Ad People at Cannes Are Blind Men Feeling an Elephant — 8 of the Questions They Argued Over Are Worth Your Attention

Maybe it all has to come back to the most basic question: what is creativity, really?

What happened at this year's Cannes Lions?

After a week of noise, the 2017 Cannes Lions International Festival of Creativity ended last Saturday: tens of thousands of advertising people threw parties, gave speeches with wine in hand, and picked the most creative advertising of the past year — as they do every year. There was the hit, Meet Graham, which swept 10 major awards; there was Ogilvy, the creative agency whose work took home 140 Lions; and there was the most pleased brand of all, Burger King, whose campaigns collected 76 trophies.

If not for one statement from Publicis Groupe CEO Arthur Sadoun, this year's advertising party might have looked no different from any other.

On June 20, Sadoun — three weeks into the job — dropped a "bomb" on Cannes. To save money, he ordered, every company under Publicis would be barred in 2018 from entering any advertising award, advertising festival, music festival, or other "promotion event."

Publicis is France's largest communications group, 91 years old, and the world's third-largest advertising group, after Omnicom and WPP.

The moment the news broke, shares in Ascential, the parent company of Cannes Lions, fell nearly 6 percentage points. On the ground, Publicis staff who had known nothing about their CEO's new policy put down their wine glasses and started phoning colleagues and friends back home.

In fact, plenty of advertising groups have been cutting what they spend during Cannes week; Sadoun's method was simply the most extreme. WPP, which had lost two big clients, sent only 500 people this year, half as many as in past years. Last year the British media group Daily Mail spent US$8 million to charter two giant yachts and an entire deck for parties; this year, with first-half revenue down 12%, it was conspicuously quiet and plain.

To open up new sources of money, Cannes chairman Terry Savage travelled to China a few months ago to talk about working with Tencent, and this year set up a "China Day" for the first time, inviting Sohu CEO Charles Zhang, pianist Lang Lang, internet celebrity Papi Jiang, and people from Baidu, Tencent, BlueFocus, Focus Media and Hylink to explain the Chinese market. China is the world's second-largest advertising market; last year Chinese work still accounted for only 2% of all Cannes winners, but the number of entries rose 10%, above the average.

Tencent and Baidu each carried home one gold, one silver and one bronze this time. On June 20, the Chinese delegates hosted nine talks and held forth on the digital economy, artificial intelligence, millennials and online entertainment. The title of the talk by Huawei chief marketing officer Zhang Xiaoyun may capture the mood of these companies best: China's Age of Ambition.

But apart from the Chinese companies, many of those attending gave off anxiety. Joanna Coles, chief content officer of Hearst, told qz.com: "A year ago you wouldn't have felt this much fragility and sensitivity here."

Last year ad people were still talking about tech companies taking over Cannes; this year they have more to worry about — whether creativity can produce growth, whether the chase for traffic has overtaken creativity, how to deal with fake news and faked data. We have gathered the eight questions the advertising industry cares most about right now, and asked eight people who came to this festival — from ad agencies, consultancies and tech companies — to answer them one by one.

Marketing is moving from "cost center" to "profit center." Where should the money go?

Arthur Sadoun's reasoning behind the awards ban is not hard to follow. Set against creative work whose effect nobody can pin down, more and more advertisers today care about one thing only: growth.

Wang Xiaofeng, a senior analyst at the market research firm Forrester Research, told QDaily: "The marketing department is turning from what used to be a cost center into a profit center, and marketers increasingly have to answer for business results."

This year entries to Cannes were down 4.5% from last year, but entries for the effectiveness Lions jumped 59%. The Grand Prix in that category went to the Art Institute of Chicago, which rebuilt a bedroom from a Van Gogh painting in real life and rented it out on Airbnb; the US$31,000 project earned the equivalent of US$6 million in media exposure, and the museum drew its highest visitor numbers in 15 years.

Entries for the effectiveness Lions are by invitation, so the jump does not tell the whole story. Still, Kazuhiro Shimura, Dentsu's global creative director and a juror at Cannes this year, said: "Look at the overall trend and you really do see more and more entries made by teams the client and the agency put together jointly."

