Wall Street Journal – CMO Today: In Cannes, the Ad Tech Flotilla Is At Full Steam
CANNES, France — Advertising technology firms have proliferated in recent years, but the hyper-competitive industry faces challenges as it attempts to overhaul the way ads are bought and sold. Marketers say many ad tech companies are undifferentiated, some public investors seem disillusioned with their business models, and venture capital funding may be running dry.
But you wouldn’t guess that, judging by the scene on the French Riviera this week.
Ad tech firms have been growing their presence at the Cannes Lions advertising festival for the past few years, but in 2015 they’re making a mark on the event like never before. Yachts rented by firms such as Rubicon Project, xAd, OpenX and Millennial Media line the Cannes port, while companies like MediaMath, Index Exchange and others have opted to entertain in rooftop venues overlooking the beach.
Those yachts and rooftop parties don’t come cheap, but executives say it’s money well spent. Marketers and agency buyers aren’t easy to get in front of, and Cannes affords them the ability to lure important decision makers to meetings over bottles of rosé wine or lunches overlooking the Mediterranean.
“Part of it is showmanship. But a large part of it is convenience,” said Index Exchange Chief Executive Andrew Casale.
“More than ever, Cannes Lions has become the tent pole event for attracting senior decision makers across the industry. And in a much nicer environment than New York or Las Vegas,” said Terence Kawaja, CEO of strategic advisory firm LUMA Partners.
It’s a tactic that appears to work. One ad tech salesperson said he had a total of eight agency meetings lined up on Tuesday alone. Execs say that type of access and efficiency is the reason they’re growing their investment in the festival.
MediaMath CEO Joe Zawadzki said he’s seen a bigger Cannes investment from ad tech companies across the board this year. His company sent around 25 staffers, co-sponsored a glamorous rooftop event space for the week, and is doing a talk at the innovation portion of the festival for the first time.
But it’s not just marketers that ad tech firms are pitching to this week, of course. It’s also each other. Many have predicted consolidation of the confusing and fragmented ad tech marketplace will continue to accelerate over the next few years, perhaps making it essential for those companies to put on a good face in Cannes.
“Everyone here is for sale,” one online ad executive said.
That’s primarily why Mr. Kawaja and his company attend.
“Everyone is talking deals, especially late at night. We are actively working deals between the cocktail events,” he said.
Another incentive for ad tech firms at Cannes is the chance to expose themselves to the global marketplace. Marketers are increasingly thinking about and managing their advertising on a more global basis, and that spells opportunity for ad tech companies looking to grow.
“Ad tech is a global opportunity now. Supporting global business is table stakes. There’s something like 40 markets represented [in Cannes this year]. If you want to play in the global pond, you have to be here,” Mr. Casale said.
And judging by the range of ad tech companies in attendance at this year’s festival, a growing number do. Tech giants such as Google, Microsoft and Facebook have invested heavily in their Cannes presences for years, but they’re now joined by swaths of online ad firms offering everything from data-informed ad targeting, to new digital creative capabilities, to the latest in location-based mobile technology.
Some even complain that ad tech is taking over the festival and that the creativity the event is supposed to celebrate is being drowned out by talk of algorithms and automation and data.
According to AppNexus CEO Brian O’Kelley, it’s not a case of ad tech taking over, but more a recognition from the industry and from marketers themselves that advertising is becoming increasingly digital. There’s a reason three-year-old firms such as Snapchatcause a stir when they come to Cannes for the first time: marketers are excited, and perhaps threatened, by them.
“AppNexus is at Cannes because it’s the epicenter of digital advertising innovation and conversation,” Mr. O’Kelley said. “Snapchat isn’t ad tech, nor is Daily Mail — but they are representative of the future of advertising.”