."It couldimplyitsdominance
by actingasthe spokesman
for the entire
industryand heraldingthe motor car as "a great contributorto human
effectiveness,an enlarger and enricher of human life." Thus its ads
proclaimed
thecontributions
to higherservice,
notsimplyof GeneralMotors,
but of the automobile.In impressive
double-spread
adssuchas "Thatthe
Doctor May Arrive in Time," GM celebratedthe automobilefor enablinga
countrydoctorto reach"thebesideof a dyingchild"in time to reviveit and
"bringit backto life"[46]. By doingthis,BDO affirmed,GeneralMotors
would"evokethat spontaneous
response
whichalwayscomeswhena strong
manor institutiondoesa big,generous
thing"[11,pp. 6-7;30; 59, p. 27].
With thislargevisionset forth beforethe public,the managersand
employeeswithin General Motors could then be encouragedto identify
themselves
loyallyandenthusiastically
withsucha noblepurpose.The Barton,
DurstineandOsbornagencysteadilypresseda "resale"
campaign
to sellthe
institutional
advertising
withinGM itselfandthusto promoteinternalmorale
andcohesion.
Adsfromthe"goodwill"
serieswerepostedin all factories(and
on the wallsof the initially-skeptical
"Boss"
Kettering's
researchlaboratory)
andweresuppliedin "jumbo"sizeaspostersfor the car dealersto displayin
theirwindows.GeneralMotorsdevoted
reamsof paperto thecirculation
of
multi-paged
mimeographed
compilations
of thevariouscommendatory
letters
thecampaign
evoked.BruceBartonsoughtto inducedivision
representatives
to identifywith hiseffortsandwiththe corporation
by appealing
directlyto
themto passalongto him, from their ownexperiences
and from the letters
they received,"dramaticinstances"of car performanceand of lives
transformed
by theautomobile
[11,p. 16;16;26;27]. The programof internal
"resale"
represented
both an effortto realizethe central,statedobjectiveof
the institutionaladvertising
campaign--the stimulationof a "corporation
consciousness"
among the variousdivisions--and to insure BDO of a
continuing
account[11,pp. 8, 14, 16;26].
By the mid-1920smuch of Sloan'sstructuralreorganizationof the
formerly-disjointed
company
hadbeenaccomplished.
Sloanhaddoubtedhis
powerto centralizethroughmandateor to fosterdivisionalloyaltyto the
largercorporation
throughobtrusive,
strong-arm
methods.He hadobserved
to Ketteringin 1923that "thereis nothingthatcannotbe accomplished
along
cooperation
(sic)linesin the GM Corp.today."But he alsohadinsistedthat
"forcinga thingacross"
wouldnot work andthat the company's
executive
committee"can not order a co-operating
spirit to be developedin the
organization;
it hasgotto be donein an entirelydifferentway."GivenSloan's
commitment
to a non-confrontational
approach,
he andotherGM executives
194
could appreciatethe role of the institutionaladvertisingin fosteringa
"corporation
point of view"[55, 56, 57].
More than this, the "family of cars"theme of GM institutional
advertising
andtheemphasis
of thecampaigns
on GM researchhadpavedthe
wayfor the marketingof newproductsfrom the "GM family." In 1925the
Oakland divisionof GM launchedthe new Pontiacwith advertisingthat
characterized
the car as "reflecting17 yearsof GeneralMotors experience."
The trade journal,Printers'Ink, attributedthe Pontiac'simmediatesuccess
directlyto the effectiveness
of GM's institutionaladvertising
[41]. In 1927the
company
madeveryprominentuseof the GM namein advertisements
for the
improvedFrigidaire.Ads announced
the new modelas "theonlyelectric
refrigeratormadeandguaranteed
by GeneralMotors"and evenpushedthe
connection
furtherby encouraging
readersof the SaturdayEveningPost to
envisionthe Frigidaireas "TheCar in the Kitchen"[47,48].
Thusthe GeneralMotorsandGeneralElectriccampaigns
of the 1920s
demonstratedthe range of purposesthat broadly-conceived
institutional
advertising
couldencompass.
Thesewerenot thefirstinstitutionalcampaigns
to involvean internal thrust and an effort to lay a basisfor long-term
marketing. The mostfamousof the great institutionalcampaigns,
that of
AT&T, had discoveredthat advertisements
aimed at public relationsand
politicalprotectioncouldproducebyproducts
in marketingand morale[38,
pp. 130-31].But theGeneralMotorsandGeneralElectriccampaigns
involved
a scopeandintensityof internalmarketing,a deliberateintentionto produce
a hearteningand unifyingeffecton all levelsin the corporation,that went
beyondearlier ventures. Within both companies,advertisingostensibly
intendedfor public relationshad also incorporatedother vital functions
includingthe internal infusionof a corporateimage. To describethe
significance
of thisinternalthrust,we wouldundoubtedly
turn todayto such
a fashionable
phraseas "shaping
a corporateculture."Whenpursuedby the
strategiesof GM and GE in the 1920s,publicrelationsand the creationof a
corporatecultureamountedto prettymuchthe samething.
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sept. 19, 1922, separate
Reports,1920-1924folder,case 1, GeneralMotorsCollection,BakerUbrary.
54.
, My Yearswith GeneralMotors(NewYork, 1964).
55.
to CharlesF. Kettering,July3, 1923,Kettering,GMI.
56.
to CharlesF. Kettering,Aug.24, 1923,Kettering,GMI.
57.
to CharlesF. Kettering,Dec. 1, 1923,Kettering,GMI.
58. HubertM. Snider,"GEAdvertising,"
(typescript
of speech,Sept.15, 1977),GE-F.
59. AlfredH. Swayne,"MakingFriendsfor the Family,"JudiciousAdvertising,
20 (Jan.
1924).
60. GerardSwopeto BruceBarton,Mar. 26, 1925,GE-S.
61.
to Bruce Barton, Nov. 19, 1923, GE-S.
62.
to ThomasLogan,Dec.5, 1927,GE-S.
63.
64.
to G.C. Osborne, Feb. 17, 1923, GE-S.
to T.F. McManus, Feb. 28, 1923, GE-S.
65.
to MartinP. Rice,Apr.28, 1930, GE-S.
66.
to P.B. Zimmerman, Dec. 3, 1923, GE-S.
67. W.W. Trenchto O.D. Youn9, July 16, 1922, GE-S.
68. H.G.Weaverto CharlesKettering,
Jan. 12, 1923,Kettering,
GMI.
69. P.B. Zimmermanto GerardSwope,Nov.23, 1923, GE-S.