Justplainbill's Weblog

July 6, 2016

Declaration of Independence, some history, by Gary North, PhD [nc]

Filed under: Political Commentary — justplainbill @ 8:39 pm

The Declaration of Independence: America’s Most Famous Direct-Response Ad
Gary North – July 04, 2016
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On this day 240 years ago, New England’s most famous independent wholesaler, John Hancock, and Congress’s stenographer, Charles Thomson, signed a parchment. We celebrate that signing annually, often by setting off low-tariff fireworks imported from China.

Most Americans know little about the background of this event. The details they recall from a high school textbook are incorrect. There is great confusion. The amount of misinformation is shocking. I am here to clear up some widely held misconceptions. (Note: I have a Ph.D in colonial American history. I have also been involved since 1974 in direct-response marketing. As far as I know, no one else has combined these two careers.)

HISTORICAL BACKGROUND

In 1776, Hancock was well known to consumers in New England as a highly price-competitive wholesaler. His main competitor, the British East India Company, called him a smuggler. That’s what high-cost competitors who are losing market share often do. They smear the competition. This accusation went to court, but it was was not proven. His defense attorney had been John Adams.

Hancock’s competitor in 1773 had adopted a new marketing strategy. It cut prices to just below what Hancock could afford to meet. How? By persuading Parliament to cut import taxes on the company’s main item of commerce, tea. Only a small tax remained, which went to pay the salary of the governor of Massachusetts and a few officials.

Next, a group of Hancock’s associates who operated out of the Green Dragon Tavern responded by throwing the competition’s tea into Boston harbor. So, Parliament closed Boston’s harbor in 1774.

The debate grew more heated throughout 1774. British tea was now cheaper than the duty-free but illegal Dutch tea, which Hancock imported. But there was a solution: a highly successful direct-response marketing campaign run by Hancock’s long-term associate, Sam Adams. Adams had a serious marketing problem. He had to persuade people that reduced taxes and lower tea prices were a threat to liberty. This was a hard sell. But Adams was up to it. He ignored the obvious: low taxes and low prices are a good thing. Instead, he warned readers that Parliament could close every port. He also skipped over the reason why the Parliament closed the port: protesters had thrown private property into the water. In today’s money, this was over a million dollars’ worth of tea.

Beginning in 1772, Adams had begun putting together an in-house mailing list known as the Committees on Correspondence. The letters began going out. Incredibly, outraged readers began a national boycott against low-cost British tea. It another context, this would be called cutting off your nose to spite your face.

I realize that this is not the way all this is described in textbooks. This is a tribute to the effectiveness of Adams’ direct-mail campaign. There is even a movement called the Tea Party that has adopted the name given to the event in the 1830’s. The Tea Party is for lower taxes.

So was Parliament in 1773.

The entry for “Boston Tea Party” on Wikipedia describes things accurately.

The North ministry’s solution was the Tea Act, which received the assent of King George on May 10, 1773. This act restored the East India Company’s full refund on the duty for importing tea into Britain, and also permitted the company, for the first time, to export tea to the colonies on its own account. This would allow the company to reduce costs by eliminating the middlemen who bought the tea at wholesale auctions in London. Instead of selling to middlemen, the company now appointed colonial merchants to receive the tea on consignment; the consignees would in turn sell the tea for a commission. In July 1773, tea consignees were selected in New York, Philadelphia, Boston, and Charleston.

Hancock was New England’s #1 middleman for tea. He was cut out of the deal.

The British East India Company now had a new marketing slogan. “Lower taxes. Lower prices.” (Walmart’s recently adopted slogan is similar: “Save Money. Live Better.”) Hancock had to do something, and he had to do it fast. Fortunately for Hancock, Sam Adams was up to the task.

Back in 1765, Adams had helped organize a regional sales force, the Sons of Liberty. This group had made tax collectors offers that they simply could not refuse. He had recruited Hancock into the organization. They had worked together ever since. Adams had revived the organization in 1774. It called for a boycott of tea sold by retailers for British tea. This campaign led to the first Continental Congress in September.