Marc Pritchard, chief brand officer of P&G, who spent the past year firing broadside after broadside at the advertising business, came to Cannes; the core of his speech was that everyone should spend their money where it counts.

"The advertising industry spends roughly US$600 billion a year and gets back a negligible rate of sales growth."

"What we need is better advertising and media content that can drive growth. We need a transparent media supply chain, so we can strip out all the waste and invest in growth."

Last Friday the organizers announced a new advisory committee. Its first members are not the traditional 4A agencies but Burger King, Unilever, P&G and others, and the committee will go on shaping how Cannes is run.

There is no denying that the commercial effect of creative work is becoming more important.

Forrester Research's figures say 30% of CMO jobs worldwide will become redundant in 2017, chiefly because the job itself has to change. Coca-Cola's decision this March to rename its CMO (chief marketing officer) the CGO (chief growth officer) is not a one-off.

"In the short term, marketing will pay more attention to ROI. In the long term it has to get every department in the company moving together, so that marketing genuinely serves the business instead of being only a cost center."

Zheng Hong, President of International Business, BlueFocus

"The change in the CMO shows up in two places: they have to answer for business results, and they have to be customer-centered rather than product- or service-centered. A company's CMO should be responsible for the customer experience."

Wang Xiaofeng, Senior Analyst, Forrester Research

What companies want feeds straight through to creative people. David Droga, founder of the New York creative agency Droga5, received Cannes' lifetime achievement award this year, and what he said explains something:

"I used to try to sell things on creativity alone, and if people didn't understand my idea I'd get angry about it. But now, as a client myself, I won't pay for creativity alone. What a client needs is the right answer: what is good for the business, what meets the need."

Everyone is talking about traffic. Is creativity being slighted?

At last year's Cannes Lions, Randall Rothenberg, president of the Interactive Advertising Bureau (IAB) in the US, said the advertising industry had "fallen completely under the control of targeting and digitization."

"We forget — consumers are not targets, they are people, and they have more control over the media they look at than ever before. We need to go back to the foundations of this industry and embrace creativity. The next generation of advertising cannot rely on disruptive tricks; it has to give people an experience that is pleasurable, informative or useful."

"Only creativity can turn traffic into influence. Without it, traffic is just a mob." Ellen Hou (Hou Jingwen), CEO, Carat China

Unfortunately, the argument between traffic and creativity is still running. Stars and influencers with enormous followings seem to have become every brand's favorite: Gigi and Bella Hadid, sisters with 30 million Instagram followers, turn up again and again on the runways of MaxMara, Fendi, Versace, Bottega Veneta and Moschino. In China, Yang Mi is called the "queen of moving product," and "traffic idols" like Kris Wu, Yang Yang and Lu Han seem to sign a new endorsement deal every day.

"Anything that helps marketers grab a lot of attention easily becomes hot," said Morihiro Harano, who has 20 years in the business and now runs the Japanese independent creative agency Mori. We have written about many of his campaigns before. "They always find a way — using a popular influencer, for instance. But what matters most is whether, in the end, they leave the customer with something meaningful, or change what the customer thinks after watching the ad."

Shortcuts to traffic carry risk, of course. Pepsi's new ad starring the model Kendall Jenner was pulled less than a day after it went up on April 4 this year, because it handled a political subject clumsily and papered over social conflicts that were still raw; it was seen as "using people's pain to sell soda."

Almost everyone we interviewed said traffic and creativity should not be an either-or but should support each other — and none of them had a good remedy for the way things are.

Morihiro Harano thinks "traffic first, creativity second" may be a stage the advertising business has to pass through as it digitizes. "It is easier to set standards for measuring traffic. What is easy to measure also tends to attract attention and end up popular, while only a few people can make genuinely creative work, so that work has trouble becoming mainstream."

But the traffic ad people now put their faith in has problems of its own.

How do you fix fake news and faked data?

