How Much Do Ad Agencies Spend on Awards Shows Every Year, Exactly?

It's not about the yachts, the panels or the dearly departed Snapchat Ferris Wheel. Advertising professionals and the companies that employ them spend millions to gather in the South of France every summer for the awards, stupid. This is the same reason most notable agencies employ at least one person whose only job is to manage submissions and related minutiae year-round. But what are those shiny statuettes or pencils worth? And how much do the networks angling to score them actually spend? [kickout id="1"] Based on Adweek's conversations with more than a dozen sources, the most impressive total (or the most ridiculous, depending on where you're sitting) is $1 million. That's the very lowest estimated amount that a large global agency can spend on Cannes alone each year when accounting for travel, food, events and other expenses in addition to the awards submissions themselves. Even if those extra costs aren't included in the mix, the same network can still easily shell out seven figures in entry fees for assorted international competitions, from the Radio Mercury Awards to Spikes Asia and D&AD, over a 12-month period. This total may seem exorbitant, but it can amount to a rounding error for the parent companies of the world's largest shops, and almost every source unsurprisingly said they spend less now than in years past. Multiple parties said $1 million was far too low a number for the biggest networks. All agency and holding company spokespeople declined to comment on budget concerns. For a more down-to-earth perspective, several parties with in-depth knowledge of the business said the most recognizable mid-sized and independent agencies can spend anywhere from $200,000 to $500,000 on awards shows, depending on the strength of their creative offerings for a given year. 'Money often costs too much.' Like everything else in this business, awards are a strategic concern. "My first priority was 'enter everything,’" said one source who previously managed awards for two different holding companies. "I had no budget. I just had to report what I spent at the end of the year, and [leadership] only cared about the conversion rate." She added that one of these companies saw awards as "a numbers game" in that the more they entered, the more they won. Executives then used these results as "data points" for clients and investors. Clients also played a key role in that agencies often had no choice but to submit campaigns when CMOs said so, even if they knew that the chances of winning were remote. [kickout id="2"] This source said awards shows are also highly political in that agency employees work to familiarize themselves with the tastes of individual judges to better determine which campaigns stand the best chance of winning. Each year also tends to see one "underdog" campaign from a lesser-known agency win big in spite of a tiny budget, she said, and big spenders that are "basically funding the show" do not necessarily get rewarded accordingly, even if they win far more in the aggregate. Most parties generally refrain from betting the bank. One veteran of a mid-sized, holding group-owned agency pegged its total 2018 spend at $130,000, with a significant majority going to Cannes. An independent Midwestern shop that is just as successful but smaller and less well-known said it spends around $100,000 on awards in a given year. This can be a simple matter of scale. Another source at one of the million-dollar networks estimated that his company filed 2,500 Cannes submissions this year across all categories. A quick glance at pricing models shows how those numbers can add up: Fees range from €555 ($621) for a basic Lion to €1,885 ($2,112) for a last-minute Titanium entry. Fees for other shows like the Clios and The One Show similarly start around $550 per entry, though the latter organization's ADC Awards recently introduced a tiered model designed for freelancers and smaller companies, with rates starting at $100 for individuals and $300 for businesses. Beyond the fees themselves comes the not-quite-hidden cost of video case studies, which are currently required for almost all awards shows. Even though agencies can use the same video multiple times for one campaign, one source estimated the cost of producing such a short at $7,000-$10,000, especially when a third-party production company gets involved. Another said the price could be more than double that. That all-important real-world value When considering how much these organizations spend, one has to ask: Is this all worth it? Joan executive creative director Dan Lucey said yes but added a major qualifier: "We can no longer award work that is only relevant to our industry. If it doesn’t break into and affect popular culture, it shouldn’t be celebrated." Derek Walker, veteran of TBWA\Chiat\Day and founder of Columbia, South Carolina, agency brown and browner, told Adweek that agencies like Goodby Silverstein & Partners built their reputations on awards and said those who criticize the practice "ignore reality," adding, "this is how we got paid for decades." At the same time, he said fees have increased considerably since he joined the industry around 25 years ago. "I don’t think anybody understands how many agencies have opted out because of the cost," Walker said. "If only the rich get to play, are they really the best?" Not all awards are created equal, and nearly every party agreed that the field has been too crowded for too long. As Walker put it, bluntly, "No one cares if you win a local Addy. That’s like hanging your picture on your mom’s refrigerator." And some of the biggest defenders of these shows are—again, unsurprisingly—the executives who run them. [kickout id="3"] "Whether we like it or not, entering award shows is really important," said CEO Kevin Swanepoel of The One Club for Creativity, which stages The One Show. "They get you new talent, which allows you to win new business and inspires the team to do better work. It's a vicious cycle." To make that point, he claimed that one unnamed creative rejected a job offer from Publicis Groupe after that company announced its plans to skip all shows last year. Swanepoel also disputed the general idea of awards fatigue, stating that his own organization is "a couple hundred entries from our highest level ever" and drawing a contrast between Cannes and non-profit organizations like The One Club and D&AD, which state that much of their revenues go into education and diversity efforts. "Its become more of an ad-tech show," he said of Cannes. The future still looks pretty rich Philip Thomas, CEO of Cannes parent company Ascential, recently assured Adweek that agency holding groups still bankroll the majority of the festival, but ad-tech companies and consulting firms do provide an increasing share of his company's revenues. When adding the cost of Accenture's 500 2019 entries to that of its yacht and "digital doggy bag" initiative, the firm's total spend quickly climbs more than halfway toward that $1 million marker. Multiple parties also agreed that the awards landscape is changing as the number of independent competitions shrinks and more trade publications get into the game. Three people specifically noted the rebranding of agency ranking index the Gunn Report, which was recently folded into WARC (now also part of Cannes). The same parties named Cannes and The Effies as the most important shows because of the former's visibility and the latter's reputation. "Effies are the award that clients and brand-side marketers want to win, because we honor ideas that work," said Effie Worldwide CEO Traci Alford. "Awards with rigorous judging and criteria like Effie set the benchmarks of excellence as determined by our industry." She added, "It is important that the industry celebrates and awards work that grows businesses." Has agency investment in the most lavish awards shows declined in recent years? Do they still have value for participants? And will they live on in some form for the foreseeable future with millions in funding? The answer to all three questions is clearly yes.