Gideon Spanier: Ad-tech takes centre stage as media types party loud in Cannes

The future of the media industry will be decided by who has the biggest yacht, the biggest private beach and the biggest celebrity or rock-star guest. At least, that’s what a visitor to this week’s Cannes Lions, advertising’s biggest annual festival, could be forgiven for thinking.

No expense has been spared by agencies, media owners and tech firms competing for attention at this global get-together for more than 10,000 delegates — plus assorted hangers-on, from headhunters to Wall Street analysts.

It is why Rupert Murdoch’s News UK, the owner of The Sun and The Times, has tonight got Take That and Fatboy Slim performing aboard its yacht in the packed harbour at Cannes. At the same time, just two berths away along the quayside, MailOnline has an even bigger boat on which singer-songwriter Jason Derulo and other music stars are due to perform. The joke is that the two British news groups are going to hire extra loudspeakers to drown out the noise from each other’s parties.

There are endless other celebrity events, panel discussions, parties and gigs during the week. Google’s Eric Schmidt, Anna Wintour of American Vogue, actress Gwyneth Paltrow and singers Iggy Pop, Flo Rida, Wyclef Jean and Jess Glynne are among those speaking or entertaining.

It would be easy to forget that Cannes Lions is meant to be a festival of creativity, celebrating the best advertising from around the world, with a series of awards for digital, press, outdoor and so on, climaxing on Saturday with the best TV and film ads. But it morphed into a business networking and sales event long ago.

The fact News UK has chosen to come to Cannes for the first time — two years after MailOnline first rented a yacht, with star guest Kim Kardashian in tow — shows how advertising and media has expanded from being a national to a global business. Google, Facebook and AOL (which is a much bigger presence this year after taking over Microsoft’s ad sales) led the way by becoming worldwide platforms — and they can afford to rent the prime private beaches along the main seafront, La Croisette, to woo clients by day and entertain by night.

No wonder some of the traditional media companies have felt the need to put on a big show at Cannes to prove they can match the Silicon Valley goliaths — or at least stop all the advertising dollars shifting to the new digital media owners.

The complaint is that this festival has turned into an “ad-tech jamboree” and lots of the smaller tech and software companies have also rented yachts as they seek customers — or a takeover.

Yet it makes sense that tech dominates so many conversations because it is not just the ad industry that is being disrupted by technology. Every company is looking for digital transformation. The challenge for the ad and media agencies is to prove they have the skills and talent at a time when the tech companies and City consulting firms in Cannes are trying to eat their lunch — even without problems such as the blocking and viewability of ads.

Cannes Lions itself is of interest to investors because it is owned by Ascential, which listed on the London stock market in February. The festival last year made £42.5 million in revenue, with a group operating margin of about 38%. A single award entry costs 499 (£387), and this year there were 43,100 entries — up 7% this year thanks to the introduction of yet more categories.