The First Advertising Agencies

“The American apparatus of advertising is something unique in history[;] … it is like a grotesque, smirking gargoyle set at the very top of America’s sky-scraping adventure in acquisition ad infinitum.”

JAMES RORTY, OUR MASTER’S VOICE, 1934

Until the 1830s, little need existed for elaborate advertising, as few goods and products were even available for sale. Before the Industrial Revolution, 90 percent of Americans lived in isolated areas and produced most of their own tools, clothes, and food. The minimal advertising that did exist usually featured local merchants selling goods and services in their own communities. In the United States, national advertising, which initially focused on patent medicines, didn’t start in earnest until the 1850s, when railroads linking the East Coast to the Mississippi River Valley began carrying newspapers, handbills, and broadsides—as well as national consumer goods—across the country.

The first American advertising agencies were newspaper space brokers, individuals who purchased space in newspapers and sold it to various merchants. Newspapers, accustomed to a 25 percent nonpayment rate from advertisers, welcomed the space brokers, who paid upfront. Brokers usually received discounts of 15 to 30 percent but sold the space to advertisers at the going rate. In 1841, Volney Palmer opened a prototype of the first ad agency in Boston; for a 25 percent commission from newspaper publishers, he sold space to advertisers.