thenetworkone's Julian Boulding reflects on Cannes Lions 2019, exploring the key themes and patterns which emerged
Each year, after the Cannes Lions festival, we take a few days to reflect on the events and look for the key themes and patterns which emerge. Here is our take on Cannes 2019.
Who won what? And why?
At its heart, Cannes is an awards festival. A little like the Oscars in the movie industry, a glance at the major prize winners reveals much about how the industry sees itself right now. The major prizes are the Grand Prix, and this year just 30 were awarded: from around 30,000 entries in all. So yes, they do mean something.
Two major trends are clear.
First, Cannes is now dominated by the English-speaking world in general and by the USA in particular:
• More than half of the Grand Prix winners (17 out of 30) are based in the USA
• 12 of these 17 – 40% of the total – are based in New York alone
• Of the 14 winners who are not based in the USA, 11 are local subsidiaries of the large US/UK holding companies: WPP, Omnicom and IPG
Simple maths tells us that just 2 out of 30 Grand Prix winners – Publicis Marcel from France and RBK from Sweden, were created outside the US/UK, by companies headquartered outside USA/UK. Although UK agencies didn’t win any GP’s either: probably with Brexit rolling ever onwards and business investment in UK down 40%, UK agencies can’t afford the entry fees. But that does not explain the lack of winners from India, Africa, Southeast Asia, Korea or Japan.
So, what is the reason?
Part of the problem – and it is a huge problem, for a festival which aspires to global significance - is the Cannes Lions Organisation itself. While they will fairly point to a diversity of judges on the various juries – 50 nations were apparently represented. But as Campaign Asia calculated, 24 out of 27 chair- people of the Cannes Lions juries are currently working in either the USA or the UK. One is working in continental Europe and 2 in APAC: none at all, in Africa, the Middle East or Latin America.
Chairmen and chairwomen guide and set the tone of the judging debates. As Golin co-CEO Jonathan Hughes told the Holmes Report, “Every Chairman of every jury... they all seem to start out by defining what the category means.” The consequence is obvious.
Diversity is not only about gender and ethnicity, it is also about culture. 89% of jury chairs currently working in US or UK; 94% of Grand Prix’s won by US/UK owned or based agencies.
And the problem is not restricted to the Grand Prix’s: Campaign Asia calculated that around 120 Lions were won by all APAC agencies combined, whereas 310 were won by the USA alone. Hmm. Two thirds of the world’s population live in Asia and Africa, and if they abandon Cannes, this global festival will no longer be global.
The second trend is the nature of the winning work. It’s great to see the advertising and marketing communications community stepping up to the plate, in supporting causes that do good in society. But now it almost seems that to win a top prize, the work has to be socially driven, and work aiming to increase a brand’s sales is no longer admired. By our count, 22 out of 30 entries were primarily driven by societal purpose. It’s easier to list the ones which were not: Burger King’s ‘Whopper Detour’ (3 GP’s,) Wendy’s ‘Keeping Fortnite fresh,’ Nike’s ‘Air Max Graffiti Stores’ in Sao Paulo and the two GP’s awarded for music videos. You can make your own count, as lists of the GP winners are easy to find.
Is this a positive trend? Opinion is divided and arguably, this is another dangerous West/East divide.
Saurabh Varma, CEO of Publicis South Asia (and a Creative Effectiveness juror), said to Campaign: “Cannes has become too cause-y. This is not advertising any more. The Western World is saying, ‘We have too many things and less is good – less is more.’ When less is more, you start looking at causes all the time. In India, it’s still about winning things, acquiring things. It’s still about the rat race. There’s a certain joy in growing.”
Of course, a campaign for a social cause can also have a commercial benefit for a company. Microsoft were clear that in their GP winning entry for their game controllers adapted for people with movement difficulties, ‘we were not concerned to sell more game controllers, we wanted people to think better of us as a company.’ Today, social responsibility and commercial advantage are linked. But if 75% of the top prizes go to campaigns for social causes, people will stop entering commercial work and that will be a loss.
