Images Courtesy of Cannes Lions
Cannes Lions, while rooted in the celebrations of creativity and awarding the work, is also a place for future thinkers and doers. Revenue, commerce, income, and ROI are, well, not really at the fore; leading one to believe creativity and commerce are odd bedfellows, adjacent and symbiotic rather than intertwined and co-dependent.
While commerce was not glaringly at the forefront of Cannes Lions, I found it hiding in the shadows—a fascinating twist providing insights into large retailers’ survival and creativity. Before we get into it, here are my four observations as a star-struck outsider and a first-timer on assignment at Cannes Lions.
Four Cannes Lions Observations:
- Sky-High Profile Presenters: Ryan Reynolds, Megan Thee Stallion, Cam Jordan, Elizabeth Olsen, Garry, Kasparov, just to name a few.
- Metaverse and Web 3.0: The DOMINANT event topic included presenters Paris (as in Hilton), Gary (as in Vee), Marc Mathieu (Co-Founder, Web3 Studio at Salesforce), Coinbase CMO, Reddit CMO, WGSN, and many more.
- Booming Big Tech: Google, Meta, Amazon, Twitter, and Pinterest had gargantuan glamorous beachfront “cabanas” to host huge presentations, drink rosé, network, and more. What Nasdaq melt-down?
- Mega-sized Missions for Good:
- A video presentation from Ukraine’s President Zelensky urging the creative community to help it defeat Russia – stating “The Power of Creativity is Greater than a Nuclear State Stuck in the Past”.
- Malala Yousafzai was presented with the 2022 Cannes LionHeart, an award given to someone who’s harnessed their position to make a significant and positive impact on the planet.
- Sustainable Development Goals Lions Grand Prix for Good Award: Cannes Lions has partnered with the United Nations for the Sustainable Development Goals Lions. This agenda aims to transform our world by 2030 with a plan to end poverty, protect the planet, and ensure prosperity for all. By driving awareness for the UN’s SDGs and inspiring the global creative industry to accelerate progress, this collaboration is a powerful force for good.
- Unstereotype Alliance: Cannes Lions is a founding member of the Unstereotype Alliance, the industry-led initiative convened by UN Women. The initiative brings together leaders from across the business, technology, and creative industries to address the portrayal and endurance of harmful stereotypes in advertising and content.
Adjacent events included performances by Dua Lipa, Post Malone, Black Crowes, and others I can’t list as I was already tucked in bed. In summary, the environment felt debaucherously delirious of inflation, the recession, and a miserable stock market. In fact, during Cannes Lions, stocks roared back—a rarity in 2022. Ah, the power of Cannes Lions – spreading the bubbly worldwide. More, please.
Commerce, The Underbelly of Cannes Lions:
Storytellers, advertisers, and brands need people to watch them work, so they dispatch media teams to seek the coveted eyeballs. As it turns out, retailers have the eyeballs they seek and have, thus, strategically earned a seat at the table of the advertising ecosystem as card-holding participants. This adds to the growing revenue options retailers have as they continue to pursue diversified revenue options. Diversification away from the singular pursuit of sales as their only source of income is becoming more familiar. We have seen diversification in several forms of growth, and more frequently, survival. The diversity includes moves such as:
- Breaking off e-commerce divisions
- Using real estate assets
- Getting paid for their customer traffic*
*A-ha, the commerce element at Cannes Lions we sought to find was hiding in plain sight.
Enter Retail Media Networks. Put simply, retailers get paid for their customer traffic where eyeballs and PDP time are the currency. What I saw lurking underneath the glitz was put precisely by Drew Thachuk, Director of Business Development at Broadsign: “Retailers, CPG brands, and media buying agencies are now more tightly interconnected because of the shared experiences they’ve navigated and the rise of retail media networks.”
