The biggest global gathering of advertising industry professionals wrapped up this past weekend as the major players that drive the half trillion dollar global advertising market came together for the annual Cannes Lions Festival. There, I spoke on the future of OTT and digital advertising and what the biggest brands, agencies and technology companies are planning for the year ahead.
This was the year big tech leaned in heavily to shape the advertising conversation. Facebook, Google, Twitter, Snapchat, Pinterest, Microsoft, Pandora and Amazon all had a significant presence at Cannes last week. This investment reinforces that the future of advertising — and consumer engagement overall — is migrating rapidly to digital channels as digital advertising spend is now projected to reach $520 billion by 2023.
Within the continuing move to digital, there are some specific trends that were top of mind for agency and marketing execs alike. From the expanding and ever more complicated regulatory landscape – such as GDPR, the CCPA and other regulations being discussed and implemented around the world – to OTT and streaming’s effect on broadcast advertising, and the desire for marketers to break the Google and FB stranglehold on ad spend, this year’s Cannes ushered in a renewed sense of urgency and purpose from every aspect of the marketplace. Here’s a quick debrief on the three key threads the advertising industry dug into deeply at Cannes this year:
#1 – Privacy regulation
Following a number of high profile privacy bruises, the advertising and technology sector has shifted its stance on regulation. For many years the mantra was focused on
Martin rightly cautioned that we must be “extremely careful” as we move forward to craft new regulations that don’t embolden the likes of Facebook and Google at the expense of market competition and innovation. It’s now accepted in the industry that the unintended consequences of Europe’s landmark GDPR regulation served to strengthen the dominance of the big players. With California’s new law coming online soon and many other state laws being considered, there is an
#2 – OTT
Hulu, Netflix, Disney
The other OTT trend to watch is that competition for Netflix revenue is about to get a lot steeper with a bevy of other services coming online, including budget-friendly offerings from Disney and Apple and a new service just launched this week by Viacom in partnership with BET and Tyler Perry. Most US consumers now
#3 – The Google-Facebook duopoly
The number one concern of marketers, according to a recent eMarketer study, is the continued dominance of Facebook and Google. These concerns played out across Cannes. “Everybody wants to pull dollars away from Google and Facebook,” said David Spector, co-CEO and co-founder of ThirdLove. Michael Roth, CEO of IPG added “Everyone talks about government regulation breaking [Google and Facebook] up. But what really will happen is our clients will start not spending with them. And that will be the biggest effect eventually if it doesn’t get corrected.”
The sticking point for everyone is the dramatic asymmetry that exists today where, according to Comscore, consumers only spend about a third of their online time within the walled gardens of Facebook and Google yet nearly two-thirds of all digital spend flows into those channels. The net result is that marketers are significantly over-indexing spend on too few platforms and the content creators across the open web are losing their fair share of revenue. Meanwhile, Amazon is vying to be the third ad tech leader of the oligopoly with the completion of its ad tech stack through its purchase of Sizmek. There is a deep desire to address this dominance in 2020 and to unlock greater spend on the open web by taking the best parts of the walled gardens and making it more accessible.
Overall this felt like a much different Cannes from last year. This year was definitely a “glass is half full” Cannes, whereas
Consumers are rapidly migrating away from traditional television platforms but they are showing a huge appetite for streaming video and a desire for streaming advertising models, which advertisers can look forward to. Overall, Cannes demonstrated that advertising, creative and technology players have huge opportunity to recast engagement for a privacy complaint, always connected consumer landscape.
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