There are good arguments either way and this is not an issue only for Cannes. My own company, thenetworkone, runs an awards program for independent agencies. Last year, an entrant from France told us, “as soon as I saw the entry from Finland (in support of a social cause), I knew my entry, designed to increase my client’s sales, would not win.” This year, we have changed our rules to separate social purpose from commercial purpose. Perhaps that will be better, perhaps not. But judgments of merit, require comparability. Let’s see. Right now, we are all a little unsure what to do.
Corporate social purpose: whose mindset?
Time magazine hosted an interesting seminar, deep in Palais 2 and far from the main stages. Their theme was the growing disconnect between people and politicians. With regard to the US specifically, they said: “America is getting younger and more diverse. Its leadership is getting older and whiter. The Trump cabinet is the oldest in history. Companies need to start conversations about these issues.”
And they are. One of the most widely discussed speakers at Cannes was Alan Jope, the new CEO of Unilever. Jope is putting Purpose front, left and centre of his leadership agenda. He lambasted the Cannes Lions content team who “specifically asked us not to speak about purpose, which is why we had to come up with the ridiculous talk title about walruses.” He challenged Unilever’s agencies not to accept briefs which do not walk the talk on purpose. He had no sympathy for “middle-aged white men” displaced by women in senior roles. He undertook to divest from Unilever’s portfolio, any brand lacking a clear and meaningful social purpose. He cited the continuing social commitment of Ben and Jerry, founders of the ice cream brand, who ‘still come to work’ and have recently called out the injustice of “white people [in the US] getting legally rich from cannabis, while a lot of black people are still in jail for using it.” The man has a point there.
If Mr Jope seemed a slightly isolated voice in Cannes, that is only because most CEO’s (as opposed to CMO’s) no longer attend. However, several of them were recently at Vivatech, the rival show set up by Publicis, which now takes place in May.
Last year at Vivatech, A-List CEO’s like Mark Zuckerberg of Facebook and Dara Khosrowshahi of Uber were notably ‘on the back foot’, defending their reputations against accusations of moral misdemeanours. This year’s CEO’s were better prepared and much more positive.
Ginny Rometty, global CEO of IBM, talked about their partnerships with governments and corporates to tackle global issues like food safety, food waste and human slavery trafficking; and was joined by Stephane Richard, CEO of Orange as they talked about “relationships with big companies based on shared visions and values.” A succession of other CEO’s – Vas Narasimhan of Novartis, Thomas Bubert of Axa, Ken Hu of Huawei and most notably Jack Ma of Alibaba, all talked about their companies’ social purpose programs. Was there a sub-text about taking over the role of government in some of this? I was left wondering. It would make sense in the current political climate of National Selfishness in some western countries.
Certainly, the CEO’s see social purpose as crucial to their corporate success in winning and retaining both talent and customers. And clearly, this needs to be formulated judiciously and communicated skilfully. So maybe the Cannes juries have a fair argument. But still, it cannot be right that 89% of Grand Prix’s go to countries representing 5% of the global population.
But let’s move on. What else did we see, hear and learn at Cannes this year?
Six major trends
1. “Ugly sells”
I’ve borrowed the phrase from a terrific seminar, early in the week, by Tim Leake of the indie agency RPA, based in Santa Monica, USA. Tim had co-ordinated some compelling analysis of what works and what does not, in internet video these days. There is a strong trend for “authentic” content – the kind people engage with and react to – to be deliberately un-slick and un-crafted and actively avoid “production values.” Craft for Tim, is about story, performance, character and casting: aka, the cheap stuff.
Tim’s friend at Donut Media, a car video content production company, has studied communications outcomes and finds no correlation between production values and engagement.
His client, Stefan Heinrich Enriquez who is head of global marketing at TikTok, rejects agency proposals that look like advertising, because “no-one talks like ads.” He showed examples of companies who have learned to modulate communication for different platforms: Denny’s, the hamburger chain, runs very different creativity on Instagram, YouTube and broadcast TV. Gen Z creators use different tonalities for their Instagram and their Finstagram (fake Instagram) accounts.
At the end his counsel to all of us was, really nicely produced and really badly produced work, both work well. It’s the middle ground that sucks.