Adams was highly successful in politics, but in nothing else. So, honoring market responses, he specialized in politics. He had been a beer brewer, but he had gone bankrupt. (The successful beer company named Sam Adams took the name of a man who had been a complete failure as a brewer. This would be like calling a company two centuries from now “Enron Securities.” But good marketing can accomplish miracles, as I am trying to demonstrate here.)

Adams had also been a tax collector, but had failed to collect all of the required taxes. He got out of the field. This is something that he had in common with a recent immigrant from England, Thomas Paine. Earlier in the year, Paine had proven himself to be a highly skilled practitioner of direct-response marketing. His January 1776 marketing campaign was based on a classic long-copy ad with this headline: Common Sense. The campaign pulled spectacularly. It still does — a phenomenon known in the direct-response trade as “drag.” From Wikipedia:

It was sold and distributed widely and read aloud at taverns and meeting places. In proportion to the population of the colonies at that time (2.5 million), it had the largest sale and circulation of any book published in American history. As of 2006, it remains the all-time best selling American title, and is still in print today. . . .

The pamphlet was also highly successful because of a brilliant marketing tactic planned by Paine. He and Bell timed the first edition to be published at around the same time as a proclamation on the colonies by King George III, hoping to contrast the strong, monarchical message with the heavily anti-monarchical Common Sense. Luckily, the speech and the first advertisement of the pamphlet appeared on the same day within the pages of the Pennsylvania Evening Post.

Paine’s marketing was revolutionary. Literally.

Summary: In July 1776, Hancock was in charge of a national marketing campaign against the British East India Company. Yet the company was never mentioned. Officially, he was fighting Parliament. This was why he signed the parchment.

What was odd about the document was that it never mentioned Parliament. It only mentioned the king, who had almost no power, and who had not been involved in Parliament’s decision to cut the tax on tea. He had dutifully signed the bill when it was handed to him — a strictly formal procedure. He had remained on the sidelines until the Green Dragon boys tossed tea overboard. This attack on private property angered him. He thought it was mob violence, just as it had been a decade earlier with Adams’ Sons of Liberty. So, he closed the port of Boston when Parliament demanded this action. He sent ships to enforce this joint decision.

Hancock had great name identification, so he wrote his signature large enough to be eye-catching, but not so large as to generate envy among his associates — he hoped. He wanted to head off murmuring: “Pretty fancy signature for a smuggler.”

He need not have worried. His peers did not want to put their John Hancocks on the document — not yet, anyway.

THE MARKETING CAMPAIGN

The ad is a classic example of what is known as “reasons why” advertising. It was filled with reasons why it was time to create an independent franchise operation. It targeted the king.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

And so on. It was a long list. It lacked only bullet points. But by July 4, 1776, it did not lack bullets.

The ad had an inauspicious headline:

In CONGRESS, July 4, 1776, A DECLARATION By the REPRESENTATIVES of the UNITED STATES OF AMERICA, in GENERAL CONGRESS assembled

This was not the stuff of high-response-rate advertising. The headline accounts for about 80% of an ad’s effectiveness. A good headline promises benefits. The copy did not get to the benefits until the second paragraph: Life, Liberty and the pursuit of Happiness. These are good, of course, but they are general. A good ad needs specific benefits. The other two benefits were also overly general: Safety and Happiness. Still, this was better: not just the pursuit of happiness, but actual happiness. “Pursuit” is too vague.

Nevertheless, this document turned out to be the most important direct-response ad in American history. Had it not been effective, the two signers would be known in textbooks on British history as agents of a failed marketing campaign that led to a legendary bankruptcy. The two signers fully understood this at the time.

Discretion is the better part of valor. There were about 54 other men who approved of the document, but who chose not to sign it on July 4.

There was a good reason for this. In direct-response advertising, you had better do a test mailing. Only after the preliminary results are in do you do a full roll-out. If you violate this rule, the response could, as experienced copywriters like to say, get you killed.

The assembled co-signers fully understood the risks of a poor response to the mailing. So, they held off signing. They told the two signers: “You go first.”

About 200 copies of the ad were sent out the next day. John Dunlop printed them. They were printed as posters, called broadsides. You can see the broadside here. They went to state legislatures around the country. The mail was slow in those days — much slower than snail mail is today. So, they waited.

