The dark side visits Cannes

Michael Hedges June 25, 2008

It wasn’t all parties, awards, parties, beach and parties at the Cannes International Advertising Festival; well, almost not all. Advertising and media luminaries took to the podium for a few rounds of complaining, whinging and begging. Google’s business model was long argued. And Mr. Murdoch asked for the money.

There can’t be a meeting of media people without a four-hour discussion of Google, friend or foe, even when the sun is high and the beach is near.  WPP Chairman Sir Martin Sorrell led a long – but not four hour – debate on online advertising, attention spans in Cannes being what they are. Off the bat he jumped Yahoo Executive VP Hilary Schneider about the just announced deal with Google to front Google ads on Yahoo search results. While saying Yahoo “committed to being a principal in the search marketplace,” Schneider said the Google deal helps Yahoo to “continue to serve advertisers.”

The ‘debate’ degenerated into Microsoft’s representative poking at the Yahoo representative and most everybody poking at the Google representative. Clearly the business of advertising doesn’t want these online people playing in their patch.

"The concept of search is to link buyers and sellers so why does the middleman keep all the money," Microsoft senior executive Kevin Johnson rhetorically asked in full view of an audience of middlemen. Using a term coined by French post-modernists, Sir Martin asked Google executive Henrique de Castro if Google was not trying to “disintermediate,” separate agencies from their tidy place between advertisers and media. Absolutely not, said de Castro. “The best results are when we work together with agencies.” 

Microsoft’s Johnson also referred to the Yahoo-Google deal as anti-competitive and bad for advertisers… irony noted.

Sir Martin seemed most distressed that Google and Microsoft are hiring away top ad talent and buying up online specialty agencies. Microsoft announced at the fete its purchase of online agency Navic. "We coveted them, too," said Sir Martin. "But we didn't have the resources."

Publicis Group chairman Maurice Levy shared a different view, calling the Yahoo-Google deal “very positive” for advertisers. In January Publicis and Google formed a partnership to develop advertising technology.

"When you look at this the one that holds the key are advertisers,” he said at a press conference in Cannes. “They have the money, then it is up to us to find the audience. The situation is not a threat.”

Rupert Murdoch paid homage to the ad people and his was a simple message: keep spending. In an appearance set-up like a TV talk show with Y&R chief Hamish McLennan asking questions, Mr. Murdoch the Elder begged the ad people to keep the money flowing. “In these troubled times, don’t stop pushing your brand,” he implored. In a separate Cannes venue, James Murdoch, the Younger, offered that News International would be increasing its marketing budget. Whew!

Brand advertising – traditionally the bread and butter of print and television – is facing a slowdown as spending shifts to online media. The Elder Murdoch said 50% of Dow Jones revenues are “digital.” And he continued, “I can see in a few years 75% digital.”

The Elder scoffed at social networking portal Facebook, which just overtook in US page views his $500 million investment MySpace. "They've not monetized as well as us,” he barked. “They've done a great job of being the flavor of the month the last six months of last year."

The Elder left Cannes after briefing News Corp executives.

The ad people left Cannes, mostly untarnished, but not forgetting one last award. Independent News and Media CEO Anthony O’Reilly was given their Media Person of the Year award. It’s the least they could do for spending less money on newspaper space.