- Jim Edwards / BI
CANNES, France – The Cannes Lions Festival is advertising’s glittering moment in the sun, the industry’s equivalent of the Oscars. It is often said that the importance of the Lion trophies is that they are the only awards people outside the business have heard of.
It’s the biggest moment of the year on the advertising calendar, and tens of thousands of media and technology company execs pour into the French Riviera to attend the conference, take meetings with clients, drink pink wine, and see who wins. The folks who make ads for baby food, incontinence aids and cans of beans get to rub shoulders with the likes of Ron Howard, Helen Mirren, Ryan Seacrest and Halsey, the singer.
But this year the burnish came off those Gold Lions considerably, as the ad execs who pay for the rosé-soaked festivities complained loudly, and with their chequebooks:
- Publicis, the third-largest ad agency network, said it would not attend the Cannes Lions at all next year and instead invest the money it would have spent on award entries and hotel rooms on a new AI product. WPP sent only 500 staffers to Cannes this year, down from 1,000 last year. WPP CEO Martin Sorrell told Business Insider that people were complaining they felt “ripped off” by Cannes. The Daily Mail, which last year had two gigantic party yachts pulled up at the docks and a party deck built alongside them, at an estimated cost of up to $8 million (£6.3 million), didn’t do anything this year. Revenue at the Daily Mail was down 12% in the first half of fiscal 2017, so someone inside the company appears to have concluded that whatever deals they signed on their yachts last year were not good enough to require rebooking those boats this year. And the stock of Ascential, the holding company that owns the Cannes Lions, took a precipitous dip right in the middle of the festival as it became clear that one of the main themes emerging from it was not the celebration of creativity but the mere cost of being there.
The Cannes Lions may be pricing themselves out of their own market, in other words.
Jose Papa, managing director of the Lions, defended his prices to Business Insider via email:
“We know that depending on where you are in the world, to come all the way to the south of France can be a big commitment. It’s why we put so much focus on value for money, to make sure the Festival is accessible to as many people as possible. We have passes which start at €1,595 (£1,395) for two days, and attendees under 30 can save up to 45%. There are lots of misconceptions about the expense of Cannes – one of the most prevalent being that we charge people to speak on stage, which we don’t; or that all the hotels are very expensive, which they’re not.
And that, many say, is part of the problem: It’s €1,595 for one person for two days! (Papa’s full statement is below.)
Sorrell says, “They feel it’s very expensive, they go so far to say as if they feel they are being ripped off. It may have passed its sell-by date.”
- Jim Edwards / BI
To understand Cannes’ problems, it’s worth knowing just how expensive it is for a company to be there: It can cost €1 million ($1.1 million or £874,697) before an ad agency even gets on a plane. WPP sent 500 people this year, but even if that number were reduced to 200, Business Insider calculated last year that they might need passes that cost €1,500 (£1,312) each, for a total of €300,000 (£262,409). Then a global agency might enter 1,500 prize categories at €500 (£437) per entry – that equals €750,000 (£656,023).
Already, the bill is over €1 million before a single flight is booked or hotel room reserved.
Once you’re at Cannes, things don’t get cheaper. The local hotels and restaurants know they have a captive audience. It costs €9 (£8) just to have a cup of tea inside the Hotel Barriere Majestic on the Croisette, one of the main hotels for the festival. At the Carlton down the street, it’s €32 (£28) for a chicken sandwich. It can be difficult to escape dinner from the cheaper nearby restaurants for less than €40 (£35) per head. And employees expense all that back to agencies.
“Well, we said last year we question what the setup was here or the value of Cannes was. Last year, we had about 1,000 people, this year we had about 500,” Sorrell says. “We were seriously questioning our participation last year and we will continue to do that.”
Sorrell also thinks it might do well to move the Lions out of Cannes. “Whether it should be here or not is another question. There are some tremendous places in New York, there are tremendous places in London. After 9/11, Davos did go to New York.”
“Cannes in the middle of June may not be the best place logistically for people to get to. If you had it in a city, Berlin, Amsterdam, whatever, in a city centre there may be other attractions … it will be less clunky.”
That’s unlikely to happen. The Cannes Lions benefit enormously from their association with the Cannes Film Festival. Gwyneth Paltrow has attended both, for instance. That glamour rubs off on the Lions.
What is really going on here is that the large agencies – WPP and Publicis – are likely attempting to force Cannes to lower its prices in consideration of the bulk buying they do on entry fees and the like. WPP’s people had a meeting scheduled with the Cannes Lions organisers on June 24. No doubt costs will be negotiated, and no doubt Duncan Painter, the chief executive of Ascential, will establish some sort of internal review of pricing.
- Tony Barson/Getty Images for iHeartMedia
So expect Cannes to continue, but expect its price to go down. The Lions will still roar, but a bit less loudly.
Full statement from Jose Papa, Managing Director of Cannes Lions:
“We know that depending on where you are in the world, to come all the way to the south of France can be a big commitment. It’s why we put so much focus on value for money, to make sure the Festival is accessible to as many people as possible. We have passes which start at €1,595 for two days, and attendees under 30 can save up to 45%. There are lots of misconceptions about the expense of Cannes – one of the most prevalent being that we charge people to speak on stage, which we don’t; or that all the hotels are very expensive, which they’re not.
“Yes, we’re a business. But the spirit of what the Lion stands for as the global symbol of creative achievement belongs to our clients. We exist for the creative. Admittedly the definition of creativity has expanded and developed, and we’ve mirrored that evolution.
“A recent study undertaken by McKinsey showed the link between Lion-winning work and business results. We know creativity matters because thousands of people watch our award shows on live stream, and more physical proof can be seen in the sheer volume of work on display in the Palais by the end of the week. It’s an exhibition that covers the area of five Olympic swimming pools.
“But the best proof in the values of Cannes Lions can be found in the stories of the people here. Take a short walk around the Palais or the Croisette and ask anyone you meet about the value of the Festival: the atmosphere this year is incredible and we’ve heard amazing stories of the connections, achievements and transformative experiences people have enjoyed.
“Cannes Lions exists to serve the industry, and everything that happens here is the result of consultation with the industry. There’s a lot of noise around the tech companies in Cannes, but the creativity is there, in all its guises, just like it always has been. We put in a lot of effort last year to make a better visitor experience, like improving registration, but I accept the fact we need to do more to help people to navigate the Festival.
“The dialogue with our clients never stops. We continually consult with all our clients about the Festival on everything from the structure of our juries to the development of new Lions or what they want to see in the content programme.
“Apart from the Lion itself, the other constant thing about Cannes Lions is change. The Lions change as the work changes and the Festival evolves as the industry evolves. Our role is to help the industry be the best it can be, and this is only possible because we work hard to stay relevant, useful and valuable to our clients.”