CANNES — What is the sound of $25 billion changing hands? It’s enough to prompt a sharp in-take of breath from ad agency execs. That is the amount at stake after many of the world’s biggest brands recently began reviewing their long-held agency relations.
Why are the brands putting agencies on notice? Because times are a-changin’, say industry execs speaking on a Cannes Lions panel.
Bank of America’s global media investment SVP Lou Paskalis:
“The biggest (driver) is pricing We’re seeing exponential growth in data crunching and the needs to support that, which are no longer 25-year-old planners who sleep six to an apartment and happy with entry-level income… You need to make bespoke content for that platform. You’ve got exponential increases in content costs. All of this is saying you’ve got to change the pricing model.”
VivaKi global CEO Stephan Beringer:
“The world, from a marketeer’s standpoint, has become extremely complex. I’ve experienced clients that, not in a mean way, have said to me, ‘We are investing gazillions in to this digital thing … the only ones making money with it are the agencies’. We need to think about how to organise ourselves … so that the extraction (for clients) remains high.
The panel was hosted by Rubicon Project marketplace development SVP Jay Sears.
This segment from the Cannes Lions Festival was part of a series on programmatic advertising presented by Rubicon Project. Please visit this page for more videos from the series.