2. “outcome advertising”
Feeling a little tired of being stuck in the Palais, I thought I’d try out the “Cannes Official Fringe.” and headed out to the sunshine in ‘Cabana Town’ check out a seminar hosted by Whalar. There were only 13 other people in the audience and as signing up to the ‘Official Fringe” costs around 30,000 Euros and Cabana prices start around €70,000 Euros, I was not entirely convinced about the ROI: but the panel they hosted was interesting.
Mostly, they talked about “Voice advertising” – essentially, getting your brand promoted on Amazon’s Alexa and Google voice. This may, or may not, be the next big thing. The panel seemed surprised that Amazon and Google seemed to have by far the best capability but did not seem to be monetising it. Personally, I suspect this is all part of their scale play: if they give it away for free, no-one else will be able to compete until they already dominate the market, when it will be too late.
But even more interesting was a random comment from one of the participants that her agency, WPP’s Xaxis, is now self-styled as “The Outcome Media Company.”
“Outcomes” are, as we heard last year, what clients want. Maybe not the CEO’s, but certainly the CMO’s, whose tenure averages less than 18 months and who are nowadays required not just to demonstrate growth, but to accelerate growth.
In Xaxis own words, it combines unique brand-safe media access, unrivalled programmatic expertise and 360-degree data with proprietary artificial intelligence to help global brands achieve the outcomes they value from their digital media investments. In plain English, this means short term sales results from advertising. Perhaps unsurprisingly, the best client proponents of this are American Fast Food retailers, who won four of the seven Grand Prix’s which were not awarded for social purpose.
Burger King, who won three of the Grand Prix’s, used espionage technology to identify punters arriving at a McDonald’s outlet and message them that if they turned their cars around and drove to a Burger King outlet instead, they could buy a BK whopper for just one cent. It was a pretty good offer and came with a gloriously realistic wobbly-camera video of the nice people at McDonald’s, helpfully directing their customers to their competitor. A worthy GP winner, even if it wasn’t quite as funny as last year’s TV ad where BK talked the unsuspecting viewer’s Alexa into ordering a whopper without the person’s knowledge.
These are brilliant and cheeky pieces of creativity and deserve their prizes. But they leave unanswered the bigger question: if the CMOs and the agencies are focussed on short term outcomes, who is building the long-term value of the brand?
Les Binet and Peter Field, the UK IPA consultants described by Katrina Dodd of Contagious as “the Kim and Kanye of Marketing Effectiveness”, used to advise that 60% of a communications budget be spent on brand building and 40% on short term sales. They now advise that brand equity building has been so neglected that 75% of budgets should be brand building and only 25% on short term sales. Well, take your pick, I say. Which would you rather be: a) a global celebrity with a super-glamorous partner; b) a CMO still in a job; or c) a consultant for an advertising trade body?
It's hard to criticise CMO’s for pursuing short term accelerated sales growth, when that is what they are charged to do. But their CEO’s have a different agenda.
Round about November 2018, when the Cannes content team would have been putting together their June 2019 program, 'in-housing' was the big talking point of the industry. It was the prevailing theme of the US ANA (Association of National Advertisers) 2018 annual conference.
The growing trend of clients moving agency services in-house is of course a major concern to some agencies – most particularly, the traditional agency holding companies like WPP, Omnicom, Publicis, IPG, Havas and DAN, whose prospects have been decimated by the loss of highly profitable media buying assignments.
So, Cannes scheduled a panel (two agencies, two clients) to debate the issue. A lot of people turned up hoping for some fireworks about transparency, fraud, FBI investigations and the stuff that has been all over Advertising Age in the US. However, the moderator, Phil Thomas of the Cannes Lions (known to some as “Spreadsheet Phil,” like the UK Finance minister) decreed at the outset that the discussion would be restricted to “big idea creativity.” Ideas are intangible, so it’s quite difficult to prove who has bigger ones and we did not get very far.
We did get a couple of classic network agency soundbites.
