For years, the Chicago-based Montgomery Ward department store chain had been giving away coloring books as promotional gimmicks during Christmas. Some executive decided that they could save money by generating a giveaway booklet in house, so they tapped copywriter Robert L. May for the job.

The story of Rudolph is based on "The Ugly Duckling" and memories of childhood bullying. He rejected the names Reginald and Rollo, finally settling on Rudolph. But the executives balked at the idea of a red nose, fearing the association with drunkeness. So May dispatched his friend Denver Gillen, who worked in Montgomery Ward's art department, to the Lincoln Park Zoo to sketch some deer, and Gillen's drawings convinced the hesitant higher-ups.

The chain distributed 2.4 million copies of May's story in 1939 and despite wartime paper shortages managed to give away millions more. May's brother-in-law Johnny Marks turned the story into a song, but many singers were hesitant to mess with the Santa Claus legend. Finally, Gene Autry recorded it in 1949, and it became second only to "White Christmas" as the best selling song of all time. Most people know the Marks/Autry version and don't realize that Marks made some significant alterations to the story.

Another part to the story that many people don't know is that May was deeply in dept due to medical bills from his wife's illness, which she died from around the time of Rudolph's first appearance. However, Montgomery Ward owned the copyright to the story as he created it work for hire as an employee of the chain, so May didn't see a penny of the flood of money coming in. But a sympathetic corporate president, Sewell Avery, gave May the copyright in 1947, and May lived comfortably until he died in 1976.

A TV special narrated by Burl Ives appeared on the NBC show "General Electric Fantasy Hour" in 1964 and has become an annual holiday staple.

Sources: http://www.snopes2.com/holidays/christmas/rudolph.asp, http://www.tvparty.com/xmasrudolph.html