The Cannes Debate: What Does The Recession Mean To Us?

It had to be.  A group of very senior CMOs from very big brands moderated by Sir Martin Sorrell on how brands are coping in the current economic downturn.  Joining the panel were Mary Dillon of McDonald's, Marc Pritchard of P&G, Brian Perkins of J&J, and Mary Beth West of Kraft.  Another sell-out session as agency types listened to what influential client types had to say.

Key topics included the use of digital versus traditional media, especially TV; creativity; and client-agency partnership and "pain points".

While mass media like TV is still playing an important role, everyone reported increases in digital, but percentages varied between geographies.  Mary Dillon said McDonald's spends roughly 7% of its global marketing budget on digital, whereas J&J, P&G and Kraft all reported double-digit percentages.  Still, McDonald's is one of the few brands growing market share in the current environment, but they are rethinking the marketing mix constantly. 

Marc Pritchard reported P&G's advertising budget down by 4%, but he encouragingly said that the recession had provided the opportunity to "step back and hit the re-set button".  He was the only CMO on the panel to mention the widest possible range of marketing disciplines, including PR which he mentioned twice.  I was counting.  He also mentioned the Ariel coldwater campaign on which H&K was a key partner in the UK.

Marc also talked about the BAL (Brand Agency Leadership) structure that P&G is adopting as a way to better integrate ideas on brand building.  P&G brands accounting for 50% of sales have moved to BFLs (Brand Franchise Leaders) internally, and one-third of the business have adopted BALs.  In fact, all of the CMOs talked of the struggle to truly integrate creativity.  Brian Perkins of J&J talked about investing in communications planning, and transferring great ideas in the best possible way through evangelists - looking for the sum to be greater than the individual parts.

Are smaller agencies better equipped to come up with the big ideas?  Not necessarily, according to Mary Beth West of Kraft, but a productive nimbleness seems to be emerging, and at the end of the day, it all comes down to the people who can solve the problems.  Mary Dillon of McDonald's believes that sometimes size matters.  McDonald's has some great global ad agencies, but it also is a highly decentralised company so they also partner with smaller firms.

One common expectation is that creativity should be borne from insights, and Mary Beth West of Kraft went further to say that the thinking should go beyond insights to the interpretation of the insights.  Mary Beth went on to say that she's seeing media agencies as more of the problem solvers in this new world.  Worrying, she also said that in her view, clients are in front of the agencies, and consumers are way in front of both.

Now there's an argument for Full Participation Marketing if there ever was one!

Search also came up as a solution, but it's not at the top of the list for either Kraft or J&J.

And a panel of marketers just wouldn't be right without getting into the area of sustainability.  Mary Dillon felt that without question, the consumer is expecting sustainability from their brands.  And in the case of this panel, every brand is already very active on this front.  Kraft just announced a $90 million partnership with the Gates Foundation.

Martin's parting question was a crunchy one:  What things drive you nuts about your agencies?  There was a bit of squirming by all, but Mary Beth summed it up best by saying that it all comes down to relationships, and then she went on to add that she's had the best conversations with new agencies here in Cannes than she's had with her current agencies in the past 6 months.  Ouch!  And a good reason to come to Cannes?