Vicky Maguire, CCO of Grey London, opined that clients move work in-house thinking it can’t be any worse, because agency work is so mediocre. Ouch.
Teresa Herd, global creative director at Intel, described agency life as “working on projects you don’t have passion for, presenting to middle management clients who can’t make decisions.” Teresa fired Chiat Day and Crispin Porter which would have made her the winner of the debate, except that earlier this year she got fired herself by Intel and her in house agency was closed down, so I think we can say the agencies won this time.
(Tip from the membership manager of the Marketing Society: practise singing “No budget, no friends” to the tune of Bob Marley’s “No woman, no cry.” Livens up any agency party.)
In many ways: the media wars are over, and the agencies lost.
Big clients are moving media buying in house, disingenuously citing transparency issues. Did they really not know about agency rebates? When they hired people from media agencies, did they really wipe their memories, like the Men in Black?
But the bigger issue is the growing importance of highly confidential first party data which the clients own, and don’t share with their agencies... although they do share it with the consulting companies!
Suzanne Kounkel of Deloitte UK put it very well. Their creative agency, Heat, is “mixing external data [like: there is a snowstorm coming] with customer data [like: you own a 3-year-old BMW with no snow tyres.]”. This is media planning today and it is increasingly moving in-house. Independents will probably survive and may well thrive, working for smaller clients who can’t afford their own in-house capabilities – because data analysts and machines that learn, are expensive and the consulting firms are not interested in clients with less than $1 billion in revenue.
What’s also interesting is how publishing is changing too.
Cannes can’t afford popular celebrities any more (Jeff Goldblum? Please...) but business celebrities still come.
We had a shameless sales pitch, but an absorbing one, from Jeffrey Katzenberg and Meg Whitman, for Quibis. Quibis are quick bites: a new kind of TV in 10-minute segments – like the ten minute chapters in Dan Brown’s Da Vinci code – delivered via your soon-to-be 5G mobile phone, in vertical or horizontal formats, perfect while you are waiting at the bus stop but which can also be watched end- to-end of an evening. The platform will launch in the US, next April.
The founders’ names carry clout and they raised $1 billion in funding just by asking, which must make them a super-unicorn, I guess. The real USP though, is that they are entirely curated content. Not like YouTube, Facebook and those nasty UGC platforms where your brand can end up next to ISIS, pornography or the Russian government’s election broadcasts. (Clever and topical, but also copyable. Expect a pre-emptive response from the folks at Google and Facebook.) The most revelatory moment was when they brought on P&G’s Marc Pritchard, who revealed that he had been secretly working with them for almost two years and was a great supporter. It was also revealed that Meg Whitman is not only a leading player in Quibis but also a non-exec director of P&G. Clearly, there is a close collaboration here, between publisher and advertiser. But where were P&G’s agencies? Nowhere to be seen, and that was very deliberate.
5. Genre fluidity
We’ve all heard a lot about gender equality and to be fair, Cannes has made real steps here. 48% of jurors were female and the speaker program seemed quite well balanced also. The Cheil seminar, featuring the heads of their offices in China, Japan and India who are all female, was particularly impressive. Although I still think that by far the best seminar on the topic was Michael Roth at AdWeek Europe, explaining how they had changed from incentivising managers to hire more women, to an incentive program which only paid out when these women were promoted.
But one of the best seminars of the week in Cannes, was by Google and YouTube, mostly about genre fluidity.
This is quite brave of them since Google began life as a classification business. But they provided a compelling story about how people identify themselves and identify many other things – notably the music and the videos they like. They had a nice story about Billboard being outed for disqualifying a musician from their Country Music chart because, well, he did not look like a Country musician.
Understanding emerging trends and genres in music and making these easier to find online, is a challenge. Of course, it’s easier if you are 18 years old and spend a lot of time discovering that Hit the wall is a three second dance and ASMR whisper videos are the new way to get to sleep. So, stay with the play, or better still, buy Kevin Allocca’s book “Videocracy” – except it came out last year and will be out of date now, so follow him on social media instead.
