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Publicis Groupe awards pull-out: profound statement or cynical cost-cutting effort?

The chief executive officer of Publicis Groupe, Arthur Sadoun, “made a profound statement” against the “profit-making” Cannes Lions festival by banning its agencies from entering, the global CEO of marketing consultancy TrinityP3 has claimed.

Darren Woolley, who was formerly a creative director at J. Walter Thompson Melbourne, claimed the French holding company’s surprise decision to stop all marketing and awards efforts for a year was a “sign of the times” following Cannes Lions’ decision to float on the London Stock Exchange.

Darren Woolley

Speaking to Mumbrella Asia, Woolley said that while the move risked Publicis Groupe losing some of its to creative talent, it would ultimately allow them to “stop wasting money and focus on transforming the business”.

He added: “This is the biggest statement made on this issue and I think some of it really comes down to Cannes Lions’ decision to float on the London Stock Exchange. This really showed that Cannes is a business that is run to make profit for shareholders. The floatation sent a clear message to the holding companies that award shows are being run to make money.

“In the last 12 months, this has been rubbed in the faces of holding companies. This, plus the number of scam ads, seem to have come together to make Sadoun say ‘enough is enough’. This is a very profound statement.”

Although Sadoun’s decision stretches across all awards and events, Woolley said it was significant that his announcement was timed for when Cannes was actually taking place. “The festival is the pinnacle of global creativity,” he explained. “There are an increasing number of clients going there every year. [Sadoun] made the announcement for maximum impact and this was the place to do it.”

However, D. Sriram, the founder of Shanghai-based digital agency DROIDD and former Starcom APAC CEO, said Publicis Groupe’s move spoke more of cost-saving than making a genuine statement about awards.

He said: “Given that there is a handful of global media agencies and creative agencies, and far more awards shows than there are holding companies, everyone wins something somewhere these days.

“In that context, if Publicis Groupe were making a statement about fewer awards shows and more meaningful evaluation of good work – like choosing a few awards shows to participate in as a symbol – that would make a lot of sense.

D. Sriram

“However, from all the press surrounding this announcement, it seems like the decision is driven by cost saving imperatives. There’s nothing wrong with that, inherently, but it’s clearly not intended as a stance about awards, the industry or anything like that. At best, it says that awards don’t add enough value for Publicis Groupe to justify spend the money on participating in them – which is perhaps a bit of an extreme view.”

After the news about Publicis Groupe, Sir Martin Sorrell, the CEO of rival holding company WPP, said “jury was still out” on whether he would follow Sadoun’s lead.

Speaking at Cannes, Sorrell said: “There is gouging that goes on and there is peak time pricing. Cannes in June is not the cheapest place in the world to be,” according to The Drum.

However, according to a report by The Wall Street Journal earlier this year, WPP has already cut its awards budget down by 25 per cent, while Dentsu Aegis was reportedly attempting to “mitigate against market weakness”.

Commenting on the holding groups’ spending cuts, Woolley added;  “One of the biggest issues for agencies is remuneration: advertisers and clients often will not cover award costs. When they are looking for an agency, they don’t put a lot of credence on the awards an agency has won – and they are not the reason they will choose an agency. Clients are now asking whether they are really worth it.”

Woolleys’ views on client spending were echoed by Shufen Goh, the founder and principal of pitch consultancy R3. “The whole Cannes expenditure is prohibitive for most companies,” she said. “And we’ve never had a client insist on an agency being on a shortlist because they won a Cannes Lion.”

Shufen Goh

However, she argued that Publicis Groupe’s choice to impose a “blanket ban” on all award shows entirely could be damaging for the company in the long-term. “We have clients who care about effectiveness awards. A blanket ban for all awards clearly helps to grab headlines, but it may hurt Publicis ability to benchmark themselves against their competitors on their effectiveness.”

Yesterday Cannes Lions managing director of Jose Papa said “there were a lot of misconceptions” about the festival’s expense. Speaking to The Drum, he said: “Look, we know that depending on where you are in the world, to come all the way to the south of France can be a big commitment. It’s why we put so much focus on value for money, to make sure it’s accessible to as many people as possible. We have passes which start at €1,595 (S$2,472) for two days, and attendees under 30 can save up to 45 per cent.”  

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