Every Method Is Failing: With the False Boom Over, Advertising Goes Back to Creativity | Cannes Lions 2018

The reality of digital advertising today — strip away the fashionable dressing of precise segmentation and retargeting, and digital advertising is simply this dull.

The Cannes Lions International Festival of Creativity, held in France every late June, is the advertising industry's Oscars. This year's edition was unusually quiet.

The concierge at Le Grand Hôtel, the five-star hotel on the beachfront, estimated that room bookings were down 20%. Before the festival even closed on Friday, many attendees had already flown home. Ad executive James Murphy got a call from the organizers telling him his agency, Adam & Eve/DDB, had won Agency of the Year for 2018 and asking him to come collect it — but he had gone back to London 24 hours earlier.

According to Adweek, several sources said attendance at this year's Cannes was down by more than 20%, and the number of creative works entered for awards fell from 41,170 in 2017 to 32,372.

This was the first year after Cannes Lions announced its reforms. WPP and Publicis, the world's largest and third-largest ad holding companies, had each pulled back — one halved its attendance last year, the other dropped out of Cannes altogether this year (to save money for building an AI assistant platform, it said). That forced the organizers to propose reforms, cutting the eight-day schedule to five days to lower the cost of attending.

The Cannes reforms are really a chain reaction set off by a run of industry problems. Every method of catching consumer attention in the digital world and turning it into a purchase seems to be failing, and advertising people face pressure from at least four directions: clients building their own in-house creative teams, consulting firms taking away more and more of the business, too much automated advertising and the fake traffic that comes with it, and consumers who have seized a voice of their own through social media.

For a long time, Cannes Lions has been seen as an industry party the industry throws for itself: by day, advertising people picked out the novel ideas — many of them ads with almost no commercial impact — and by night they partied on the beach. The "other Cannes" outside the Palais des Festivals has in recent years become a display case for whatever is squeezing the industry, with unusually heated argument about tech-company monopolies, market competition, the agency model, and fake traffic.

Two Junes ago, Rob Norman, then Global Chief Digital Officer of GroupM, told QDaily in an interview: "I think there are 'two Cannes' during this period. One revolves around creativity and the various awards handed out at the Palais des Festivals; the other consists of the conversations and discussions held in meeting rooms at the hotels along the Boulevard de la Croisette — discussions with media partners and clients that focus on the data and technology capabilities needed to reach and engage audiences with relevant messages."

This year, that sealed-off, optimistic mood was gone. The scandal-ridden tech companies were no longer as loud as before; the giant tents Google and Facebook pitched on the beach last year did not reappear. More of the people who came were from consulting firms and brands — the two groups that have spent the past few years taking on more and more of the work once handled by creative agencies. The organizers said that both consulting firms and brands sent double-digit percentage increases in people this year.

In a sense, the change in who comes to Cannes is the change in the industry itself: at first there were only creative advertising people; then media companies joined and took the biggest share of the profits; later the tech companies that control distribution and user attention invaded digital advertising in force, and took over the Cannes beach along with it. Now consulting firms have joined too, while brands — increasingly eager to take back control — are cutting ad budgets and restating their demand for growth.

The situation is not good. Over the past 12 months, share prices at the industry's four biggest holding companies — WPP, Omnicom, Publicis, and IPG — have all fallen, WPP by nearly 30%.

"The creative industry is at a critical moment," Havas CEO Yannick Bolloré said at the opening ceremony. "People need to think about how to carry on the creative tradition, and also about how to turn the creative industry into a business that is more relevant and more workable."

Duncan Painter, CEO of Ascential, the company that owns Cannes Lions, has said he hopes that over the next few years clients will spend more of their time at Cannes talking about what brands need from creativity and content.

Creativity and business were once two parallel things at Cannes. Now the first is being told, again, to drive the second.

Fake traffic showed up first at Facebook and Google, and it has made the industry's false boom impossible to sustain

On the first day of Cannes, Unilever CMO Keith Weed went straight at fake traffic, announcing that Unilever would never work with influencers who buy followers. Procter & Gamble had already cut $100 million from its digital ad budget and then said its sales had not been affected at all; what it cut, the company said flatly, "were all bots".