Or sign up to TikTok! Who later presented probably the most entertaining seminar of all, featuring a “plus-size model” who got a million views for doing the splits and a likeable Nigerian-American whose parents really wanted her to be a lawyer. TikTok specialises in videos which are so short that you have to watch them at least four times, or you miss bits. It’s described as “therapy, a place to go to make your day feel better.” Sounds good to me!
Kevin was followed by Ben Jones, who is a creative director at Google. I’d always wondered what they did, as redesigning the logo every day must get a bit tiresome after a while.
It turns out he studies viewing patterns. Films of 1 minute 46 seconds work really well. Variety beats frequency. The three most sought-after phrases on Google Translate are ‘How are you’, ‘thank you’ and ‘I love you.’ Which shows we all really want to connect. (Or possibly that if we are talking to ourselves, we don’t need to do that in a foreign language). Life is simple with Google, it must be all those primary colours in their offices.
When not looking for patterns, Ben invents fake brands, so he can try out advertising for them. Good luck Ben, if you ever leave Google, I hope there is still a career for you in BBDO Bangkok. Most likely the current US administration or Cambridge Analytica could use your talents too. This can’t be all wrong, as Google is worth around twenty times as much as all the advertising holding companies combined.
6. The rise of the consulting companies
This trend is serious and genuinely transformational in our industry. The one truly unmissable seminar and almost worth the delegate fee, was the interview with Brian Whipple of Accenture Interactive and David Droga of Droga5.
Of course, Accenture Interactive is not the only consulting firm entering the traditional agencies’ space.
EY does not seem sure whether creativity is a skill they really want to offer. PWC has not fully decoupled consulting from auditing. And perhaps it’s just my impression, but McKinsey seems to have been slipping behind the play recently. Their Cannes presentation was really disappointing: mostly some banal research on CMO typologies. Did we need this, to guess that “unifier CMO’s” outperform “Loner CMO’s,” or CMO’s with few friends in the boardroom? Sure, they are right when they say that CMO’s are pressured to achieve short term results, but everyone knows that now. My sense is that McKinsey’s process-oriented consulting looks a bit yesterday, next to Accenture’s technology and experience-driven approach.
But Accenture are clearly the leaders. In case you have been on a long holiday, Accenture Interactive recently followed up their acquisition of three of Europe’s top creative independents – Karmarama in UK, Kolle Rebbe in Germany and Shackleton in Spain – with the purchase of Droga5, headquartered in New York and arguably the best creative independent agency in the world.
Everyone has been wondering why Droga sold out. An enterprising New York creative shop, Terri & Sandy, even hired a private plane to tow a “Free Droga” banner over the Cannes beach. So, what was the story?
Droga told his version. Three years ago, they pitched a large government assignment and realised there were major aspects to it they simply could not do: brand experience, back end technology, etc. Which the consultancies can. And in Droga’s words, “CMO’s used to be paid to build the brand. Now they are paid to build the business.” Implying: to have real power and influence and value, you need more than advertising skills. Droga again: “Our industry has digital appreciation, they [Accenture Interactive] have digital skills. They build lung devices and have a company which does special effects for Game of Thrones. They can convince a client to spend 10 times what an agency can.”
The last sentence contains the clue. It’s about the money. But not as you might think.
Whipple explained his company’s strategy.
“What do we still need from an M&A perspective? We now have most of the pieces in place for brand experience, e-commerce, CRM etc. We do consumer or citizen-related experience – the experience agency of the future. Comparing us to holding companies is a flawed comparison: what they do is only one component of what we do. We do business strategy, not marketing campaigns. We will not be buying MDC.
“We never do acquisitions to scale revenue – only to fill a gap, or add a new skill.”
The key point is this.
WPP and their competitors have used acquisitions to raise their value by building revenue. As clients squeeze margins, profits decline, and they become increasingly unattractive to the market. And because the media players like Google and Facebook are so much bigger than the agency holding companies (WPP is worth $16 billion, Google is worth $751 billion) they have lost the leverage they need to retain the media buying business for their largest clients.
If your size no longer cuts it, you have to be smarter. And Accenture are smarter. They have more skills, are closer to client CEO’s, have much better staff utilisation and retain the client trust which gives them access to the all-important asset today, the client’s first party data.
