Campaign reported on how Cannes Lions produces profit and perpetuates the
According to the report, the awards machine runs on a “self-reinforcing business model” that reflects the self-reinforcing segregation in the field—along with the industry’s problems of self-centeredness, self-absorption and self-regulation that are leading to self-destruction.
An IPO filing showed Cannes Lions generates $59 million in annual revenue. How many multicultural advertising agencies make that much money per year? BTW, does the enterprise employ minority vendors—besides the celebrity entertainers?
Cannes Lions, appropriately enough, is the Academy Awards of adland. Except the advertising industry is much more whitewashed than Hollywood. No, really. The premier awards festival exposes the exclusivity and the exclusion. The ruling majority decides which work is best and who is most talented. Hell, the Caucasian committees even introduce categories and trophies to extend income, expand country-club cliques and establish faux philanthropy. Recent years have seen new awards for holding companies, clients, pharma and White women.
Imagine if Cannes Lions honored multicultural advertising. Unfortunately, there’s simply no money to be made with such an effort. Plus, it would require crafting Lions from crumbs.racism discriminatory exclusivity in the advertising world.
IPO filing reveals how Cannes Lions makes $59M in annual revenue
By Douglas Quenqua
Constant expansion and a “self-reinforcing business model” fuel growth of adland’s most prestigious (and expensive) awards show
The Cannes Lions International Festival of Creativity earned $59 million (£41m) in 2014, up from $43 million (£30m) — or 37% — in 2012, according to a prospectus released by parent company Ascential in preparation for its IPO on the London Stock Exchange.
Though full-year revenues were not available for 2015, the festival’s revenues in the first three quarters of the year increased $9.2 million (£6.4m) over the same period in 2014. Revenues for 2013 were not disclosed.
The disclosure form released on Tuesday provides a first-time glimpse into the financial performance and growth strategy of the ad industry’s most prestigious — and expensive — awards show.
The festival shows healthy year-over-year revenue growth, due in part to a “self-reinforcing business model” in which agencies must compete to win Lions because they have convinced clients of their value, the document says.
“Agencies themselves have promoted the awards such that their clients now recognise a Lion as the barometer of an agency’s creative talent, and agencies consequently compete to win Lions and market their Lions wins to their clients, reinforcing the circle,” the prospectus says.
Though longtime Lions participants may find little in the 240-page document they didn’t already suspect, it nonetheless provides confirmation of the festival’s financial dependence on agencies and their clients — which goes far beyond mere entry and delegate fees. For example, the prospectus boasts of business advantages such as “creative firms who promote the festival for their own marketing purposes at no cost to Cannes Lions,” industry players who “suggest speaking slots and pay all speaker fees” and “eminent creatives who donate their time free of cost” to act as judges.
As evidence of the strategy’s effectiveness, Ascential cites its Customer Value Retention rate — the amount of money repeat customers spend at consecutive festivals — as an impressive 94% for 2015. From 2012 to 2014, the festival’s yield per delegate increased by a compound annual growth rate of 8%, and award entries per yield increased by 10%.
Though the prospectus doesn’t include a breakdown of revenue streams for the Cannes Lions Festival itself, an itemization of Ascential’s entire Exhibitions & Festivals division — of which the Cannes Lions is the largest event (30% of revenue) — does provide clues. In 2014, the division generated 47% of its revenue from selling exhibition space, 19% from delegate fees, 14% from award entries, 7% from sponsorship fees and 12% from other services.
Laying out plans for future growth, the prospectus details a strategy that will be familiar to agency creatives: new categories, more VIP delegate options and expanded late fees.
“The Group intends to increase Customer numbers by developing new products to attract new Customers and leverage existing products to enter adjacent end-markets,” the prospectus states. “For example, the Group intends to continue to utilise Cannes Lions’ brand prominence and customer relationships to develop new propositions like Lions Innovation and thereby attract new Customers in adjacent end-markets.”
Launched in 2015, Lions Innovation attracted 845 award entries and 485 paying delegates, 63% of which were new to the festival. Lions Health, launched in 2014, generated $1.9 million in revenue last year.
Entry fees for the 2016 Lions range from about $600 to $1,400, placing them in the top tier of ad industry award shows. Entry fees for the 2016 Clios range from $500 to $1,000, and Effies fees run from about $500 to $1300. All such shows offer the option to file past deadline for those willing to pay an expanded fee.
Cannes Lions is seen as one of the most prized assets in the Ascential empire, which also owns trade shows Money20/20 and Bett, titles such as Drapers, Nursing Times and Retail Week, and the retail data company WGSN. According to the prospectus, it accounted for 13% of total group revenue in 2014.
2 comments:
White people giving awards to white people, judged by white people, paid for by white people.
The Oscars? No, Cannes Lions.
A minority ad agency in America earning crumbs has to save pennies and nickles all year to pay an entry fee to compete against a white ad agency that out-earns them x100, and who always has white friends and colleagues on the jury.
Adding insult to injury, the white American ad agency with the deep pockets and the money for 80 submissions are increasingly putting up their all-white team's "total market" or all white women girl-power work in diversity divisions, Cannes and other competitions included, winning, then doing press releases about their "award winning commitment to diversity."
There's absolutely no way for the few remaining minority ad agencies in the USA to win or compete against agencies dropping tens and hundreds of thousands of dollars on entry fees and travel to get the awards.
Then clients don't want to hire agencies that don't have proof of excellence, IE Cannes Awards. Agencies don't want to hire minorities that don't have Cannes Awards like their white counterparts. And the system is rigged from the start in a closed and very expensive loop.
You know, I wouldn't mind this Total Market thing if it meant anybody ethnic was getting their day in the sun at mainstream ad agencies.
Instead, all I'm seeing are black and brown brothers and sisters who've been in the industry getting laid off in droves. Ethnic agencies are getting their lunch eaten by holding companies that say they are now multicultural total market experts, and clients are eating that shit up.
Except none of it's true. It's just talk. Hiring a translator for a 1/2 day of work or a black AD to come into a meeting just to get the contract and the client can see a black face (but not a fulltime job) is leading to less people, not more.
All the teenage interns from the "inner city" outreach isn't translating into more faces of color at higher or, hell, even mid levels in major agencies.
It's frustrating and scary.
Post a Comment