On the third day of Cannes, a report from Ogilvy showed that among the 250 reporters and editors it surveyed, Facebook (33%) had passed traditional media (32%), Google (15%) and Twitter (4%) to become their leading source of news.

Which is why, as late as this May, with Facebook admitting for the tenth time that it had gotten its advertising numbers wrong, advertisers still could not give up the platform.

On June 19 and 20, David Remnick, editor of The New Yorker, and Mark Thompson, CEO of The New York Times, opened fire on Facebook in two separate Cannes talks. Remnick argued that at this point in the information age, fake news of all kinds has piled up like pollution into a "bullshit mountain"; Thompson called digital advertising a "nightmarish joke". "Everything is out of control, and there are middlemen peddling misinformation everywhere. It is hard to find a more dangerous environment for brand marketing than this."

The latest report from the Association of National Advertisers (ANA) and the ad-fraud detection company WhiteOps puts US advertisers' losses from fake traffic at a projected US$6.5 billion in 2017. No comparable count exists for China, but the real picture there may be worse.

When a Digiday reporter asked Thompson whether ad technology was the root of all this, he said the problem came mainly from people's attitudes. "The whole digital media world is too besotted with buying audiences, and what it has bred is a deformed ecosystem. All of it goes back to people deciding, at the start, that content no longer mattered."

The irony is that "content marketing," native advertising included, now gets more attention than ever, while brand safety has been left in a more dangerous spot. This March a long list of companies — Pepsi, Walmart, Starbucks among them — pulled their advertising from YouTube, and P&G still runs nothing there, precisely because it worries that negative content on the site will damage its image.

Because these problems involve technical fixes, personal self-discipline, ethics and data auditing all at once, they look especially stubborn. Zheng Hong, president of international business at BlueFocus, sees faked data as the disorder that comes when "innovation runs ahead and the rules lag behind." Beyond leaning on third-party measurement firms, everything else may come down to what Forrester Research senior analyst Wang Xiaofeng described: "brands that keep getting more sophisticated," and "effective industry oversight and the establishment of laws and regulations."

On June 9, GroupM, the media investment arm of WPP, joined the China Media Assessment Council (CMAC) in Shanghai to launch a "Brand Safety Initiative." Brands signed up so far include advertisers such as L'Oréal and Nestlé, along with media platforms such as Tencent and iQiyi. Rob Norman, GroupM's global chief digital officer, thinks faked data is a problem that has to be solved in stages.

Advertisers pay money, and in return they should be assured that their brand message reaches its target audience in a safe, responsible environment. Over the past year the whole industry has worked hard to improve the integrity of the digital supply chain, and it has made some progress. But this is a complicated problem, and it has to be weighed together with fraud, viewability, measurement standards and ad blocking.

Rob Norman, Global Chief Digital Officer, GroupM

Unilever took a more constructive line. At a panel on the sixth day of Cannes, chief marketing officer Keith Weed argued that the blame for brand-safety problems should not fall entirely on negative content on Google and Facebook.

"Some marketers may have realized they weren't doing as well at buying media as they thought. It's easy to say it's somebody else's fault, rather than say, 'I should have bought different media.' Companies should fix these problems rather than pull out [their advertising]."

When does the Google–Facebook duopoly break?

"To my mind, Google and Facebook are both media companies, not tech companies. They have to take responsibility for what they publish; they can't dodge it."

WPP CEO Martin Sorrell used an interview at Cannes to repeat his worry about the "duopoly" in digital advertising.

On the beach in front of the Palais des Festivals, the main venue, the Facebook and Google tents were again the biggest and the brightest this year.

The two companies control 75% of digital advertising worldwide, but as noted above, the transparency they offer is out of all proportion to their soaring advertising revenue.

New threats are already showing themselves. Every visitor who steps onto the Cannes beach is turning over the same question: who will be the third party to win a voice?

Outside the main entrance this year, the first thing you saw was Snapchat's giant yellow Ferris wheel. This internet upstart, which completed its IPO in March, is preparing to roll out its advertising business in full. Shortly before, it had bought the advertising data analytics company Placed, hoping to prove its worth as a medium to clients.

