At Cannes, advertisers are still hunting for an alternative to Google and Facebook
The biggest spenders and personalities from the
advertising and media worlds descended on the French Riviera this past
week for Cannes Lions, an extravagant week-long party full of elaborate
dinners, exclusive concerts and a limitless supply of rosé.
Tech companies like Facebook, YouTube and Twitter rented out sprawling beachside cabanas for the week to host meetings and schmooze with business partners.
Others, like Spotify and Verizon’s newly formed AOL-Yahoo tie-up, Oath, threw big parties with expensive musical performances. (In Oath’s case it was Fleetwood Mac front-woman Stevie Nicks; Spotify had Solange Knowles, sister of Beyonce.) Medialink and iHeartMedia threw their very exclusive dinner party again this year where R&B star The Weeknd performed for celebrities like Ryan Seacrest and CEOs like Twitter’s Jack Dorsey.
But despite all the distractions — and there were plenty —
Cannes is also a place where actual deals get done. Many ad buyers and
ad sellers use the week to plan out spending for the second half of the
year, and who shows up and who makes a scene can give you a good idea of
the current pecking order for the industry.
Recode attended, too. Here’s a glimpse from our notebook at some of the biggest themes of the week.
Who’s No. 3?
The big, 60,000-foot takeaway from dozens of
conversations this week is something that we’ve all known for a while:
Facebook and Google are absolutely dominating the digital ad market, and buyers are eager for a third player to offer some competition.
What was different this year from years past is that
folks no longer believe that the third player, if one ever emerges, will
be another platform, like a Twitter or Snapchat. Instead, it feels like
No. 3 might be a content provider, a company like Verizon-owned Oath or
Comcast-owned NBCUniversal*, that has more control over the content
they distribute.
There are a couple of reasons why this matters. One is
that advertisers claim they don’t get enough data from Facebook and
Google about who, specifically, they’re reaching with their ads.
The hope is a third player might share more of that info.
But the other important reason is “ad adjacency,” which is ad industry
speak for making sure your ads don’t appear next to something offensive, like an ISIS video.
Google and Facebook are platforms that carry content
created by other people. A media company would theoretically have more
control over said content, and thus ensure the ads are shown in the
appropriate context. Still, no one expects that a third player will
emerge quickly. That means we’ll probably be having similar discussions
with ad buyers next year.
Could Facebook’s Live video problem become an advertising problem?
Speaking of adjacency ... People are using Facebook Live for all kinds of horrible things,
including suicides and beatings. And while the company is just starting
to roll out ads within Facebook Live videos (and only from videos
produced by hand-selected partners), two ad buyers we spoke with said
their clients are already starting to question whether or not they’d
want want to buy a Facebook Live video ad and be associated with the
product at all.
The ads are so new that this is not yet a significant
problem, but it’s also not a great sign for Facebook, which is finally
making its big push into mid-roll video ads.
Twitter, meanwhile, is selling “live”
Virtually everyone in Twitter’s upper ranks was at Cannes
this year. CEO Jack Dorsey spoke on a panel mid-week and, surprisingly,
wasn’t asked much of anything about Twitter’s business.
But we chatted with VP of Global Revenue Matt Derella at the company’s
fancy beach cabana and he explained that Twitter is trying to sell video
ads to accompany the live video content it’s been gathering for the
past year. (Twitter spent time at Cannes selling ads for its NFL streaming package last year, but it doesn’t have those same streams this year.)
Derella says selling video ads for its live video streams
is similar in process to selling traditional TV ads, but Twitter’s
video ads are different in that they’re more targeted than TV ads, and
mostly built for mobile devices.
“I don’t think it’s going to be as simple as TV 2.0,” he
explained. “Some of the biggest CPG marketers in the world are taking
their 15 and 30 [second ads], and we’re working with them and actually
re-cutting them for Twitter.”
Jeffrey Katzenberg has an idea for “New TV”
DreamWorks co-founder Jeffrey Katzenberg was in town to pitch advertisers on his idea for what he’s calling “New TV.”
The idea is to turn what has traditionally been a multi-hour program — a
three-hour movie, for instance — into multiple shorter episodes and
deliver that to people on mobile devices. He described it like cutting a
book into short chapters.
But Katzenberg, who spoke with us from a suite on the top
floor of the Carlton Hotel overlooking the marina, said he doesn’t want
to create the kind of quick-to-produce internet videos that might do
well for sites like NowThis or BuzzFeed’s Tasty unit. He wants to spend
millions and produce videos that compare in quality to what you might
see in the movie theatre.
The problem? The existing platforms that would be logical
fits to distribute something like this — Facebook or YouTube — don’t
offer an advertising model that can support that kind of production
budget, Katzenberg says. That means he might try and build a platform
himself, or work with an existing player to build something together.
“I don’t know. I’m in that process right now,” he said.
“Over the last eight weeks I have met with what I believe are all of the
potential enterprises that this might be a good fit for.”
Snapchat may not be doomed after all
Snapchat, whose presence in Cannes included an exclusive meeting compound surrounded by bushes and body guards (again) plus a giant yellow Ferris wheel,
missed its Q1 revenue estimates this year, but ad buyers we spoke to in
Cannes aren't as concerned about the company's business prospects as
investors are.
Each of the five ad buyers we spoke with said their
clients are eager to spend money on Snapchat, and one said he recommends
Snapchat in every media package he sends to his clients.
So if everyone wants to give Snap money, why isn’t the
company’s business bigger? These buyers claim that it’s a combination of
things. Snap is still building its ad technology, like automated
ad-buying software and better measurement tools. And it also takes
bigger advertisers a long time to adopt anything new — and Snapchat’s
business, which is just three years old, is still very new.
New arrivals
Reddit sent its sales team to Cannes for the first time
this year alongside founder Alexis Ohanian. Pinterest has been at Cannes
the past four years, but this was by far the company’s biggest
presence. It rented a fancy beach pier, and executives told us that they
are pushing their new search advertising units in conversations with
marketers. (For more on that, and the rest of Pinterest’s business, you
can read our profile of Pinterest’s President Tim Kendall here.)
Facebook Messenger was also in Cannes selling ads for the first time. It’s also showing advertisers its new inbox ads that it started testing back in January.
“We are selling mostly News Feed ads that push people to
Messenger but we [are] also starting to educate ... and teach people
about those [inbox] ads coming inside Messenger as well,” explained
Messenger’s product boss Stan Chudnovsky over breakfast on Facebook’s
beach pier.
The New York Times is not opposing Donald Trump
The Times’s Deputy Publisher, AG Sulzberger, defended the
paper’s reporting on President Trump during a panel at a beachside
cabana hosted by media giant OMD this week.
Sulzberger, who will eventually take over as publisher,
said that while the Times’ coverage isn’t flattering of Trump, the paper
is not trying to actively oppose him either. Eventually, opposition
groups come into power, Sulzberger explained, and he doesn’t want the
paper to be fighting for any particular side. "The New York Times is
nobody's lapdog,” he added.
Content Source: https://www.recode.net/2017/6/23/15855594/cannes-lions-facebook-google-advertising-recap
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