The initial response was favorable. So, on August 2, the participants took a vote:

Resolved That the Declaration passed on the 4th be fairly engrossed on parchment with the title and stile of “The unanimous declaration of the thirteen united states of America” & that the same when engrossed be signed by every member of Congress.

The resolution passed. So, they signed their names. Anyway, most of them did. Not all. These did not: John Alsop, George Clinton, John Dickinson, Charles Humphreys, Robert R. Livingston, John Rogers, Thomas Willing, and Henry Wisner. But they were offset by men who had not been involved in planning the details of the national marketing operation, but who had come onto the Board of Directors after July 4. They had been involved regionally: Matthew Thornton, William Williams, Benjamin Rush, George Clymer, James Smith, George Taylor, George Ross, and Charles Carroll of Carrollton.

The entry for August 2 reads: “The declaration of Independence being engrossed & compared at the table was signed by the Members.” This new name, “declaration of independence,” had a better ring to it than the original. They hoped that this would increase the response rate.

Even so, a record of the vote was kept only in a second set of minutes. Charles Thomson, who died in 1824, decided not reveal the existence of these secret minutes for over 40 years. A man can’t be too careful. They were released in 1821.

As I said, these were men of discretion. They were still not ready to do a large mailing. They also wanted to have a receptive audience. The market in August was poor, as is typical for direct-response mailings. The previous winter, the company had done a test marketing program in Canada, which had failed. The survivors had retreated to New York by June. The group had been led by one of the promising sales directors, Benedict Arnold. Nevertheless, the company still had high hopes for him. He looked like a comer.

The next test came soon: on August 27. The results almost produced bankruptcy. The Director of Marketing, G. Washington, had organized a trial run, and after the trial, he and his associates ran. Actually, they sailed under cover of darkness and a seasonally rare fog. They left Long Island hurriedly.

So, they waited.

On December 26, the most successful post-Christmas sale in American history took place in Trenton, New Jersey. Washington and his associates presented a group of 1500 Hessian tourists with an offer they did not refuse.

On January 18, corporate headquarters sent out printed copies of the signed document to the state capitals for local distribution. This handout did quite well.

BURIAL AND RESURRECTION

As with all direct-mail campaigns, response rates fell off rapidly because of repeated mailings. The document went into obscurity by late 1777. But some recipients kept copies of it in their files. In direct-response marketing, these are called swipe files. This term was certainly appropriate for the most famous swipe in the history of Great Britain. A wholly owned subsidiary went independent. It refused to honor the implicit and universally recognized non-compete clauses in the original 13 regional by-laws.

Then, in 1800, the old document was revived. There was a split in the leadership of the new firm. Two of the original signers were competing for CEO. One of them, John Adams, had been on the committee of five that had drafted the original document. He was competing against Thomas Jefferson, who had been assigned the task of writing the first draft. Jefferson’s supporters were claiming that their man had done most of the writing.

Adams faced the grim task of anyone who resorts to a “me, too” marketing campaign. The product that gets into the market first has a huge advantage, called the unique selling proposition, or USP. Jefferson had gotten there first. His supporters made this clear.

Adams was having a tough time in 1800. A few weeks before the election, one of the members of his faction, Alexander Hamilton, had distributed a long letter calling Adams’s character into question. It was too late to respond. Adams’ supporters could only grumble, “that bastard!” It did no good.

Jefferson won. And from that day on, he attributed much of his career success to his authorship of the first draft of the original direct-response ad. As he put on his tombstone:

Here was buried
Thomas Jefferson
Author of the Declaration of American Independence
of the Statute of Virginia for religious freedom
& Father of the University of Virginia

But I still think he could have come up with a better headline than “In CONGRESS, July 4, 1776, A DECLARATION By the REPRESENTATIVES of the UNITED STATES OF AMERICA, in GENERAL CONGRESS assembled.”

[For my detailed study of the Declaration of Independence, go here.]
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1 Comment »

  1. To compare the establishment of the United States of America to a direct ad campaign is denigrating and demeaning to the Founding Fathers implying it was a “for profit” effort. It appears to be more propaganda from the entrenched elites in academia in their efforts to overrule our history and our Constitution.

    Comment by Howard H. Wemple — July 7, 2016 @ 3:59 am


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