You may think the history of conversion rate optimization is relatively new but the idea has been around 100s of years and the actual process has been around since at least when Coca-Cola used this “free glass of” coupon in 1888:

The magic of coupons was that they allowed the business to see how compelling an offer was. If the offer was redeemed like crazy that was a clear sign it hit a nerve.

This opened up businesses to the idea of advertising experimentation.

Advertising Experimentation

We need to return to Coca-Cola because these guys really did pioneer the idea of mass advertising. And because they were spending such massive amounts on advertising they needed a way to know if their ad dollars were doing the job. It was the wild wild west of mass advertising and companies like Coca-Cola, Proctor & Gamble, and Kellogg’s were leading the way.

Coca-Cola purchased space in national magazines for the first time in 1904. By 1911, the company’s advertising budget had skyrocketed to more than $1 million (source). That’s a lot of money.

The redemption coupon was what unlocked the flood gates and that’s what makes it the most important chapter in the history of conversion rate optimization.

And while forward-leaning companies and their ad agencies immediately saw the value of advertising experimentation, primarily using a device like a coupon most of the broader business community was unsure. Enter Albert Lasker.

Fuel on Fire

Albert Lasker reluctantly entered the world of advertising when in 1898 he accepted a job with the Chicago-based advertising firm Lord & Thomas.

After he worked as an office boy for a year, one of the agency’s salesmen left, and Lasker acquired his territory. During this time, Lasker created his first campaign. He hired a friend, Eugene Katz, to write the copy for a series of Wilson Ear Drum Company ads. They featured a photograph of a man cupping his ear. source.

Are you seeing how this story is going to progress? Basically, once Albert Lasker understood the power of the sales pitch he knew he had found his golden ticket.

Eventually, Albert met John E. Kennedy, a copywriter would change everything for Albert and the entire world.

John E. Kennedy’s simple insight was that advertising was ‘salesmanship in print’.

This seems like a simple enough idea but once it infects the brain it changes everything.

It gave birth to direct response advertising, the most efficient form of advertising.

Direct Response Advertising

A direct response ad is a marketing pitch that’s made directly to the end buyer where the effectiveness isn’t measured based on the quality of the ad or how engaging it is, the only metric for a direct response ad is the response.

Many ad men, who had spent their entire careers dazzling clients with creative campaigns hated the crudeness of a direct response ad. A good copywriter could, in one afternoon, whip up a compelling pitch, launch it the next morning, and within the next 30 days know if his (back then most ad men were, well men) idea was great or shit.

If asked you to spend $100 on a direct response where you’ll know if your idea had legs or $400 a month on a billboard where there is no way to measure conversions, which would you pick?

Business Implications

Businesses are in the business of taking $ and converting it into $$. And on that front, nothing produces a better ROI than this measured advertising approach. We continue this discussion about the business implication, and how this direct response coupon code format led to modern A/B testing here.