Will Cannes Make the Leap?

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This week, more than 12,000 members of the ad industry will descend on the South of France in their yearly pilgrimage to honor the craft and celebrate the importance of advertising.

In many ways, Cannes is a perfect reflection of the ad industry. The city itself is glamorous and beautiful, yet downright gauche and a little scruffy at times. The week of seemingly non-stop events and parties is inspiring and fun, while at the same time depressing in its ephemeral hedonism.

It is tempting, even easy, to say Cannes is an anachronism, a bit of Mad Men nostalgia for a once-raffish industry losing its sexy allure. But the truth is more complicated. Cannes, like the industry it celebrates, continues to change, with its far greater emphasis on digital and integration, an influx of clients and agency executives, and the creeping in of success metrics as judging criteria.

The conundrum for Cannes is the same for the industry, says Ty Montague, co-president and chief creative officer of JWT New York: It needs new blood. “Our business is upside down these days,” he says. “The people with the most experience and most seniority are the people least qualified to lead the business forward.”

Cannes, like the industry, Montague notes, hasn’t shifted fast enough. Which doesn’t mean it’s going away, and not just, he says, because of the “bottomless well of ego.” For all its warts, he notes, Cannes also represents something more.

“Paying attention to telling the story through every conceivable medium and most particularly through the actual physical experience of using the product is more important than before,” claims Montague. “The future is bright for our business.”

For now, however, Cannes, like the industry, is an old institution struggling to reinvent itself in a new-media environment, not to mention in an economic downturn. When it was first dreamed up in 1954, the Cannes Lions International Advertising Festival was unabashedly modeled on the more famous film festival that precedes it. The idea of the festival is squarely centered around “the work,” the art side of the art and science that is advertising. It’s no coincidence that the crescendo of the week is the Film awards, drawing rowdy crowds that start lining up hours in advance for a shot at getting a seat inside the Palais des Festivals.

A significant sideshow is the parties, some small and intimate, others big and loud. Evenings begin in many places, but in Cannes they end at the Gutter Bar. The Hotel Martinez next door recently told The New York Times that it sells more alcohol during the week the ad folks are in town than in the two weeks of the movie festival.

If there’s a case to be made against Cannes, it starts with Google. The company one media agency exec dismissed just three years ago as “the Valpak of the Internet” is now the dominant force in online advertising — the fastest-growing segment of the industry. Its success can be seen as the anti-Cannes strategy. Rather than kowtow to agencies, Google uses technology for media planning. Instead of the big idea, Google executives believe their algorithms can do a better job matching advertisers to customers.

Google will not have an official presence in Cannes, but will not be totally absent; one of its European executives will appear on a panel. While WPP executives never tire of pointing out how it represents Google’s largest customer and rival Publicis Groupe has even struck a deal to trade employees between the two companies, Google has remained largely aloof from the agency world. It sees a day when its machines determine which commercials are seen based on customer behavior.

The push and pull between traditional creativity — centered on the big idea and storytelling — and the disruption caused by digital technology has only just begun to play out in advertising. “Your Internet technology person will be as important as your creative person,” predicts Mark Kvamme, a venture capitalist with Sequoia Capital, the Google backer, and founder of an early Web agency. “It’s a data game, a speed game.”

On the other hand, there are some who believe technology has received too much attention lately when it comes to advertising. Machines won’t rule the future, the argument goes, but will amplify the same creativity that’s made all great advertising great. “Advertising is the art of persuasion,” says Wenda Harris Millard, the newly named co-CEO of Martha Stewart Living Omnimedia and former Yahoo! ad sales head. “Technology is a great facilitator, but that’s all it is. Technology isn’t what advertising is.”

Cannes is still trying to find technology’s role in advertising. It’s managed to attract top players in tech, including large contingents from Microsoft and Yahoo!. The schedule is now dotted with digital-focused sessions. Wednesday is nearly entirely focused on digital, capped with the Cyber awards in the evening. While TV is still the belle of the ball, digital is a close runner-up.

Yet it’s hard to argue Cannes has been ahead of the curve. Radio became a category at the festival in 2005. And the Cyber entries increased by only 2 percent this year, a lower rate than the much larger Film category, which saw a 3.4 percent jump. The Titanium award, launched in 2003 to reward one-of-a-kind campaigns that represent new ways of reaching customers, was initially mired in confusion over its role. There’s no spot for public relations, buzz generation, interface design or any of the other “micro-interactions” that form the basis of modern marketing, which one agency executive likens to being a porn star: “We do it everywhere, all the time and with many partners.”

