Okay we know the stop-action animation freakfest (I'm afraid of moving inamated objects... didn't go into "It's A Small World" ride last July at Disneyworld) and the song but it all started with a Macy-esque department store called Montogomery Ward. They asked Robert L. May to come up with a promotional Christmas story to give to costumers. May went with an underdog story and considered Rollo and Reginald but ultimately went with Ruloph and wrote the story in verse. May's boss wasn't so happy with the red nose (because perhaps it would be mistaked with a drunked oaf) but once the drawings were made, it was approved.
Although it was wartime, a total of 6 million copies of the Rudolph booklet went from 1939 to 1946. Post-war, there was demand for licensing of the character and May unfortuantely got on royalties because Montgomry Ward owned the character. He pleaded to the corporate president to get the rights (because he was deep debt from medical bills for his wife's terminal illness which she died of around the time Rudolph was created) and did in 1947, a nine-minute cartoon was made and his brother-in-law Johnny Marks mad ethe song and it was recorded in 1949 and the rest is history.