GroupM’s Kirk McDonald on the uncertain outlook for the ad economy

Today at The New Attention Economy at the Kerv Cafe, we’re focused on the future of streaming after the land-grab phase. Twitch’s Sarah Looss and Havas’s Sarah Leccacorvi join Mike to discuss “the modern gamer.”  Whalar’s Jamie Gutfreund and Collectively’s Ryan Stern discuss the rise of influencer media. Human Ventures’ Joe Marchese joins Roku’s Julian Mintz talk about CTV’s ad potential vs reality. I’m doing a live podcast recording with Hearst CRO Lisa Howard about “the modern media playbook,” and we have other great sessions around streaming with Univision’s Fernando Romero, Known’s Kern Schireson, Samsung’s Justin Evans and Vevo’s Julie Triolo.

Come by at 1 Square Mérimée, starting at noon and running until 3pm.

Tonight, we’re heading to the hills above Cannes for a Sustainable Media Leaders Dinner with execs from Semafor, Bloomberg, Puck, The Los Angeles Times, The Athletic, The Financial Times, Netflix, TikTok, Hearst, Dotdash Meredith – and tequila tasting from Komos. – BM

What does it mean to measure consumer attention? Page context and quality certainly play a role, but with Kerv Active Attention Index, you can also understand consumer attention with the video creative itself. Through this index, we measure the quality of deterministic user actions as they engage with interactive and shoppable videos. Get the free guide.

Amuse-bouche

Pump the brakes on QR: The unlikely resurgence of QR is possibly hitting a wall. Roku’s director of ad innovation says they have low engagement in TV spots.

Pump the brakes on the death of print: FT’s Brendan Spain says print advertising at the FT is up over 20%. There’s always ROI in the boss seeing the ads.

Pump the brakes on athlete media companies: The Athletic’s Sebastian Tomich is bearish on most athlete-led media companies panning out, noting that they tend to veer into vanity projects quickly.

Media’s age of efficiency

The Cannes divide is always between what people come to talk to Cannes about and the things they really talk about. And on the latter, it’s about the money. The first half of the year didn’t turn out to be as terrible as thought, but that doesn’t mean the second half is going to be gangbusters.

In a live recording of The Rebooting Show, Kirk McDonald, CEO of GroupM North America, seemed to wonder whether we’ve all talked ourselves into a downturn that wasn’t, "For the first half of this year, we saw behavior that anticipated a crash,” he said, even if we’ve had a “pretty smooth landing.”

“The thing we were worried about didn’t happen,” he added. “But I don’t think we’re seeing the kind of fulsome growth [we’ve seen in the past]”

Lauren Douglass, head of marketing at PMG, said brands have to keep experimenting, especially if they want to reach and understand Gen Z. Still, she acknowledged that it’s unlikely that we’re on the verge of renewed wild spending. “We are seeing a lot of emphasis on efficiency,” she said. Translation, cheaper stuff that performs. “I think for the rest of the year, that’s the vibe,” she said. “Caution.”

“What we’re seeing is the end of free money,” said Brendan Spain, vp of advertising for the Americas at The Financial Times, of the demise of many venture funded scale publishers. “That’s not necessarily a bad thing,” said Spain. It may just be a time where the “shiny things go away.”

One area of optimism remains in the ad industry’s promised reset of representative spending. While no one is shouting Mission Accomplished, there is confidence that progress is being made. In some cases, according to McDonald, GroupM’s clients have doubled and tripled spending on specific minority-owned media. Yet he also said overall minority-owned media remains underinvested.

But not every media and ad tech company in that sphere can handle an influx like that. The challenge isn’t so much will, but mechanics, said McDonald.

For many minority-owned media brands, “The infrastructure needs to get built up,” he said.  “It means it's difficult to spend in these environments.”

That is sort of the point of Group Black, which is not only aimed at buying up more media brands so there simply are more black-owned companies, but to aid existing brands, explained Bonin Bough, the company’s chief strategy officer.

“We thought it was just about investment,” he said. “But the pipes and the programming that needs to be created here.”

Sounds great. But seriously, are you guys gonna buy something or what?

“That’s the goal,” Bough said. He sees Group Black becoming a media holding company that both fully owns and manages some brands. But he can’t afford to screw things up. “The last thing we want to do is get that first deal wrong.” – MS

The hierarchy of Cannes

Every ecosystem has a hierarchy, and Cannes is no different. This is technically a festival of creativity, but it’s really a carnival of capitalism, so to figure out the hierarchy, start with the money.

Celebrity CMOs

There is no greater catch in Cannes than the CMO. There was a time when Cannes was all about agency creatives, but that has long since past. It’s now about the people who pull the purse strings. CMOs are wined and dined all week, feted and flattered, flown in on chartered jets by influencer networks, whisked from event to event, coptered to Monaco or speed-boated to Cap du Eden Roc. That they control budgets is simply coincidental.

Real celebrities

It’s both reassuring and depressing to know that celebrities, actual famous people, need to hustle just like the rest of us. The new celebrities: Influencers like David Dobrik, who have flocked to Cannes to play the game because they’re the new media companies.

Big tech

Here’s how you know a market is not very competitive: The CEOs of the biggest sellers of advertising mostly skip out. Cannes once attracted Mark Zuckerberg.( I saw him harangued by a Brazilian guy about privacy in a hotel lobby.) Those days are past. And he’s not along. Sundar Pichai hasn’t come to play the game. Same for Andy Jassy, despite the massive Amazon presence. This isn’t much of a Tim Cook outing. The outliers: Snap’s Evan Spiegel, who has come to Cannes for several years, and Spotify’s Daniel Ek.

Agencies and consultancies

Of course, there’s a pecking order within a pecking order. The media agencies spend money on advertising, the creatives do not, so the fedoras get to do the awards circuit but Cannes is about the money, so controlling a lot of ad budget will mean you will eat and drink very well all week.

Ad tech

The vast programmatic archipelago has spilled out of its quarantine on the yachts in the port and all over town in villas and suites. They most flush spend big on ads all over the Croisette and take a break from all the talk of creativity to chew over again why there are seemingly hundreds of identity solutions on the market.

Publishers

Most publishers keep a fairly muted Cannes presence, often melding with the service provider category. There are lunches and dinners, villas and suites, but Cannes is driven by money, and most publishers lack the financial firepower to splash out. RIP, Vice Villa in Antibes.

Service providers

Cannes is an economy unto its own. The locals cash in with inflated prices for everything, but the event is a boon far beyond Uber drivers, restaurants and hotels. There’s a sprawling apparatus of PR firms, handlers, event organizers and DJs that see Cannes as a revenue generator, not boondoggle. –BM

Nos Suggestions

Le Duplex is one of my favorite places in Cannes because it’s a surf shack and in complete contrast to the gaudy luxury hotels, yachts and villas. Located on the east side of the town, Le Duplex is mostly locals, facing a public beach and with amazing views at sunset.

Les digestifs

• Ben Smith gives Mark Penn a closeup. Stagwell often goes under the radar as a leader among a pack of alternatives to the five big ad holding companies. It has a big beach setup this year, a throwback to when the big ad holding companies used to occupy the choice locales instead of Big Tech.
• Dealmaking watch: Claire Atkinson kicks off her new Media Mix newsletter with rumblings of a NBCU-Warnermedia tie-up.
• Celebrity watch: Outside of The Rebooting dinner, the Medialink-iHeart annual dinner at Hotel du Cap Eden Roc is usually the hot ticket. This year Lizzo is the headliner.
• Freebies watch: McDonald’s is giving out McFlurries to tire CMOs near the Croisette