This new way of marketing is unsettling advertising. Roles are blurred. While the “traditional agency” once reflexively filled the lead role, it sometimes takes a backseat to shops rooted in other disciplines, from digital to media. Traditional agencies are scrambling to remake themselves in the image of Crispin Porter + Bogusky and Goodby, Silverstein & Partners by adding interactive capabilities, while interactive shops like R/GA, Tribal DDB and Avenue A/Razorfish hope to make a leap to the big leagues by adding storytelling expertise.

This has presented a problem for the industry’s silos as well as Cannes’ categories. Two leading contenders this year are Cadbury’s viral hit “Gorilla” and Burger King’s “Whopper Freakout,” both of which could easily compete in multiple categories.

At the heart of the problem is the award show focus on craft. In days when campaigns were distinct, it was easier to look at work in isolation. Yet now, digital is cutting across many channels, as ideas live in many forms of media.

“The best marketing is built on a deep idea that makes an impact and makes a difference, and everything supports the idea,” says Jim Stengel, global CMO of Procter & Gamble, which is being honored as Client of the Year at Cannes this week. “It’s getting artificial to break things into silos. I’d like to see more things like the Titanium. None of us sit here and say we’re going to launch a new initiative with a great print idea — it’s always what’s the idea behind the brand.”

Stengel’s presence, along with a 40-deep delegation from the world’s largest advertiser, is a further symbol of how much Cannes has changed. Once a refuge for creative directors to admire each other’s work, even if that work wasn’t a client success, Cannes has now become the Woodstock of advertising. Kraft, Unilever and Johnson & Johnson will all have delegations in town.

“Clients come to Cannes looking for a signpost to the future, looking to be inspired,” says Mark Tutssel, CCO of Leo Burnett Worldwide and president of the 2008 Titanium & Integrated Lions jury.

That also means more work over play. An all-day client meeting is not unknown, and many agencies use Cannes as an excuse to have their own global executive meetings.

Another uncomfortable truth for Cannes is how digital media is driving the desire for better metrics. Cannes has always stood staunchly on the side of evaluating work on its own, rather than looking to results. This has fed a feeling of disconnect between the high-mindedness of the award show culture and the gritty realities of art in the service of commerce: Advertising is about getting people to buy stuff. Yet that stance, the commercial as pure art, has started to break down. It began to crumble nine years ago, when the festival added the Media Lions, judged in part (20 percent) on the basis of an entry’s effectiveness. The introduction in 1998 of an award in interactive, where metrics are more common, has further blurred the line, although technically only the Media competition considers results.

Perhaps subconsciously, Cannes juries have made moves to recognize this. Take Dove “Evolution,” last year’s Grand Prix for Film. By any creative measure, the Ogilvy & Mather video is impressive. But it is more so because the work captured the imagination of millions of people with its message of authenticity in the face of a superficial culture. The judges knew “Evolution” was a YouTube sensation. How could that not factor into their decisions?

“I wouldn’t be able to judge a creative campaign without the metrics,” says Sarah Fay, CEO of Aegis North America.

The same revolution is happening throughout the industry, as creative shops like Goody and Crispin hire analytics people and shift to building creative that drives business results. At the end of the day, advertising is held to that standard. One agency CEO recounted a lunch recently when a client asked why agencies cared so much about Cannes. The CEO told him it was mostly for talent and some amount of glory for their work. “At the end of the day, the metric that matters is selling your product,” he remembers telling the client.

For all its changes, Cannes will remain at the heart of the ad world. Technology, which at one point looked poised to thwart advertising, is now seen as a key facilitator of the notion Cannes was founded to celebrate: great storytelling. Even a tech-focused agency like Avenue A/Razorfish, after downplaying the significance of Cannes for years, is coming this year with a 25-person contingent.

CEO Clark Kokich, who had pooh-poohed the importance of Cannes in the past, said it is now more relevant to the agency as it expands in Europe and looks to build its creative chops well beyond user experience.

“I wouldn’t send all these people to Europe to go to parties, shake hands and have a good time,” he said. “We think strategically it’s important, given the rising importance of creativity in building imaginative experiences and the leading position of Europe in the agency. It sends a signal to our people and clients and the market we’re committed to our creative product and to Europe.”

Cannes won’t die, just as the ad industry won’t die. As R/GA CCO Nick Law puts it, it “is first and foremost a business. It will do what it has to do to survive.”