For Google and Facebook, which together hold 49.6% of the global digital ad market, this is a direct threat to the business. YouTube CEO Susan Wojcicki responded the moment Unilever's statement landed, calling influencers who buy followers "bad actors" on the platform and promising more transparency.

Over the past year and more, a string of digital-advertising scandals at the two companies has cost them the industry's trust.

Facebook admitted, one after another, to 10 errors in its advertising metrics, and in March this year the Cambridge Analytica scandal broke, turning users' private data into a tool for placing political ads. On Google's YouTube, ads were repeatedly placed beside videos full of hate speech and racism, and advertisers including Pepsi and General Motors then pulled their ads from the platform. There is also the fake-traffic problem, still unsolved: last July, Google refunded ad fees to millions of advertisers.

For several years running, "tech companies take over the Cannes beach" was a fixture in the headlines — Martin Sorrell even called it the "duopoly beach." This year, though, apart from a few executive speeches and scattered activities on the sand, Google and Facebook both avoided throwing big parties, and stopped timing the launch of major new ad products to the festival.

Keeping quiet was probably a public-relations decision. One attendee who deals with both companies told the trade outlet Digiday: "Given the current climate, I think they're well aware they can only make so much noise."

The industry's weariness with the digital-advertising duopoly has passed a tipping point. At Cannes you could hear plenty of people saying much the same thing: they are trying to get out from under Google's and Facebook's control.

David Shing, the "digital prophet" at Oath (the company formed by the merger of AOL and Yahoo), said the clients he talks to have lately been thinking about "going back to TV, because that's safe." LVMH CMO Mathilde Delhoume said: "It's very tempting to focus on short-term growth, but if that's all you focus on, you wake up with a terrible hangover and no brand retention."

The old excitement about big data and precision marketing has all turned into background noise, and the last straw came from government regulation.

On May 25, the GDPR (General Data Protection Regulation), a policy meant to protect users' data privacy, took effect across the EU — and turned out to be the ladder people needed to climb down from their data obsession. L'Oréal Chief Digital Officer Lubomira Rochet said recently that "50% of the names" vanished from the company's French database, but "we welcome it, because if your relationship with people isn't based on consent, that's bad for the brand." Domino's UK CMO Tony Holdway saw it as a clear-out of a brand's consumer base, leaving only the more active customers.

Open The New York Times website during Cannes and you saw nothing but dull property ads. Sebastian Tomich, who runs the paper's advertising business, said that is because Cannes is in Europe and the GDPR is doing its work. And that is the reality of digital advertising today — strip away the fashionable dressing of precise segmentation and retargeting, and digital advertising is simply this dull.

The Grand Prix in the Social & Influence Lions went to "Nothing Beats a Londoner," the campaign Wieden+Kennedy London made for Nike during the Winter Olympics. The Mayor of London and Drake both shared it of their own accord, and it set off a wave of imitations on YouTube. The judges said it had succeeded in "shaping culture."

Ad agencies are glad to pass the blame, and they have started talking about creativity again — and about how efficiently it gets made

The search began at least five years ago. Nike brought its social media operations in-house in 2013; Pepsi opened its own creative studio in 2016; and gradually almost every large company, consumer-goods brands above all, has been expanding its marketing department to take back control. But in terms of efficiency, these studios can only turn out ads that are decent at best, and the reach they can deliver falls far short of what a global company needs.

This April, Procter & Gamble, the world's biggest advertiser, took a further step: it brought several different ad holding companies together, asked each for talent, and used them to build itself a new creative agency, housed at P&G's own offices in New York and Cincinnati and dedicated to P&G's North American fabric-care business, which includes one of its most important brands, Tide.

P&G's attempt amounts to saying that the global synergy advertising holding companies have always emphasized no longer works.

At this year's Cannes, brands were still trying to solve that basic problem. The New York-based Association of National Advertisers (ANA) came to Cannes to hold the first meeting of its "CMO Growth Council," made up entirely of CMOs.

