Supermetrics 2024 Cannes Recap 🌴

Last week, I had the privilege of attending one of the most revered events in the advertising industry: the Cannes Lions International Festival of Creativity. Generally known as just “Cannes”, this tentpole event brings over 20,000 industry professionals to the sunny south of France every June to celebrate great works of advertising.

What is Cannes?

This trip was a personal milestone for me for several reasons. I first became aware of Cannes when I started at Wieden + Kennedy just six years ago. Walking the hallowed halls of W+K filled with portraits of iconic creative leaders, I quickly picked up on the prestige emanating from the discussions surrounding Cannes. To me as a data analyst, it was an exclusive event reserved for our executives, the business development team and any of the creative teams fortunate enough to have their hard work earn a coveted nomination for a Cannes Lion award. 

As I’ve grown in my career, I’ve learned that, for many in the industry, Cannes is a polarizing event. It is often seen as a reward trip for teams that have poured their blood, sweat and tears into their work and have had it recognized by some of the greats in the industry (not to forget the masterful PR teams that craft their submissions each year). For others, it is seen as the industry’s biggest “schmoozefest”, where agencies treat their clients to blowout parties on hotel rooftops and yachts with ceaselessly flowing rose and champagne. For some, it represents an excellent place to meet new people, learn about the industry and do business development.

Based on my recent experience, I can report that all three of the above are true.

Supermetrics at Cannes

Supporting Supermetrics’ mission of growing and evolving to meet the demands of our largest customers, our leadership team decided to send a group of us to Cannes this year to see how best we should engage with an event of this caliber in subsequent years. Think of it as a reconnaissance mission in preparation for something much bigger in the future. Under the guidance of 15-time Cannes veteran and Supermetrics’ recently appointed VP of Corporate Development, Mandeep Mason, we assembled a crack team of versatile players to maximize the impact of our trip. 

Lauri Putkinen, our partnerships lead in EMEA was a natural choice given his relationships with all of the ad platforms we work with and prior experience at Cannes with a previous employer. Daniel Lobo, who looks after our strategic accounts at Supermetrics, is no stranger to big agencies and brands and easily made the cut as well. My knack for being able to convince people that I know what I’m talking about when it comes to ad tech and data seemed to secure me the final slot in the lineup.

The plan was simple: maximize learnings, meet people and identify new business opportunities. Armed with only our industry contacts and a modest Airbnb off the main Croisette (this was a new Cannes-specific term to me), we got to work setting up our calendars. Thanks to the help of the whole Supermetrics CSM and sales team, we managed to secure meetings with several of our partners and customers to bring some structure to the week between the scheduled sessions. Through these interactions, we were able to cut through the normal day-to-day of ad accounts and connectors and get to the heart of what people actually care about.

Industry learnings

I’m writing this post on the Monday after Cannes and I already feel like I’ve seen a dozen “Cannes recap” posts from folks who attended the event and have published over the weekend. It’s actually shocking to see the variety among these posts, which indicates that you can have a very different experience based on who you’re speaking to and which events you’re attending. 

Regardless, I’ve conferred with my colleagues and we’ve aligned on the following topics as key takeaways that are meaningful and relevant to our business and likely those of our customers:

Data disruption & first-party focus

Front and center to nearly every discussion was the (final) impending demise of third-party cookies and its ramifications for the ad tech ecosystem. Despite the ample runway the industry has been afforded, there are a surprisingly small range of robust alternatives alternatives available. 

Identity-based marketing that is reliant on third-party audience data has been a staple of the industry for over a decade. Tools like DMPs, audience graphs and DSPs have relied heavily on this technology over the years and, based on the conversations we had, have not devised an industry standard alternative for identifying users. Advertisers who rely on large audience graphs underpinned by 3rd party cookies will find that their media buying strategies are rendered ineffective once they are no longer recognized in Google Chrome. Reliance on this technology in Europe has waned at least since the implementation of GDPR back in 2019, but it is still alive and well in the US. 

Further, concerns about a patchwork of legislation advancing in many states in the US has advertisers thinking about the cost of global compliance and risks of noncompliance. If a dozen US states implement CCPA or GDPR-like initiatives resulting in a large compliance burden, advertisers will need to think twice about what kind of data they use for measurement and targeting. A significant mark of this was Oracle’s intentionally-timed announcement during the week of Cannes of its complete divestiture of all of its ads businesses that largely rely on this technology. 

What’s at stake here? For publishers that rely heavily on programmatic media revenue, quite a bit. Discussions we took part in suggest that premium publishers are looking to bring as much of their revenue in through direct deals as possible. The best publishers have seen this coming for some time now and have instituted paywalls as an alternative source of revenue or at least login walls so that they can serve their users more targeted ads and provide measurement to their advertisers. This is a trend that will continue to advance as the cookie deprecation deadline approaches and US privacy regulations advance.

