Read this article series on the history of advertising agencies from Marsha Appel, SVP Research Services, [email protected]. Don’t miss other Defining Moments in Agency History. Let us know what you think!
The phrase “Madison Avenue” has long been synonymous with the advertising agency business, but what is that based on? Were most agencies concentrated on that single street at one point, or is this a misnomer?
According to popular wisdom, the enduring link between Madison Avenue and advertising dates back to the post World War II era, when books and movies like The Hucksters (1946) and The Man in the Gray Flannel Suit (1955) indelibly connected the two in American pop culture.
But did the phrase really originate in the postwar era, and was the designation geographically accurate? Actually, the connection between Madison Avenue and advertising in the American psyche dates back much earlier than the ‘50s. To learn the truth, we must delve into early agency history.
At the end of the 19th century, when New York City was becoming an important center of commerce, most business enterprises were located near the southern tip of Manhattan. The banking and investment industry was dubbed ‘Wall Street’ for a reason, and the financial world is still concentrated there. Agencies arose to serve the financial community: Doremus, The Albert Frank Company (now operating as the Gate Worldwide), and 4A’s charter member Edwin Bird Wilson are three that were all located near the Wall Street behemoths that were their clients.
As other kinds of businesses migrated uptown, the agency business followed. When the 4A’s was established in June 1917, its first headquarters was in the Metropolitan Tower at Madison Avenue and 23rd Street, near many of the Association’s members. That first year, there were 50 4A’s members in New York City; seven of them (14%) were based on Madison Avenue, including J. Walter Thompson.
In 1927, JWT left to move farther north and settled in the Graybar Building at 420 Lexington Avenue near Grand Central Terminal, where it would remain for 54 years. H.K. McCann (which didn’t merge with the Erickson Co. until 1930) chose that same year to move to Madison Avenue. By that time, almost a quarter of 4A’s New York City members had Madison Avenue addresses.
According to Roland Marchand’s book, Advertising the American Dream, the phrase ‘Madison Avenue’ was first used to denote advertising around 1923, and by the late 1920s, it was both a prevalent and geographically accurate term. It is worth noting that the George Batten Company moved to 383 Madison Avenue at 46th Street in early 1923, long before the 1928 merger that formed BBDO, and the agency remained there until 1987.
Perhaps the most iconic Madison Avenue agency was Young & Rubicam. Formed in 1923 in Philadelphia, an ultimatum from client Postum necessitated a move to New York in order to obtain the Jell-O account. Y&R moved to 285 Madison Avenue between 40th and 41st Streets in 1928.
Agencies continued to land on Madison Avenue. The trend reached its pinnacle in 1937, when fully 37% of 4A’s New York members (22 out of 60) were based there (with nine on Park, and eight each on Fifth and Lexington Avenues). Other agencies, like Tracy-Locke-Dawson at 22 E. 40th Street, were just around the corner from Madison.
After the 1937 peak, the percentage of agencies located on Madison Avenue dropped to a bit under 25%, and it stayed pretty constant until the late 1970s, when the next big migrations began. First, a number of agencies moved eastward to Third or Lexington Avenues or westward to Fifth. After Dancer Fitzgerald Sample moved to the Chrysler Building on Lexington in 1979, only four of the top 25 agencies remained on Madison Avenue (DDB, Y&R, BBDO, and Compton). A 1979 Media Decisions article pointed out that, even so, there were still more agencies on Madison Avenue than in either Philadelphia or Boston.
Starting with Geer, DuBois in 1981, high rents sent a number of agencies to Lower Fifth Avenue, between 13th and 23rd Streets. This wasn’t really that far south of midtown, but it did generate headlines and a rebranding as ‘Madison Avenue South’. Then, in 1985, Saatchi stunned the ad world by announcing it would move 60 blocks south to Hudson Street. (Note: After 30 years there, they relocated into the midtown headquarters of Publicis in September 2017.) Della Femina, Travisano and a number of others followed, making Soho and Canal Street West a new agency hub. By 1987, only 17% of New York members were still on Madison Avenue.
Then the shift continued a bit north and definitely westward, with BBDO moving to Sixth Avenue (leaving its Madison Avenue home after 64 years) and D’Arcy Masius Benton & Bowles heading to Broadway. It felt like Ogilvy & Mather and N.W. Ayer were leaving for another city entirely when they decamped for Eighth Avenue and 49th Street in 1989. (In retrospect, that location looks solidly midtown compared with Ogilvy’s current spot on Eleventh Avenue, a stone’s throw from the Hudson River.) The shift away from Madison continued and then stabilized at about 12% since 2007.
The newest destination is Brooklyn, as agencies chase cheaper rents and proximity to the burgeoning tech center in a borough with a hipper and more creative image than Manhattan.
As for Young & Rubicam, the last great symbol of Madison Avenue departed for Columbus Circle in 2013 after 85 years.