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Pricing the Eyes of Passersby Text Only Pricing the Eyes of Passersby: The Commodification of Audience Attention in U.S. Public Spaces, 1890-1920 Zoe Sherman University of Massachusetts Amherst Abstract This paper explains the growth of the U.S. advertising industry around 1900 by showing how advertisers constructed institutions and used government to convert audience attention into a form of tradable property. They transformed the haphazard business of getting advertisements before the eyes of the public into a matter of commodity exchange by standardizing access to audience attention and controlling competition. Through the process of standardization, advertising professionals found ways to retain a share of the surplus for their own purposes. My empirical work on billposting illuminates the central role that the pursuit of monopoly played in constructing a commodity form of access to pedestrians’ gazes. Monopolist billposters set prices in proportion to the population of likely viewers rather than in proportion to their costs and justified the higher rates by improving the reliability of the service they offered. Even when other forms of media advertising limited the monopoly power of outdoor advertisers, the success in establishing regularized routines and a legal regimen enabled billboard, and other, advertisers to buy the eyes of passersby. 1 Introduction In the late nineteenth and early twentieth centuries, advertisers and the advertising professionals1 who served them successfully pushed the transformation of audience attention into a form of tradable property. At the beginning of this period, getting advertisements before the eyes of the public was a haphazard affair. By the end of the period, advertising in periodical media, outdoor advertising such as billboards, and direct mail marketing had all gone through a process of standardization, allowing advertisers to, with a reasonably high degree of specificity and confidence, purchase access to the attention of desired audiences. The standardization emerged from the interaction of advertisers’ and advertising professionals’ desires. Advertisers wanted reliable access to audience attention for use in their own competitive strategies. While providing reliable access to audiences, advertising professionals wanted to capture a healthy share of advertisers’ selling costs. In the outdoor advertising field in particular, the billposters’ aggressive pursuit of monopoly contributed to achieving both ends. For advertisers, advertising was a critical component of their competitive strategy, both in horizontal competition against other sellers of similar goods and in vertical competition against others in the consumer good distribution chain. In horizontal competition, advertising was a tool used to pursue high market share at steady, profitable retail prices. In vertical competition, advertising was a tool used to try to capture the largest possible share of the difference between the retail price and the manufacturer’s cost of producing the goods – that pool of surplus out of which everyone in the 1 A note on terminology: Advertisers are the sellers of advertised goods. I am using the term “advertising professionals” to refer to the array of people involved in providing advertising services, including characters such as advertising agents, copywriters and illustrators, billposters, lithographers, and distributors. 2 distribution chain must carve their profits (Chandler 2002, Strasser 1989, Laird 1998). Readily available, predictable, measurable access to audience attention was a necessary prerequisite for advertisers to carry out their strategies and this prerequisite was achieved by making attention a purchasable good. The ability to buy and sell attention depends on establishing property rights in attention so that there is something to be traded, and on establishing rules for market engagement so that there is some way to carry out the trade. Advertisers and the suppliers of attention both enlisted the state in the definition and defense of the necessary new property rights. They struggled over how to carry out the exchanges and a new market infrastructure was forged in the heat of their battles. Given the necessary property rights and market infrastructure, attention can be traded. It can be attracted or intercepted for the purpose of trade, but it cannot be newly produced to meet demand. It is in this sense like a privatized natural resource. To sell attention is to offer those who pay the fee preferential access to the eyes of audiences. The ability to sell preferential access to some depends on the ability to exclude others. State-sanctioned property rights in attention therefore represent a degree of state- sanctioned monopoly in the sense of the term used by Edward Chamberlin in The Theory of Monopolistic Competition (1962) – every producer has a monopoly on their own individual output. In the outdoor advertising field, the billposters only achieved monopoly in Chamberlin’s more expansive sense of the word in conjunction with monopoly in the more traditional sense of the word, as exclusive sellers of a particular class of goods with a high degree of price-setting power. 3 Both the horizontal and vertical competitive struggles taking place amongst the advertising industry’s clients had analogs within the advertising industry. Newspaper publishers competed horizontally against other publishers for advertisers’ business, which in part meant competing for readers whose attention they could sell. Likewise, billposters competed against other billposters for advertisers’ business, which in part meant competing for the most visible billboard locations – though to a great extent billposters resolved this competition by securing local monopolies. Competition spilled across sectors: publishers competed against billposters (and billposters against publishers) over their respective shares of sellers’ advertising appropriations. Advertising agents and solicitors acted as intermediaries between the attention sellers and the advertisers who were the final buyers. In vertical competition, publishers and billposters struggled with the agents and solicitors over the size of their commissions. In what follows, I establish the characteristics of audience attention as a fictitious commodity in the sense defined by Karl Polanyi. I then outline the historical development of the outdoor advertising sector of what became a nationally integrated market in audience attention with a focus on how contradictions and competitive struggles over the surplus shaped the market. How Big Was the Business The scale of the access to attention market grew considerably in the late nineteenth century. It is hard to be more precise than this because the data for this period are so unreliable. The best aggregate data are for the print media sector, which grew from $39.1 million in advertising revenues in 1880 to $95.9 million in 1900. Rough but 4 reasonable estimates judged print media advertising to constitute approximately half of all advertising expenditures (Waldron 1903, p.158; Pope 1983, p.26). Data for an important alternative medium, poster advertising, are all but nonexistent. We know, however, that it grew from a medium used exclusively by traveling circuses, local theater, and patent medicines to a major advertising venue for large-scale respectable retailers and national manufacturers of branded goods. Billposting businesses detailed in the billposters’ leading professional journal are a sampling, not an aggregate, but they are suggestive. In the summer of 1900, the northern California outdoor advertising firm of Owens, Varney, and Green was posting approximately 150,000 sheets per month. They had boards in San Francisco (population 340,000), where they charged 12¢ per sheet per month and also in Oakland and a handful of small nearby towns where they charged from 5 to 7¢ per sheet, which would yield yearly revenues on the order of $150,000 to $200,000. There were approximately 40 cities of at least 100,000 population in which a billposter belonging to the Associated Billposters was at work, most of them charging at least 12¢ per sheet. A second tier of more than a hundred mid-sized plants in smaller cities would have been doing business in the tens of thousands of dollars yearly and 500 smaller-scale members of the national association were doing business on the order of several hundred to several thousand dollars a year (The Billposter-Display Advertising July 1900, pp.17, 28). In 1900, the American Tobacco Company spent $600,000 on billboard advertising of cigars alone (Sherman 1900, p.134). This indicates that circa 1900 the total revenues of the billposting industry were in the tens of millions of dollars a year, though smaller than publishers’ advertising revenues. The distributing business was also considerable. In Newark, New Jersey the distribution arm of the Newark Bill Posting 5 Co. moved an average of a half a million pieces per month in 1902 and in November of that year A. Van Beuren distributed 1.1 million pieces in New York City. In total, distributors moved billions of fliers, product samples, and advertising ephemera into people’s homes every year at prices that typically ranged from $1.50 to $3.00 per thousand (The Billposter-Display Advertising February 1902, p.9; March 1902, p.9; January 1903, p.18). Though the growth was notable, the effects of changes in the advertising industry are only partially captured by a dollar-and-cents accounting of its growth. We know that manufacturers and merchants were spending more
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