Spotify, which announced layoffs in its podcast division this week, is still hosting its nightly concerts on the beach headlined by some of the biggest recording artists. Spotify also will host a lineup of daily talks on its beach, covering topics such as the future of it podcast business. Pinterest will be back in its usual beach location across from the newly refurbished Carlton hotel; and Snapchat is setting up at a mansion on the Croisette, the strip of hotels that face the Cannes beach. TikTok is setting up in a private “garden” at the Carlton and Amazon is running the port, a mega-installation near the marina and the yachts, which it occupied for the first time last year. Reddit plans to rebuild a clubhouse along the beach this year, similar to one it had last year. In April, Reddit said this would be its “biggest one yet.”
Twitter, meanwhile, gave up its prime beach location this year, which is being taken over by influencer agency Influential, signaling the biggest change to the Cannes landscape. Elon Musk has battled with marketers since he bought Twitter in October and the company has had a reduced presence at all the big conferences, including SXSW and CES.
‘It’s very much a sales event’
“Last year, it felt like everyone had to be at the party, but it’s just a little more toned down now, just in light of the economic situation,” another agency executive said, reflecting the mood of a number of ad industry insiders who spoke to Ad Age.
The temperature of tech companies is an important indicator of the health of Cannes because they’re not just big media properties that sell ads—they also buy the ads. When the brands pull back, that could trickle down to the agencies, which send their teams that service clients. Major holding companies and their agencies, including WPP, Omnicom, Dentsu and Publicis Groupe, all have people heading to Cannes.
WPP, the world’s largest agency holding company, has a reserved beach area across from Hotel Martinez. WPP’s GroupM will be stationed on the Martinez’s rooftop.
Publicis Groupe typically does not have a major activation at Cannes, such as its own beach club, but it will be at the event per clients’ needs, a spokesperson said in an email.
“With the platforms, there were significant layoffs and uncertainty with layoffs,” said another ad agency insider, who spoke on condition of anonymity. “That led some partners to send smaller contingencies than usual.”
For the ad agencies, that means they have to justify every person they send to Cannes. “It’s very much a sales event,” this insider said, which means “don’t do meetings you can do at home.”
Cannes is coming at a choppy time for the digital ad world. Advertising dollars are still flowing, but the industry is growing at a slower pace than anticipated. IPG Mediabrands’ Magna and Dentsu reduced their 2023 forecasts for ad spending growth to 3.4% and 3.3%, respectively.
The muted expectations come from a multitude of factors including an uneasy economic outlook, war on Europe’s edges and inflation. Tech companies, including Amazon, Meta, Google, Microsoft, Snapchat and Spotify, have been cutting workers. Meta recently announced its third round of layoffs, while Musk’s Twitter has cut about two-thirds of its employees since the billionaire took over.
“It just makes everyone a bit nervous,” said another agency executive, referring to the tech layoffs and how they could impact deal-making at Cannes.
Also, Musk’s activities have had far-reaching impact on the ad world. Linda Yaccarino is Twitter’s new CEO, tasked, among other things, to try to bring back advertisers. Yaccarino, who was previously NBCUniversal’s chairman of advertising sales and partnerships, would have led the media giant’s programming at Cannes, but it now appears Yaccarino won’t make an appearance at Cannes, and NBCU had to switch up its strategy, according to the people familiar with the network’s plans.
All of the U.S. tech companies are in a moment of change. There is more competition, including from TikTok, which will have an official presence at Cannes for the second year. Apple is attending Cannes, too, as it builds an ad tech platform for iPhones and Apple TV. Apple’s data-sharing policies, in the name of privacy, have flummoxed Meta, Google, Snap and all the big platforms that rely on iPhone visitors to fuel their ad businesses inside apps. Google and Meta have both been rebuilding their ad platforms to keep advertising operational as data-sharing becomes more restricted. Google Chrome plans to remove third-party cookies from the open web next year.
Snap, in particular, has been in a tight spot. Last year, Snap announced it would cut 20% of its workers in a major reorganization, and this year its first-quarter revenue declined by 7%. Snap is still going to Cannes, working on an art installation with Disney.
Michael Kassan, CEO of MediaLink, the management consulting firm, said Cannes has bounced back to pre-pandemic prominence. Last year was the first year Cannes was in-person since the pandemic began. Kassan has heard rumblings about layoffs as it relates to the optics of heading to Cannes but said that should not deter brands or tech platforms.
“You’re looking at it through the wrong lens,” Kassan said. “If you look at Cannes as a place that you drink rosé and get a suntan, then it’s never a good look, whether you’ve had layoffs or not. If you look at Cannes as the most efficient four days or five days of your year, then it’s a different story.”
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