Now, if you’re only advertising on Google and Meta and are thinking, “gee, good thing I don’t have to worry about that since I don’t advertise on the open web”, think again. While it’s true that walled gardens (as they are known) like Google and Meta have vast amounts of first-party data that provide novel targeting and measurement solutions, neither of them are fully immune from cookie deprecation. 

Chances are if you’re advertising on a walled garden with any amount of scale, you have a variety of conversion pixels installed across your web properties to help send those conversion events back to the ad platforms. Unfortunately, the loss of third-party cookies means that these pixels will largely be rendered ineffective unless combined with a first-party identity solution. While there are ways to do this that involve identity resolution mechanisms and server-side tagging, they are complex and are a long way from being standardized for most advertisers.

This is why it seems like every ad platform along the Croissette is investing heavily in their own Conversion API (CAPI) solution. CAPI allows advertisers to pass a series of signals, including attributes about the conversion, back to the ad platform by making an API call instead of firing a JavaScript-based pixel in your browser. These signals are super valuable for advertisers because it helps the algorithmic ad buying mechanism target more valuable customers, ensuring more efficient CPAs and ultimately unlocking higher spend levels. 

Now, in order to use CAPIs effectively (and in a compliant way for that matter) you need to capture and own that user data. This is where the second piece of the puzzle comes in the form of first-party marketing data warehouses. Advertisers that collect this data with consent can not only pass it back to the ad platforms to enhance the buying algorithms, they can also use it to build and activate audiences across platforms. What might look like a lead in your CRM, a conversion on your eCommerce tool or a form fill on your site may eventually translate into a first-party data record in your warehouse that becomes vital for your marketing team’s identity-based strategy. 

Advertisers that are ahead of the game are already building up their first-party data assets and have been at it for a while. These will be the brands that master one-to-one communication at scale and reap the benefits of their first-party data strategy. They will also be the ones to benefit the most from data clean rooms once they are more widely adopted.

Retail media

In a world where 3rd party audience data cannot be easily used for targeting or measurement, the fortunes of businesses with vast amounts of data have gained leverage. Enter retailers like Amazon, Walmart and Target with large troves of first party customer data thanks to their loyalty programs and all of the transaction history that goes along with it. Companies with sizable audiences are investing in operationalizing this data by making it available to advertisers and monetizing their all of their impressionable surface area. Think in-store displays or sponsored products on retailers’ websites or apps.

Retail media networks (RMNs), as these ad networks have become known, remain one of the fastest growing segments of media growing at over 20% per year compared to single digit growth of overall ad spend. The targeting options on retail media networks are particularly attractive to brands that historically have struggled to build and activate audience data. CPG brands can use the data that retailers have on their customer to target users at the household level based on things like their preferred shopping location and purchase history. 

It’s not just retailers that are waking up to the possibility of monetizing their customer data. Large fintechs and financial institutions like Chase Bank, Revolut and Klarna are now standing up advertising operations that offer advertisers the ability to reach consumers based on their personal spending habits. These have become known as Financial Media Networks (FMNs).

You might think that these new media networks would only be a relevant for marketers advertising products that are purchased in stores or selling financial products. Interestingly, conversations we took part in suggest that there’s a big play for both RMNs and FMNs to start serving the needs of non-endemic advertisers with their inventory as well. For example, say you’re advertising cars and want to target a segment of shoppers who might be primed to buy a new car. Targeting an audience who has historically purchased car parts for older models might be more receptive to an offer to newer cars, even though they wouldn’t be purchasing the car through the retailer.

The evolution of agencies

Everywhere you look, you can see that agencies are getting squeezed. Most of the publicly traded agencies are going to eke out single digit growth percentages this year. The small to mid-sized agencies myself and my team speak to on a daily basis are leaving no stone unturned looking for ways to enhance efficiency by boosting revenue or reducing costs. Recent reports about a resurgence of principal media suggest that the practice of arbitraging media hasn't been completely ruled out despite the array of transparency directives present in MSAs these days. 

There are a variety of reasons for this. Global ad spend is only growing by a single digit percentage this year (even with the Olympics and a US Presidential election). Agencies are facing more competition than ever before from consultancies and even their own clients who are, piece by piece, bringing core functions in-house. 

One could even argue that the basic economics of hiring an agency have been slowly changing for the last decade. It used to be that hiring an agency was the economical choice due to the high fixed costs associated with producing creative, buying media, acquiring and running the technology required to traffic it and having the right industry contacts to put it all together. With the rise of self-serve media buying options and a myriad of options for producing creative (see the section about AI below), those costs have dropped sufficiently to warrant many brands to consider the merits of in-housing. 