But before it could turn traffic into money, Snapchat ran into trouble with its own user growth; its market value shrank by US$10.6 billion, and it does not yet look qualified to be the next giant.

Twitter's investment in content has only just begun. BAT can take 18.5% of the mobile advertising market (Google and Facebook together have 56.1%), but for now it is strong only inside China.

Given all this, Sorrell thinks Amazon may be the future third player. Interviewed by the Financial Times, he said that after buying the supermarket chain Whole Foods for US$13.4 billion, Amazon "could strengthen its influence [in advertising] and further shape how WPP's clients allocate their budgets."

According to The Wall Street Journal, citing people familiar with the matter, Amazon's advertising team held a meeting last Wednesday in a private room at Cannes — the same place where Sorrell gave his speech.

eMarketer forecasts that Amazon currently accounts for just 0.8% of global advertising revenue of US$1.81 billion, but that its US advertising revenue will pass US$1 billion this year, higher than Snapchat's earlier revenue estimate.

At an earlier WPP earnings call, Sorrell said: "Amazon's penetration into most sectors is, if not terrifying, certainly very frightening."

"There is no contest, there is cooperation. Being data-led does not mean moving away from human nature — Google, Facebook and BAT are all platforms, and creativity and content that understand human nature are exactly what they crave. The main challenge is how the two sides cooperate and combine more effectively, and raise efficiency." Ellen Hou (Hou Jingwen), CEO, Carat China

"Some new faces have joined, but for digital advertisers economic value is gathering around a small handful of companies. Maybe six of them are multinationals, three are BAT, and a few more are the dominant players in each major market. For the 'niche' players with loyal followings especially, the challenge is how to win alongside the winners, and to find ways to divide up what value is left.

Google, Facebook and Amazon really are the biggest players in their own fields, but for brand builders and multichannel retailers there are still plenty of opportunities." Rob Norman, Global Chief Digital Officer, GroupM

Where is the line on product placement? China is the market most worth discussing

In 2016 Cannes added a new category: the Entertainment Lions, for outstanding audio and visual entertainment marketing content made by brands. This year's Grand Prix went to a 17-minute film made by a bank.

The film, Beyond Money, tells a story out of Black Mirror, and drew more than 12,000 people to its cinema premiere. The Cannes jury called it "a rare piece of branded entertainment whose quality matches conventional entertainment films."

This is content marketing taken to its limit: a brand making high-quality advertising content itself. In most cases, though, content marketing still means ad people combing the market for so-called "top-tier content" with value — or, put another way, traffic — and then paying for it.

"From now on, I think product placement will work less and less. In the digital age, more and more people care about the value a product gives them, not which products appeared on television."

Kazuhiro Shimura, Global Creative Director, Dentsu

A May article in the advertising trade publication Adage, titled "China's Online TV Pushes Product Placement to Crazy Levels", described the situation with some foresight: "While the rest of the world is just starting to invest in content, China is already testing the limits of brand placement. How far can you go and still keep viewers from walking away? How many logos and product placements can you stuff into one show? The answer is: a great many."

The video that article carried was cut together from placement scenes in a number of popular web variety shows and web dramas, and less than a month later the Chinese version of Midnight Diner delivered a product-placement pileup of its own, on a scale that became a phenomenon.

China is not without good work. Among last year's Entertainment Lions gold winners was a short drama made by Taiwan's Uni-President, Little Time Noodle Shop (《小时光面馆》) — two seasons, 10 episodes in all, three to five minutes each — whose idea owes something, more or less, to Midnight Diner.

When we put this question to ad people at Cannes, they said overseas markets look rather different. In the US, for instance, video sites like Netflix switched on paid subscriptions early, so their own programming does not often carry product placement.

YouTube launched its paid subscription channel, YouTube Red, only last year, and it was not until this year's Cannes that Susanne Daniels, who runs the division, announced it would soon put out more original content sponsored by advertisers.

