British newspapers have long had a snooty attitude towards this country’s £20bn-a-year advertising industry. Better to avoid mentioning it all than bite the hand that feeds, might be a summary of how most editors feel, despite the fact that advertising is something the Brits are good at.
But there are signs that things are changing. For a start, media companies know they can now build huge global audiences with a free ad-funded model. That is why Britain’s two biggest online newspapers, Mail Online and theguardian.com, were both so keen to attend this year’s Cannes Lions, the global ad industry’s most important gathering of the year, which ended this weekend.
In one of the more unlikely pairings in recent media history, the Daily Mail’s blue-blooded chairman, Viscount Rothermere, went down to Cannes to welcome American reality TV star Kim Kardashian to a party with advertising buyers on board MailOnline’s 120ft, triple-decker yacht. At the same time, on the other side of the harbour, Guardian editor Alan Rusbridger was hosting a rival bash as he wooed dozens of media buyers over dinner on the top floor of a luxury hotel, with his own star guest, actor Ralph Fiennes.
The presence of Rothermere and Rusbridger, both of whom would probably have not bothered with Cannes a few years ago, illustrates a second point. The British advertising market is buoyant, thanks to our eagerness to embrace smartphones and e-commerce, and is growing faster than in any other major developed economy. Forecasts suggest UK ad revenues will grow by at least 5 per cent for each of the next three years. Britain should overtake Germany as the world’s fourth biggest ad market by 2016.
Thirdly, there is evidence that London’s growing status as a global super-capital is driving a creative renaissance. The Brits did well in this year’s Cannes Lions awards – a good yardstick of global creativity or “the World Cup of advertising”, as WPP chief executive Sir Martin Sorrell describes it.
Adam & Eve DDB, the start-up behind John Lewis’s hit ads, was the most awarded agency of the year – a rare accolade for a UK firm – after picking up four top Grand Prix awards for its work for department store Harvey Nichols.
Its clever Christmas campaign, called, Sorry, I spent it on myself, cheekily encouraged shoppers to buy from a specially created range of ultra-cheap gifts such as paper clips and a sink plug while keeping the money they saved to spend on themselves.
Other notable British winners included Ogilvy One for British Airways, with a campaign called the Magic of Flying. An electronic billboard at Piccadilly Circus featured a small boy who stood up to point at a BA plane as it flew overhead and, in real time, the price of a ticket flashed up. As Ogilvy’s UK boss Annette King explained, this was more sophisticated than it might appear as the agency had to “triangulate” live data from three sources – the aeroplane, Heathrow flight control and BA’s own ticketing system – to pin-point the moment the jet was flying overhead and to calculate the average seat price for the coming days.
The fact the Ogilvy & Mather network of agencies is run globally by a Briton, Miles Young, and its parent company, WPP – the world’s biggest advertising group – is also British are further reminders of the UK’s strength. Ogilvy was the most awarded network for the third year in a row and Sorrell’s WPP was the most awarded holding group for a fourth year.
While many of the Brits were upbeat, there was also tension in the Mediterranean air. Cannes Lions, once just a festival of advertising, has already been broadened into a festival of creativity covering marketing and public relations. But there were signs everywhere that other industries now want a slice of this growing market.
Google rented a giant section of beach and flew in London dance band Rudimental to perform. Microsoft brought DJ Calvin Harris. Facebook chief operating officer Sheryl Sandberg held court in a giant villa. Twitter used a drone to take photos on the beachfront and lit up the tallest tower in Cannes with its signature blue bird at night.
Other industries were also present, from consulting firm PwC to US telecom giant AT&T. And then there were the dozens of new “ad tech” firms, which have devised algorithms to buy and sell advertising on an automated basis, known as programmatic trading. A number of leading advertising bosses complained to me, publicly and privately, that Cannes Lions was in danger of losing its focus on creativity. Advertising clients began coming a few years ago and now the growing presence of the tech giants has meant it has mushroomed into more of a sales conference than a festival.
“It’s all about how big is your store, your frontage, your boat – it’s like a creative village that’s become a slightly creative shopping mall,” said Ogilvy’s Young. He stressed he remains a fan of Cannes Lions, but warned: “It will have an identity crisis if it goes on.”
Others also grumbled about the quality of speakers and debate in the Palais, the main conference venue, where a pass costs more than €2,000 for the week. More activity seemed to be happening beyond the Palais this year.
Some say the British owner of Cannes Lions, Top Right Group, is too keen to make money by introducing extra awards, covering overlapping disciplines such as “branded content” and “activation”. It costs upwards of €500 per entry per category. “It’s so big it is in danger of losing its focus,” said one top UK creative. But not everyone was so downbeat. James Murphy, chief executive of Adam & Eve DDB, said: “The tech firms and the clients coming here has been good, because it instills in them a sense of the importance of creativity and innovation.”
And, surprising as it may seem, British advertising is leading the way.
Even golden geese have their limits
A key plank of Adam Crozier’s strategy as ITV chief executive has been to expand its in-house programme-making arm, ITV Studios.
Revenues have risen 44 per cent in five years and ITV Studios is now the biggest independent producer of so-called non-scripted reality shows in America, after a string of acquisitions.
The heads of these production firms are in line for big payouts, known as earn-outs, over the next few years.
But not everyone is happy at ITV Studios. Writers and producers in New York have been fighting for nearly four years for healthcare and other work benefits, and local politicians will hold a council hearing about the behaviour of ITV and the wider US TV industry later this week. In Britain, anecdotal evidence suggests considerable tension in some parts of ITV Studios.
Crozier should be wary of driving profit at all costs – unless he thinks ITV might be sold soon, of course.
Time for Ritzy to see whole picture
Staff at the Ritzy, a boutique cinema in Brixton in south London, went on strike on Saturday for the seventh time since April in their fight for the London Living Wage of £8.80 an hour. Picturehouse, the arthouse chain which owns the Ritzy, says it cannot afford the wage, even though the company was valued at £47m only 18 months ago when it was bought by Cineworld, a cinemas group which makes annual profits of £31m.
It is not illegal to pay workers less than the Living Wage, but it reflects badly on Picturehouse. This is a business that trades on its reputation as a good corporate citizen, contributing to the local community and culture. Yet it is failing to live up to that image as far as its staff in Brixton are concerned.
The strikers have won support from big names including Ken Loach and Will Self, while social media sites are full of hostile comments about Picturehouse. A national boycott is now possible after Frances O’Grady, the head of the Trades Union Congress, joined the picket line.
Every business, particularly a media business, should know that, in the age of Twitter and Facebook, their best advocates can be their own employees. Cineworld seems oblivious to this fact.