Amid these macro and macro trends, the best agencies are innovating in two ways: doubling down on efficiency by outsourcing to experts and deriving more of their revenue from systems integration work. 

For the former, there’s an opportunity here for both large and small to mid-sized agencies. For large agencies, now is the time to really look at the full spectrum of what your clients want and what you do in house. You might have a full service offering, but do you really need to do all of the work in house? Is there a smaller and more specialized agency that could do an even better job at a fraction of the cost while you maintain the core relationship with your client? Without naming names, I’m seeing a lot of the brightest full service agencies reconsider the best use of their team’s time in ways that lead to a more diversified supply chain with ultimately better efficiency and outcomes.

Now let’s talk about SI work. It’s no secret that large consultancies have wanted a piece of the juicy media pie for quite some time and have made strides in that direction over the years. Large agencies now find themselves competing with consultancies that are taking an increasing share of what would originally be their revenue and continue to do the systems integration work with their armies of consultants that they’ve been doing for years. 

Again, here’s the opportunity for agencies. Based on what you’ve read above, you know that the brightest brands are going all-in on their owned marketing data warehouses. The agencies who are ahead of the innovation curve are starting to size up projects that enhance a brand’s ability to use its first-party data to its advantage. This doesn’t mean bringing the brand’s data into your agency’s data warehouse, but rather building the data warehouse on the brand’s infrastructure using their systems so that they are the ultimate owners and “data controllers”, in regulatory parlance. With full service agency teams working alongside technical teams dedicated to running large-scale IT projects like Adobe or Salesforce implementations, the opportunity to tie these integrations to strategic marketing initiatives is very enticing and likely to generate the stickiness that agencies desire in their client relationships. 

You waited for it - AI

You’d be hard-pressed to find an industry leader not talking about AI publicly for fear of not staying relevant. While I may sound a bit like a curmudgeon on the topic, I do share the same enthusiasm for AI as many in the industry. I do believe that it is a fundamentally transformative technology and the entire industry, neigh, the entire world will look very different in ten years time because of it. 

However, when it comes to the application of AI to today’s marketing challenges with today’s capabilities, I know we still have a long way to go. There’s an old saying in computing that applies here: “garbage in, garbage out”. With the state of most company’s marketing data assets, I can’t say I have high hopes in the immediate future for the outputs of AI.

That said, these are surmountable obstacles and will be tackled in time. Once they are, these are the three main things I’d say stood out based on my Cannes experience: algorithmic media buying, creative production and brand safety. 

Let’s start with the AI that everyone is using but nobody is talking about. I’d argue that two of the most commercially successful AI-based products globally (not just in the advertising industry) are Google Performance Max and Meta’s Advantage+ campaigns. These campaign types have grown in popularity over the years due to their simplicity, wide range of available inventory and clear focus on results. While not perfect by any means, this actually represents most advertisers' first foray into the world of AI-powered marketing, whether they realize it or not. Amazon strategically announced their own Performance+ campaign type in the weeks leading up to Cannes and it’s clear that other platforms are hot on their heels. 

Next is creative production. This is the area where I believe the delta between the hype and reality is probably largest. I’ve yet to see a compelling set of ads generated by AI that pass the quality standards set by the most stringent of advertisers without a significant amount of manual assistance. That said, without being an expert in the space I’m not sure if this is a three-month problem or a three-year problem. 

I do imagine that the impacts of readily available, high-quality creative production will have dramatic implications for premium video inventory like the kind that runs on CTV. Imagine if your local car wash could produce an ad with the same level of quality as McDonalds and have it run during the same program without looking out of place. That will have dramatic implications for what is considered today as premium inventory. 

Testing and scaling simpler static creative assets with products against plain backdrops is likely already a solved problem. That said, I don’t think those are the kinds of ads that Cannes-goers are likely super concerned about. 

Lastly, as my colleague Daniel Lobo pointed out, concerns around brand safety and running ads alongside AI-generated content are just as likely to be addressed with AI in the future. Imagine a world where you can quickly use AI to determine if your ads are running on domains considered MFA (made for advertising). Further, imagine using AI to detect if your ads are running alongside AI-generated content. We might still be a ways away from that, but it’s clear that we’ve already entered a cat-and-mouse game that is only just heating up. 

Will I see you next year?

If you thought this post was going to contain salacious gossip about the best parties, confidential information about the latest M&A rumblings or tips on where to get the cheapest drinks in Cannes, I am sorry to have disappointed you. What I can say is that I’m happy to speak in more detail on any of the above topics if you happen to catch me in person at any of our upcoming Supermetrics SuperSummit events.

While our return to Cannes next year is by no means assured, I am truly grateful for the experience. I certainly hope that I’ll be able to meet you at the Palais next year.