“The whole world stands on the verge of that period of sound prosperity which follows catastrophe and reconstruction.” -letter from the Royal Bank of Canada, quoted in the January 5, 1929 issue of Marketing
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On Tuesday, Oct. 29, 1929, the global stock market crash ushered in one of the most painful and transformative eras in history. The economic boom that had characterized most of the latter half of the 1920s was revealed to have been built on a rickety foundation of overproduction and consumer credit. The collapse of that foundation led to a spike in unemployment, plummeting consumer spending power and decreased trade. In response, governments began to take a more active role in providing for the general population and regulating the activities of businesses. All of which was chronicled in Marketing during the period that would come to be known as the Great Depression.
In the months prior to the market crash, Marketing‘s editorial content exuded the same confidence that most business leaders and consumers had in the economy. That the publication did not see the Depression coming was evident in articles such as an April, 1929 piece by Philip Spane that chided businessmen for fabricating fear as an alibi for poor performance: “Somebody will have to exercise his imagination and think up a nice, big, fat, juicy fear for 1929,” wrote Spane. And even when a very real reason for fear presented itself on Black Tuesday, Marketing‘s initial reaction was a dismissive shrug-the market crash was barely mentioned in the issues that immediately followed it.
By the following year, however, it was no longer possible for Marketing to ignore the effects of the economic meltdown. Yet the magazine still did not give in to the gloom, instead trying to encourage its readers to buck up and be confident, believing that if marketers behaved normally, consumers would reward them. In an article entitled, “Throwing a Scare Into People Does Not Loosen Purse Strings,” Spane scolded advertisers and the media for their overt acknowledgement of the gloomy situation.
“If it be true that anything repeated often enough comes to be believed, it ought to follow that the less said about trade depression the better, for it is hardly conceivable that any good end can be attained by making the public more depressed than they are.”
Nevertheless, it was hardly conceivable that Marketing‘s insistent calls for companies to demonstrate confidence could counteract the developing realities, including the fact that many firms were beginning to regard advertising as an area of potential cost-cutting. In July 1930, Bertram Booker wrote about how companies that maintained or increased advertising during an economic downturn in 1923 fared better than their more thrifty counterparts, but when Marketing published its annual ad spend forecast in January, 1931, 16% of respondents said they planned to cut back.
In that same issue, Marketing predicted an impending economic recovery. Instead, the country, indeed the world, sank even deeper. By early 1932, the number of advertisers who planned to decrease spending in the coming year jumped to 23%, making Marketing‘s continuing calls for optimism appear even more strained. An editorial in April struggled to sound a positive note, reading, “One would like to believe that present retarding and perilous conditions are subsiding, but there is not much in the outlook to encourage either faith or hope. Despair, however, would be worse than foolish.”
Yet despair seemed understandable given that the low ebb was about to be reached. Though a headline in its first issue of 1933 trumpeted the message, “Canadian Advertisers to Make 1933 a Recovery Year,” Marketing also published the news that a record-high 27% of advertisers planned a decrease in spending, while only 16% had budgeted for an increase.
Indeed, 1933 would prove to be the nadir of the Depression, with 27% of Canadians out of work and $98 million in corporate losses (corporate profits had hit $396 million in 1929). With consumers unable to scrape together money for purchases, companies began to engage in drastic price-cutting, a practice deplored in the pages of Marketing.
The magazine was also skeptical of the sweeping changes made by U.S. president Franklin D. Roosevelt after his inauguration early in 1933. Roosevelt’s National Industrial Recovery Act-a pillar of what would come to be known as the New Deal-aimed to reduce unemployment and eliminate unfair business practices, and included a vast expansion of government powers. This rankled the free-market purists at Marketing, who wrote in an August article that, “The Act marks a definite break in the economic history of the United States. The comfortable theory of free competitive enterprise-that each individual, seeking his own welfare, will thus promote the general welfare-has broken down. In an adventurous experiment, the American people have turned to a new theory-that private initiative must be restrained, restricted and directed to serve public convenience and public welfare.”
This “adventurous experiment”-along with similar initiatives in Canada-ultimately helped clear the way for economic recovery. Only 6% of advertisers planned to reduce advertising spend in 1934, and by 1935 the number was 2%. Good news began to seep into the pages of Marketing, which reported improvements in economic indicators such as the buying power of farmers and the end of a long downward trend in business and construction. In an early 1935 issue, Marketing proclaimed that, “It is apparent, therefore, that so far as advertising plans are a gauge of business conditions, the corner is definitely turned and that somewhat hard-to-define condition known as ‘normal times’ is in the offing.”
Better times, certainly. Businesses continued to rally in 1936 and 1937, and steadily increased advertising along with the recovery. Meanwhile, Marketing began to run more backward-looking articles that referred to the depression in the past tense. Analyses of the lessons learned during the difficult times-lessons such as the need for more and better market research-began to appear, and greater attention was paid to less weighty matters, such as the Dionne Quintuplets’ status as celebrity endorsers. One of the magazine’s first in-depth pieces on Nazi Germany also appeared in 1936-an examination of the country’s advertising regulation policies that included a chilling question about those who failed to abide by them.
“What happens to the German… who refuses to obey these particular ‘verbotens,’ the speaker did not inform us.”
By the end of 1937, Canada had enjoyed four straight years of gradual economic recovery, a trend that would stall slightly in the first half of 1938. The pause was short and, with the despair of the 1932-33 abyss in recent memory, generated little hand-wringing in Marketing‘s pages. The publication’s eyes were on the future, anticipating the arrival of television and grappling with the concept of the “consumer movement”- organized groups of consumers that aimed to restrict sensational or misleading advertising. Signs that the next major world conflict was on the horizon were also in evidence, a subject that Marketing alluded to in a November, 1938 piece entitled “Domestic and Foreign Propaganda Will Be Well-Organized in ‘Next War.’ ”
World War II arrived the following September, preceded by several articles in Marketing that debated whether its onset would bring doom or prosperity. An April article leaned, cautiously, toward the latter. “No sign is evident of a general desire to cancel advertising commitments, or to hold up campaigns owing to war scares, although many advertisers are confining their promotional efforts to short-term agreements.”
As the war grew closer, Marketing repeatedly published articles suggesting that business and advertising would not be adversely affected. Once hostilities officially commenced in early September, Marketing reported that disruption would be minimal, and that war, in fact, could prove a boon to the economy. A mid-September article quoted a federal budget speech by J.L. Ilsley, minister of national revenue. “After a short period of hesitation and quietness, it is very likely that business will improve and that under the impact of war demand production activity and, consequently, individual and business incomes will rise substantially.”
This prediction would prove to be accurate. In mid-December, Marketing‘s cover led with the headline, “Preliminary Months of War Show Business Improvement,” with the corresponding article pointing to increased retail sales and the introduction (and advertising) of several new products, as well as a decrease in unemployment. Six years after the worst of the economic crisis, a political and military crisis had finally brought prosperity back to Canada.
And, for the first time in a decade, Marketing‘s optimism about the country’s economic future was more than just wishful thinking.