Twenty-five CMOs attended the closed-door meeting on the third day of Cannes, among them Marc Pritchard of P&G, Raja Rajamannar of Mastercard, Alison Lewis of Johnson & Johnson, Keith Weed of Unilever, Mathilde Delhoume of LVMH, and Tencent's Liu Shengyi.

"I'm a big supporter of ad agencies, but what I need is something that suits this new world," Weed said. "Not every ad has to be a classic."

What Weed was really describing is a problem with the agency model. In the past, a big company handed a message to an agency, which turned it into an ad and delivered it around the world through a media network built up over years. Today tech giants and consumers own the media and the right to speak for themselves, which has left the large-scale, coordinated agency model looking slightly deranged: at which point does a project need better creative work, and on which screen is one plain line of copy enough? Both have become open questions.

Take Unilever, whose brands include Dove and Lipton. Because the company owns about 400 brands, and especially for the big ones with annual revenue above $1 billion, once ad content enters today's badly fragmented media environment Unilever has to work with a dozen or more specialist agencies. Each agency sets out to create content suited to one particular medium, and the agencies compete with one another, so what Unilever ends up receiving is a pile of ad proposals that contradict each other. Weed calls this "the fragmentation of the brand."

Nearly every large ad holding company is now remaking itself into "one company," to prove to clients that it can deliver consistent, high-quality service. Put another way: once you seriously consider buying ads for a global market, even keeping the message consistent is a problem, never mind the creative.

We explained in detail not long ago, in our report on the resignation of WPP founder Martin Sorrell, how the efficiency that scale once delivered has slipped out of control. Clients used to have no choice but to rely on one enormous agency to place ads in different media, to different groups of people scattered around the world. But once algorithms and real-time bidding became the key, becoming the world's largest ad group in order to get a lower price mattered much less.

"It's not surprising — you have a different ego, a different P&L, and different objectives," Weed said. The hardest part of the job for his brand managers now, he said, is stitching together the different campaigns handed to different agencies. That is the problem almost every multinational faces when it advertises today.

Ad agencies are glad to push the fake-traffic problem onto the tech giants. What agencies are good at is creativity, and at planting that creativity in consumers' heads. But until they can distribute a message as efficiently as Google and Facebook, everything they do will keep being treated as a cost that can be cut.

The old excitement about big data and precision marketing has all turned into background noise

Publicis Groupe's staff and its ad entries were both absent from Cannes this year. Last year the group announced that it would take the budget it usually spends on the festival and put it into building an AI platform called Marcel — an internal tool meant to coordinate the group's 80,000 employees, picking individual people out of different subsidiaries to meet a client's needs. It is still in testing.

Publicis calls Marcel "revolutionary," even though internal corporate communication systems are nothing new. This infatuation with a technological fix is, at bottom, no different from the advertising industry's obsession with data analysis in recent years. As Omnicom CEO John Wren said at the Cannes opening ceremony: "We go all out, we spare no effort, trying to find the right person in the right context on the right platform. We use huge amounts of personal information to target consumers, and we've forgotten that the whole point of data and technology was to serve creativity."

Google and Facebook are no longer loud, but Cannes has learned to think the way they do — data and precise targeting before everything else.

McKinsey published a report at this year's Cannes saying that companies that combine data products with marketing see average annual revenue growth of 10%. The report, produced with the ANA, surveyed 200 CMOs and found that 70% were already using data analysis to help track their advertising.

Martin Sorrell, not long resigned as WPP's CEO, recently bought a shell company, S4 Capital, with which he plans to return to advertising. He said at Cannes that he had already drawn up a five-to-seven-year plan for S4 Capital, aiming to turn it into a company that uses data to drive creativity, even if that is not "the tradition of Bernbach [the founder of DDB] or Ogilvy."

All these arguments about data come down to the same aim: escaping the Google-Facebook duopoly and taking back the initiative. That goes not only for agencies and brands, but for other media giants too.

