CANNES, FRANCE The lingering economic downturn is a forbidding cloud hanging over Cannes. Few conversations occur without touching on what's been a dreadful year for most in the advertising business. Even in an industry that lives on optimism, many see tough times stretching ahead. They got little succor from the analysis of Microsoft CEO Steve Ballmer. Asked yesterday about an economic recovery, he instead spoke of a "reset." His point: Forget about growing from the previous level, there's a new base to build from. The boom days are over.
The same reset theme came up during Friday's "Great Cannes Debate" panel, in which WPP CEO Martin Sorrell quizzed top marketing executives. The good news: All of the panelists said marketing and advertising are more important than ever to their organizations. That doesn't mean the procurement office won't squeeze agencies on price, though, according to Brian Perkins, corporate vp at Johnson & Johnson. "I think procurement has a very important role to play in how we conduct our business," he said.
Marc Pritchard, global marketing officer at Procter & Gamble, called the recession "the reset button." It allows companies, he said, to "recalibrate and rethink and innovate. Our opportunity is to step back and say what is it about our brand that is a promise and how can it be brought to life in innovative way." When P&G, the world's largest advertiser, asked consumers what they were seeking, it came back to value. That means P&G has to look hard at its marketing, not just cutting it but examining media allocation and measuring impact better.
The recession is also putting more pressure than ever on the age-old challenge for marketers: integration. All of the panelists expressed some level of frustration that they couldn't better integrate campaigns with their disparate agencies. The blame ends up lying on old structures. Clients have their own silos that don't communicate well, which is matched on the agency side. When integration does happen, the client executives said, it pays off in spades. P&G ran a successful gaming program in more than 20 countries that involved TV, digital and public relations. Mary Beth West, CMO at Kraft, highlighted a campaign in Brazil for a cracker product that targeted young male "urban nomads." Kraft agencies ended up coming up with a non-traditional solution that created a man-made island off the coast to which Kraft would ferry young men.
Over 60 percent of the budget was spent on nontraditional efforts, she said.
Kraft saw its share of the market rise to 40 percent.
Despite reports to the contrary, marketing executives said TV is far from dead, though the recession is putting pressure on the prices networks are able to charge. Mary Dillon, CMO of McDonald's, said her brand's marketing mix is shifting, with digital now 7 percent of the global total. But TV still commands the lion's share, she said, because it is "the most effective for us." Perkins echoed the point, finding the lack of focus on TV at the advertising festival unusual. "We love TV," he said. "TV can only do certain things, [but] the mass reach of TV is phenomenal."
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