The decision by Mainardo de Nardis, chief executive of the media buying businesses of Aegis, the UK-listed group, to hire a scooter for the Cannes Lions initially looked like the over-optimism typical of advertising executives.
For this year’s Lions, a week-long mix of daytime seminars and nightly creative awards for the global advertising sector, opened in rain and gusty wind.
And festival scooter riders normally have their work cut out simply avoiding tired and emotional industry luminaries spilling out of the notorious “Gutter Bar” on La Croisette, the main drag in Cannes, at all hours of the day and night.
The volatile weather, however, provided an irresistably hammy metaphor for the run-up to the Lions when more than $10bn was invested in companies which mix advertising and technology services.
The implications of deals by Google, Microsoft, WPP and Publicis for an industry which handles more than $400bn a year of expenditure on worldwide paid-for advertising are still uncertain.
It was little surprise that Zenith Optimedia, the international media buying network owned by Paris-based Publicis, called its Monday morning seminar on future trends for the media sector “The Perfect Storm”.
Zenith argued that despite expectations that worldwide media advertising would grow by a nominal 5-6 per cent average this year, in line with historical trends, the sector faced its biggest period of change this decade.
It said this was due to the impact of a combination of technology developments, shifting consumer habits and geographical factors.
The argument offered a new-ish spin on a familiar theme: conventional ways of marketing were becoming less effective at reaching people, particularly in mature western markets.
By the end of the week, however, the sun had returned to the Riviera and qualified optimism was the more characteristic tone of major advertisers such as Procter & Gamble, Unilever, Nike and American Express.
Jim Stengel, chief marketing officer of P&G, told the FT: “I think the industry is out of its dark ages and into a renaissance.”
An upbeat tone was also displayed by agency networks such as Euro RSCG, part of Havas, the French marketing group controlled by Vincent Bolloré, himself bullish about long-term prospects for media industry growth.
So for those trying to remember what they did at Cannes, and as well as those eager to forget, here is the FT’s summary of six main themes at the 54th Lions International Advertising Festival.
1. An industry charging for free
The balance is changing between brands’ attempts to attract customers via paid-for media advertising and their efforts to get people to pass on positive views about products on and off the web, essentially for free.
Free distribution of advertising cannot replace paid-for slots altogether, but it does require development of new ways to track, evaluate and account for marketing value.
The internet campaign for Unilever’s Dove, the skincare brand, which took the festival’s prestigious film Grand Prix, was only the most high profile example of this theme.
The Dove film benefited from a large element of free distribution after consumers shared it via websites such as YouTube and blogs.
However, getting customers to endorse brands to their peers – so-called word of mouth marketing – has become an over-riding general industry preoccupation.
Nike, the sports brand, for instance, won a Lion for Nike +, a joint venture with Apple’s iPod business which enables joggers to log runs and connect to other users using their iPods, a community website and specially adapted trainers.
Stefan Olander, Nike’s global director of digital and content, said: “97 per cent of Nike+ users said they would recommend the service to a friend. That figure is unheard of.”
2. Do you have it in green?
Mr Stengel at P&G, which has been overhauling the sizing and packaging of its detergent brands in the US to reflect consumer’s interest in environmental benefits, says crisply: “We’re seeing it pretty much as a global trend. I don’t think it’s a fad, not at all.”
But advertisers are split over whether the trend is something they should incorporate into their consumer-facing marketing, or should be treated as part of internal corporate social responsibility.
3. There today, here tomorrow.
China, South Korea and India are providing laboratories for advertisers to develop content and campaigns - particularly in mobile, outdoor and broadband internet formats - which are destined to be exported into western markets.
4. Brands of brothers.
The large subscriber bases, often skewed towards the young shoppers prized by advertisers, of social websites such as FaceBook and MySpace make them theoretically valuable platforms for advertisers.
But audiences are typically spread thinly over many parts of such websites and can be averse to direct marketing approaches. Attempts to transplant existing campaigns into such contexts have often flopped.
To some industry experts, these sites may be more valuable as pools for market research and public relations rather than outlets for conventional brand marketing.
Overall, FaceBook and Joost, the fledgling ad-funded free internet television service which avoids showing copyright infringing material, appear more in favour among advertisers than YouTube or MySpace.
Simon Rothon, senior vice-president, marketing services global at Unilever, told the FT: “On sites such as FaceBook, people are effectively having private conversations. As a marketer, you don’t want to intrude on a private conversation. The trick will be try to join the conversation by offering something relevant.”
5. More capital, please.
Steve King, chief executive of Zenith Optimedia, the media buyer, said: “Our business used to driven by cash-generation, based on buying large volumes of media at a small gross margin.
“But the scale of engagement we’re having with clients is changing. The need for capital to invest in new systems and the cost of collecting and analysing research is going up, and that is changing the way we do business.”
Yusuf Mehdi, chief advertising strategist of Microsoft, which had a large presence at the Lions, told the FT: “I do think this [online advertising] is a business where the scale of investment to provide a platform which will run across all types of digital media and all types of analytics is only going to be able to be done by a few large providers.
“I don’t know enough to say whether it is two or three or four, but I certainly believe there will be room for two. If you can be in the top two, you will have a very good business.”
“It’s open season on reinvention. Today everybody is in everybody else’s business”, Wenda Harris Hillard, chief sales officer at Yahoo, the internet media group, told Lions delegates.
Recent deal-making has seen software companies buy agency groups and vice versa. Over a longer period, media buyers, digital companies and brands themselves have also all ventured into content-making.
The ability of the internet to deliver converged media and services has only really exacerbated an existing trend which saw agency businesses already diversifying to train to gain a share of the value created when consumers are given the right commercial message, at the right time and in the right format.
Marketing organisations which operate in silos – whether by function or by geography – are ill-suited to exploit this trend.
Mr Stengel, of P&G, said: “Agencies all get that they have to change and they are trying. But they have to alter a lot of their structures, and profit centres and paradigms. And we as a client, have to be clearer about saying ’this is what we expect from you’.”
FRIDAY JUNE 22: Climate change opportunities
THURSDAY JUNE 21: Brands to look out for in 2008
WEDNESDAY JUNE 20:Microsoft pushes one-stop shop
TUESDAY JUNE 19: In search of a business model
MONDAY JUNE 18: Big bets at Cannes Lions
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