Guardian Media Group, Telegraph Media Group, and News UK, the backbone of the British newspaper business, announced at Cannes a joint online advertising venture called Ozone, where clients can buy digital ads across every title the three companies own, reaching about 39.4 million readers.

Another piece of news landed right alongside Cannes: AT&T, the U.S. telecom giant, having already bought Time Warner, announced last Monday that it was buying AppNexus, one of the largest independent digital ad platforms in the world. Brian Lesser, the CEO running AT&T's restructured advertising arm, said AppNexus's technology would help AT&T build a platform that gathers ad inventory from traditional and digital media at once. Lesser, formerly an executive at WPP's media agency group GroupM, talked about the deal at Cannes: "The future of the advertising business is the platform business."

Everyone wants to be the third platform after Google and Facebook, and everyone is using the same method: buy more media, and use technology to build a marketplace that connects with clients. Google and Facebook started doing this far earlier — Google's DoubleClick went live in 1996. The tech giants have more money and an easier time hiring good engineers, and with regulation tightening, running a digital ad platform is probably more expensive than it used to be.

They have started talking about creativity again — even the consulting firms that just arrived say so

"If you want to get noticed among the Cannes lions, the best way is to charter a yacht for the festival and throw a party in the harbor," yacht broker Alexander Coles told the trade outlet Morketing.

Consulting firms pouring into Cannes seem to have replaced tech companies as this year's new subject. Consultancies like talking about creativity too, and claim they care more about a company's growth.

In the Cannes harbor this year, the biggest yacht was chartered by Accenture Interactive. The consulting giant's digital ad arm won its first Grand Prix at Cannes this year: using 831 audio recordings of President Kennedy's speeches to reconstruct, for Time, the last speech he never got to give.

Accenture Interactive sent its largest delegation yet, 10 executives, and entered work in nearly every award category. The company's managing director, Anatoly Roytman, said its investment in Cannes had doubled this year, with the emphasis on getting creative people in front of clients.

Other consultancies made themselves felt too. IBM's digital ad arm, IBM iX, set up a stand on the Croisette twice the size of last year's, and Deloitte booked meeting rooms in two of Cannes' five-star hotels.

Every ad holding company executive interviewed at Cannes was certain to be asked the same question: are you worried about the consulting firms?

Most answers were noncommittal, but conceded that these competitors cannot be ignored. In Martin Sorrell's words: "Accenture and the rest aren't competing for $5 million accounts — they have their eyes on $200 million transformation projects."

Consulting firms have always been in this business. They often say they are not trying to replace ad agencies, but while striking the pose of "serving the CMO" they take agency work all the same. The digital transformation of traditional companies has become their opening. The core strength of Accenture Interactive's newly formed Programmatic Services division, for instance, is described as "in-housing": by setting strategy, buying marketing technology internally, and changing how a company operates, it ultimately helps advertisers take back control of their media.

In creative marketing, the work that looks most like what agencies do, consultancies also hold a distinct advantage. Paul Marcum, founder of the ad agency Big Finish Digital, said consultancies always win the pitch because brands see them as more "objective" and "results-focused," which makes it easier to get internal backing. Since last November, Accenture has taken the global marketing accounts for both Maserati and BMW.

"We will compete in some of the agencies' traditional businesses, but we will never go into others — media buying, for instance, which we think is in decline," Accenture CEO Pierre Nanterme said on the company's earnings call this March. "We're more focused on the fast-growing opportunities in digital marketing — brand and creativity linked together, driven by technology." Clients, he said, want global channel architecture and seamless experiences more and more.

Ad agencies are trying to move upstream into consulting as well. Among this year's winners you can already see plenty of solutions that shape a client's product directly. Take Xbox Design Lab, which won the Grand Prix for Creative eCommerce: McCann London's idea turned a DIY controller project that gamers initially mocked into something people found fun.

Xbox Design Lab

Social issues, of all things, have become advertising's way out in the age of consumerism

Finally, the creative work Cannes picked out this year.

Cannes has nine major award categories and 28 subcategories, but the one that best captures the year's direction in creativity is the Titanium Lions.