On June 19, Daniels brought the singer Demi Lovato onto the stage with her, as if she were the embodiment of YouTube's entertainment.

"Advertising should be shown in a way that is obvious, otherwise it is deceiving the audience. Once consumers start to question the ethics of content — or, to put it another way, once 'consumer-centered' becomes common sense in China's advertising industry — that questioning will roll up like a snowball. Many countries have been through this stage," Morihiro Harano said.

What social responsibility should creative work carry while still serving a brand's commercial needs?

Of all the winners announced at Cannes, Morihiro Harano's favorite was "Fearless Girl."

"It takes up gender equality, a thoroughly modern question, and it shows a leading-edge grasp of media — everybody likes taking a selfie. And yet what it produced was a bronze statue, ancient and plain."

The bronze statue, "Fearless Girl," was commissioned by State Street Global Advisors and conceived by McCann New York. The girl looks six or seven, hair in a ponytail, chin up, hands on her hips, with a plaque at her feet reading: "Know the power of women in leadership. SHE makes a difference." On the eve of International Women's Day she appeared without warning, in a posture of defiance, in front of Wall Street's Charging Bull, to make people think about gender equality.

"Fearless Girl" won 18 Lions at Cannes in all, including three Grand Prix — in Glass, PR and Outdoor. State assembly members and members of the public even called on the city government to let it stay permanently.

Work like "Fearless Girl" that takes up social questions made up a share of the Cannes shortlist that was 31% larger this year.

At the Palais des Festivals you might come across Weber Shandwick chairman Jack Leslie sitting with Nobel laureate and Colombian president Juan Manuel Santos, looking back on Colombia's civil war and talking about world peace; or hear the British actress Helen Mirren discuss how to define diversity at a forum run by France's L'Oréal Group.

Unlike the sitting CEOs who have business to worry about, Maurice Lévy, the just-retired chairman of Publicis, sat with IMF managing director Christine Lagarde and talked about "how creativity can change the world."

"Creative work built on public-good themes can drive business growth by shaping a brand's image. If you think it can drive sales directly, you are badly mistaken. Companies that do not understand what a brand is should not try this kind of work lightly."

Morihiro Harano, Founder, Mori

Zheng Hong, president of international business at BlueFocus, told QDaily: "Social-good subjects do not conflict with commercial aims — on the contrary, they are very good at helping a brand win consumers' hearts. Microsoft's recent #changetheworld, stayinstem campaign lifted brand favorability by 18%, where an ordinary campaign usually manages about 2%. Or take P&G's Ariel brand: through the #sharetheload project it launched in India last year, it raised brand awareness by 132%."

Gender equality, diversity and other social questions are also the advertising industry's own problems. The research organization Geena Davis Institute on Gender in Media studied more than 2,000 ads submitted to the Cannes organizers over the past 10 years. By its published figures, men get four times as much screen time in advertising as women, and one in every 10 female characters in advertising is dressed to show skin.

Twitter's global creative director, Jayanta Jenkins, knows the feeling. In his first job, he was the only Black person at the agency.

"What satisfies me most is that people don't define me by my skin color, they just see me as a creative who wants to do good work. This industry is still badly short of diversity: we sell to all kinds of different people, yet the people sitting in the room all look alike. Companies like Nike, Twitter, Beats and Apple benefit from cultural diversity. If people can understand each other, without splitting themselves into 'us' and 'them,' we will certainly be able to build a company that can keep running for more than 200 years and bring people together."

In the age of mobile advertising, what makes good creative work?

In a media environment driven by traffic, increasingly complicated, and increasingly dominated by tech companies' voices, Cannes — built to honor creativity — looks a little dim.

At a June 23 Cannes panel called "Using New Media to Build Interactive and Emotional Connections With Fans," Mastercard chief marketing officer Raja Rajamannar reeled off a string of numbers: "At the end of the fourth quarter of 2016, there were only 198 active ad blockers in the world. By the first quarter of this year that number had shot up to 225 million. Clearly consumers don't want to see blunt advertising anymore."