They liked not only Droga’s talent, but also the fact that – as he said – he could demonstrate 12 years of 30% year-on-year growth and was still a 30% margin company. Because that is Accenture’s secret too. Margin.
I don’t know their specific figure, but their competitive set customarily achieves margins of between 30% and 50%, so that is a reasonable guess. And as the discussion concluded: “a healthy margin empowers creativity.” Yes, and a whole lot more besides. Our world has changed.
As the holding companies fade, opportunities will open up for independent agencies. (Perhaps involving collaborations with consulting firms – why not?)
My own business, thenetworkone, was formed to help independent agencies win assignments from international clients and manage them effectively; so, I hope you will forgive me a few words on Independents at Cannes.
It’s a subjective view, but I think Cannes is really missing a trick here. Independent agencies used to feature regularly on the main stages, where we hosted a very popular session called the “Independent Agencies Showcase.” For the last few years, this has not been allowed. This year, we set up our own Indie Forum, outside the official festival (and outside the official fringe) on one of the beach venues.
Gratifyingly, it was packed out. We had three brilliant agency founders – Jordan Warren of TBD in San Francisco, Sharon Napier of Partners and Napier in New York, and Nils Leonard, of Uncommon in London. Check their websites and see their work: with talent like this, the independent sector has a sparkling future. And they all love Cannes, although I think Jordan caught a mood when he wished the festival was a little less expensive, so he could bring some of his less senior colleagues. (Our Forum was free of charge and we bought everyone a drink afterwards.)
And then – because Independents are as interested in the broader picture as anyone else – we hosted a discussion on the current state of our own industry, with Marla Kaplowitz, CEO of the US 4A’s; Debbie Vavangas, iX leader for IBM UK and Ireland; Raj Kamble, founder of the indie agency Famous Innovations in Mumbai; and Dick van Motman, global CEO creative for the Dentsu Aegis Network.
I’m not going to attempt a summary of all that was said but I would pick out a classic moment: Dick’s view that ‘an agency is an extension of the client’s marketing department’ and Marla’s contention that ‘the value of an agency lies in providing an objective, external point of view’. I’m with Marla, although both arguments are valid... and explain a lot about the difference between independent agencies and holding companies!
Flag-waving over, a lot of the action these days takes place outside the Palais – not just our little Indie Forum initiative! Which is a serious issue for the organisers. Our door is open if anyone would like to discuss. We have been paying customers for more than 12 years now and we still want it to continue.
Finally, on independent agencies: it is great to see Wieden and Kennedy flying the flag for creativity, with their hugely courageous and successful Colin Kaepernik campaign for Nike; and also, RBK in Sweden, for their innovative work on the carbon-limiting credit card from Doconomy. I remember visiting RBK co-founder Matthias Wikstrom a couple of years ago. He told me how he explains to clients that they will get a lot more value out of his agency in years two and three than in year one, because brands and strategy take time to build. CMO’s in a hurry head for the door at this point, but Matthias stands by his beliefs and the agency deserves our respect.
The last big seminar of the week was delivered by Tor Myhren of Apple and it was worth the wait. OK, it had a few clichés (strategy is sacrifice, quality before quantity, and Picasso’s dictum that everyone is creative as a child but most of us lose the ability as we grow up.) But Tor really nailed the Apple culture which inspires almost everyone in the creative industries:
So how do Apple keep things simple, even after Steve Jobs (and now also without Jony Ive)? Another simple formula.
• Everything is debated
• Nothing is researched
And the thinking is holistic: “so much of marketing starts with the product”: the device itself, the open the pack experience, the physical stores, the lessons in coding, all the images ‘shot on iPhone 6’. And advertising: “Every time I walk into Starbucks, it’s an ad. For Apple.” It’s just a pity that so few marketers today have real control over their company’s products.
So, what is Tor’s view of agencies? He has worked on both sides of the fence. Is he with Dick, or with Marla? Tor said simply, “We need an agency because we need an outside perspective. We need their radical candour.”
Yes. We do.