The Titanium Lions go to work "that changes the rules of the game, that breaks boundaries in brand communication, provokes argument and even envy, and points the industry in a new direction."

Six pieces of work won a Titanium Lion in 2018, and the category's Grand Prix went to the Palau Pledge. It was also the biggest winner at Cannes this year, taking seven trophies and the Grand Prix in three categories — besides Titanium, the other two were the Direct Lions and the Sustainable Development Goals Lions — which means this was an idea that worked, and one whose effects will last.

Briefly, the case. Palau is a Pacific island nation that lives on tourism, and its visitor numbers have grown sharply over the past three years. Its tourism authority wanted to protect the local environment — including the Rock Islands, already on the World Heritage list — while keeping visitor numbers up, since tourism matters greatly to Palau's economy.

But the Palau government had no media budget large enough to reach the global tourism market, so Host/Havas Sydney came up with a brilliant answer: permanently rewrite the country's visa-on-arrival procedure so that every visitor, at the moment the passport is stamped, has to sign a promise not to damage the local environment. In the first week after the policy launched, without a cent spent on advertising, heavy press coverage produced 1.7 billion free impressions. Over the next 10 years, all 2 million tourists entering Palau will sign the "Palau Pledge."

The Palau Pledge used a genuinely new form of communication to actually change people's behavior — and asking you to make a promise is itself a way of setting the agenda.

Cases built on social issues like this one became the mainstream among this year's winners, most obviously in the PR, corporate social responsibility, and Glass Lions categories. Candace Kuss, social media director at H+K Strategies and a PR Lions judge, said the strongest feeling she had while judging was "not having enough tears" — too many entries dealt with grave subjects: gun violence, racism, gender equality.

In fact, plenty of last year's Titanium Lions also went to social-issue work; "Fearless Girl" swept nearly every advertising award that year. And the Kenzo World fragrance ad won because, in the judges' words, "in the entire fragrance category, no product or execution had ever touched on rebellion coming from women at the bottom. In this category, most ads treat women as consumption machines."

The trend has been running for at least three years. From the Super Bowl to the Grammys to the Oscars, a wave of ads have talked about political questions, directly or indirectly.

The reason is simple, and closely tied to the whole marketing industry's difficulty in being heard in a digital environment: today only a subject that stirs argument can punch through the clutter of digital media and win precious attention. Almost every case video for a social-issue winner ends by listing a pile of numbers showing that the idea earned millions of free media impressions, or more.

So is creativity still the creativity it once was? As everything comes apart, brands are finding that consumer attention has little to do with bits of data flying around anymore, and the only thing advertising people can do is make noise — social issues have become advertising's way out in the age of consumerism.

There is one subtle difference this year: the cases honored at Cannes no longer touch subjects contentious enough to risk losing part of the audience. They build their ideas on positions almost everyone can accept.

Bloodnormal, another Titanium Lion winner, broke the unwritten rule that sanitary-pad ads use blue liquid instead of blood — which does look like an indefensible myth of that category:

The PR Grand Prix went to the "Trash Isles" idea, also built on an environmental issue:

Carrefour's campaign, run during the World Food Conference, drove an actual change in policy, aimed at an absurd EU agricultural law:

On June 24, Saudi Arabia formally repealed its ban on women driving. Audi, which had run a provocative Super Bowl ad two years earlier, moved immediately to release a new one — this time in a tone of encouragement rather than accusation.

P&G, the world's biggest advertiser, announced only one big thing at Cannes: over the next five years, pushing gender equality will guide the marketing of all its brands. P&G Chief Brand Officer Marc Pritchard said: "Gender equality is good for society and good for business."

Advertising once built itself into part of pop culture — Warhol's soup cans, Pepsi's "Pepsi Generation." Now, having lost its voice, advertising has drifted away from culture and can only scramble to attach itself to whatever the public is already talking about.

An industry that has been running for more than a hundred years has, amid a blizzard of trading platforms, marketing tools, and statistics, come back to where it started: let's talk about this ad.

Cover image from Nike; in-body images from Cannes Lions Twitter

(Graphics: Feng Xiuxia)