P&G chief brand officer Marc Pritchard again said at Cannes that he wants the creative quality of brand advertising raised.

What counts as good creative work in future may be worth discussing again today, and we put the question to five people in the business.

Rob Norman, Chief Digital Officer, GroupM

Learn to compete for consumers' attention in a low-attention world. As buyers of ad inventory ask sellers for more "viewability," consumers will push brands to improve the "watchability" of their creative work;

meet the demands of both marketing cost and measurement standards in an environment where the form and function of creative work keep shifting;

stay flexible enough to satisfy what each segment asks for, while making sure nothing contradicts the brand's overall value proposition;

and create new layers of content for the e-commerce environment.

Jayanta Jenkins, Global Creative Director, Twitter

"Creativity has nothing to do with the medium. Creativity is storytelling, and that goes back to the Stone Age. The mobile phone has changed how we spread stories and the shape stories take, but it has not changed what makes a good story.

Creatives need to keep in mind the new dimensions the mobile era has brought, but more important is how you make sure the message you deliver stands for a brand, stands out, and catches people's brief attention on social media and mobile platforms."

Zheng Hong, President of International Business, BlueFocus

"Tell a good story, and return to human nature. In a fragmented age people slip more easily into a fast-food state of mind about consumption, so telling a moving story matters all the more.

The explosion of information in the mobile era, and the interaction that comes with it, means good creative work has to be more direct and has to take the user's experience into account."

Kazuhiro Shimura, Global Creative Director, Dentsu

"In future, what agencies produce will no longer center on methodology. They will need a sharp eye for the issues that move people, rather than just applying the various methodologies of advertising theory."

Morihiro Harano, Founder, the independent creative agency Mori

"Show 'a slightly better future.' That is the definition of creativity and of a good idea, and it holds everywhere."

Why are 4A agencies only now debating what awards are worth?

Finally, let us circle back to Publicis's decision to walk out of Cannes.

Jeff Goodby, chief executive of the San Francisco agency Goodby Silverstein & Partners, was the only agency head willing to comment on that withdrawal in a press interview.

"The first thing I thought of was that it would affect recruiting. If you don't win awards, people are less likely to want to work for you. That is the only way our creative department can prove what it can do," he told Adweek.

Chasing novelty in creative ideas until you lose sight of what the client actually needs is a subject the well-known talk-show host Donny Deutsch was already joking about 15 years ago. But one reason 4A agencies still refuse to give up award shows is that awards remain their key measure for attracting talent and proving their ability.

More important, though, Publicis's results last year did not look good. The group posted a net loss of €527 million; on top of fee cuts from big clients like P&G and Coca-Cola, it also spent heavily buying and merging the two digital agencies Razorfish and SapientNitro.

To take on three challenges — low growth, cost pressure and rebuilding trust in the brand — Publicis launched a business strategy called Power of One 18 months ago, reorganizing the group into four functional units and merging its six media agencies into four. The money saved by skipping award shows, Publicis plans to put into "Marcel," a platform meant to coordinate its 80,000 employees as an HR system.

Jose Papa, managing director of Cannes Lions, feels somewhat hard done by. In an email to Business Insider he explained: "A two-day pass to the festival is only €1,595, and attendees under 30 get 45% off. Speakers who want to give a talk pay nothing, and accommodation in Cannes isn't expensive either."

But by Business Insider's arithmetic, an agency that sends 200 people will spend €1 million before anyone boards a plane: €1,500 a head for tickets, plus a €500 entry fee for each of 1,500 award submissions.

€1 million is not much for a multinational group — some even joked that Publicis CEO Arthur Sadoun's own annual pay already runs to €7 million.

So how about we listen to the clients?

John Immesoete, creative director at the agency Epsilon, described one client's complaint in his personal column: "You agency guys come see me and tell me how many Cannes awards your team has won, and how many you can win for me... That is exactly what I hate about you."

That may be a little extreme, but the festival's gold plating is not worth what it used to be. Winning an award may no longer matter much; good creative work still matters, and is still needed.