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'Everybody wants to pull dollars away from Google and Facebook': Lessons from the world's largest ad conference

Delegates wait in line at Cannes Lions International Festival of Creativity, Cannes, France, June 2019
Cannes Lions

Last week, more than 15,000 marketers, ad agencies, media and tech companies gathered in Cannes on the French Riviera to court each other, do business and try to win a coveted Lion award - the ad industry's version of an Oscar.

Google, Facebook, Spotify, Pinterest and Twitter all took large beach areas at the Cannes Lions International Festival of Creativity, while super yachts lined up the marina, hired for the week by ad tech companies and consultancies like Accenture Interactive. The New York Post and Wall Street Journal handed out free newspapers to delegates and the Journal held meetings in a two-story temporary "house" at the end of the marina, while Snap took over La Malmaison art gallery and had 25 executives, including CEO Evan Spiegel, networking at the event.

Inside the Palais des Festivals, home to the main conference, delegates could watch John Legend perform in a session hosted by Procter & Gamble (Legend has starred in ads for Pampers), hear Apple's chief marketing officer (CMO) Tor Myhren give a talk called "Simple is Hard" or learn about video-sharing platform TikTok, the U.S.'s third most-downloaded app in the first-quarter of the year. It was TikTok's first time at Cannes and it was also the debut appearance for Twitch, the streaming platform for gamers owned by Amazon, which took over a penthouse suite to host meetings.

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As well as expected themes, such as diversity (Facebook's CMO Antonio Lucio spearheaded an initiative to get more ads and movies made by women) and purpose (Unilever's CEO Alan Jope made the case for the company's brands to do more than just provide a functional benefit), the two major digital advertising platforms, Google and Facebook, came under scrutiny from the industry.

Alternatives to the duopoly

While Facebook and Google are part of a new alliance to create standards for what's considered appropriate content online, set up by the World Federation of Advertisers, other media and content platforms like Conde Nast, Snap and Activision Blizzard's Overwatch League are pushing themselves as alternative places for ad dollars.

Direct-to-consumer (DTC) brands, those that sell online and bypass traditional retailers, are looking for alternative ways to reach people through advertising. "Everybody wants to pull dollars away from Google and Facebook," said David Spector, co-CEO and co-founder of bra company ThirdLove, speaking on a panel Wednesday.

There is "probably or potentially a limit on how much we should spend on some of those digital channels," he told CNBC. "We want to be able to tell our story on other channels in just as efficient of a way." Spector would like to be able to reach people via targeted TV advertising, which is in its infancy, but is also leaning more on traditional marketing after a ThirdLove press ad criticizing rival Victoria's Secret went viral.

A return to traditional media

Bobby Ghoshal, co-founder of teeth-straightening company Candid, which sells dental aligners online, said Facebook ads did great for selling $95 starter kits to people, but not so well in terms of upselling them to the full, $1900 product. Ghosal said the company spent about 85 percent of its marketing budget on Facebook in 2018 but in the past eight weeks had hit a "bump" in the road with Facebook ads.

He is pushing the company toward more traditional media such as radio and TV, because "that's where all the trust is built," and is investing in long-form articles and videos providing information about how the product works. Candid has also put a "ton" of money into TV advertising and has run billboards in major U.S. cities, Ghosal said.

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Jesse Horowitz, co-founder of DTC contact lens company Hubble, said it had heavily advertised on TV and was "diversifying" its ad spend. "You know that's what gives us the comfort, if Facebook were to crap out for us tomorrow, we know there are other channels that we can diversify back into," he said during a panel discussion.

Brands and political stands

Politics, and whether brands should take a stance, also featured at Cannes. Earlier this month, Pinterest found itself in the spotlight for banning content from anti-abortion group Live Action, which some suggested was a form of censorship. But Pinterest CMO Andrea Mallard said it was a case of suspending the group for spreading misinformation, during a panel discussion hosted by the Economist.

"I do think great brands need to have a perspective in general and be unequivocal about taking that stand … Our perspective is about the misinformation in which we're unequivocal," she said.

Meanwhile, Marriott's global marketing officer Karin Timpone spoke about how the company dealt with a backlash from China after a survey went out listing Hong Kong as a separate country, rather than a territory, resulting in a Chinese regulator suspending the website for a week in January 2018.

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"Things travel around on social media without necessarily the same sort of completeness that you might see in a longer form article about it," she said. The company has newsrooms in Washington DC, Miami, London, Dubai and Hong Kong monitoring mentions of Marriott on social media, Timpone added.

Cannes also saw a political frisson of its own when Cambridge Analytica founder Alexander Nix was forced to cancel an appearance at the conference, while climate action group Extinction Rebellion protested on Facebook's private beach area and at the Palais, where 14 arrests were made.

All-age marketing

While those who speak about diversity often include gender, race or sexuality, age is not always part of the conversation. Maye Musk, a model of 71 (and mother of Elon Musk), took part in a panel that pushed employers to hire people over the age of 50 and questioned why businesses were so keen on millennials, when they were likely to be poorer than other generations.

At the other end of the scale, comic publisher Beano launched a consultancy to help brands understand children under 10, known as Generation Alpha, and Snap touted its understanding of Generation Z (those born from the mid-1990s). Snap published research claiming Snapchat is the top app for sharing videos and pictures, with its International Vice President Claire Valoti telling CNBC it considers itself a "camera company" not a social network.

Delegates wait in line at Cannes Lions International Festival of Creativity, Cannes, France, June 2019
Cannes Lions