I spotted that interconnectedness firsthand at Cannes Lions. Thachuk furthered this by stating: “shifting consumer behavior, mounting privacy regulation, and the demise of the cookie are just a handful of challenges that retailers, CPG brands, and media buying agencies have tackled in the last two years. Yet, these challenges have prompted an era of reinvention that continues to breed new opportunities.”
What is a Retail Media Network (RNM)
A retail media network is essentially an advertising business set up by a retailer that allows advertisers to buy advertising space across the retailer’s online properties and throughout the open internet, using shopper data to connect with consumers across the entire buyer journey.
“Marketers have long sought to connect their marketing investments to consumers’ online and offline behaviors, and retail data is bringing them a step closer to achieving what is largely considered the holy grail of marketing. Retailers are constantly looking to find new channels of growth, and the savviest retailers realize their valuable shopper data gives them a new revenue opportunity with brand marketing budgets.” Brenda Tuohig, SVP The Trade Desk.
According to emarketer:
While Amazon still dominates with 77.7% of US digital retail media spend, companies like Walmart and Instacart are emerging as media networks to watch.
- We forecast Walmart’s US digital advertising revenues will hit $1.55 billion this year, a 53.5% increase for the year. For Q3, the company reported that its ad business had increased revenue by 240% over two years. While the retailer declined to share specific numbers, the CFO at the time, Brett Biggs, noted that “increased contributions from advertising revenue have helped offset cost pressures” from inflation and supply chain issues.
- Instacart had $300 million in revenue from advertising last year and hopes to reach $1 billion by next year, per the Wall Street Journal.
- A study by Merkle found that 77% of CPG brands work with Amazon, while 56% work with Walmart Connect, 29% with eBay, and 27% with Home Depot.
- In 2021, a quarter of retailers reported receiving more than $100 million in revenue from their media networks, according to Forrester.
- By 2023, we predict that retail media will exceed $50 billion and receive nearly 20% of all digital ad spending.
Marketing Dive adds that advertisers will increase [RMN} allocations by another 27.8% this year. One in eight digital ad dollars will go to advertising on e-commerce properties.
According to Jason Goldberg, TRI2022 Rethink Retail Top 100 Influencer and Chief Commerce Strategy Officer at Publicis, Amazon is the third-largest digital advertising platform in North America, behind Google and Facebook.
Retailers selling advertisements (Retail Media Networks) is one of the fastest-growing trends in all of retail. Retailers have been eager to augment … sales with high-margin services like advertising.
While Amazon is the clear leader. Other retailers have realized the value of their ecosystem and created entire divisions and companies. According to emarketer, “Now that RMNs have become profit centers, retailers are investing more to grow these networks.”
A few examples are:
- Roundel (Target’s Media company): Our solutions help you find your perfect audience. Then connect your brands to our guests on and off our platforms—across display ads, social media, search ads, audio, and even TV
- MMN / Macy’s Media Network” Tap into our network and start growing your customer base through targeting strategies fueled by unparalleled cross-category strategies.
- Retail Media+ Home Depot: “Advertising with The Home Depot means reaching our 45 million customer households online…. Our website attracts 2.2 billion visits each year.
- Nordstrom: Nordstrom Media Network (NMN) is an advertising program enabling brands to share their stories with Nordstrom and Nordstrom Rack customers via on- and off-site media campaigns. It’s a natural next step in our Closer to You strategy, conveniently connecting our customers with personalized recommendations and experiences.
If you’ve come this far but are still in the mindset to brush off RNMs as only for Amazon and CPGs – don’t take it from me.
McKinsey’s Report published on June 7, 2022, lays it out: Busted: Five Myths About Retail Media. Here is a partial list.
- RMN is not just for CPG: Sellers of jewelry and luxury goods, consumer electronics, and beauty products, for example, report similar planned growth in RMN spend. Overall, 80 percent of advertisers surveyed across verticals plan to increase RMN spending in the next 12 months, and approximately 20 percent plan to increase it by more than 10 percent.
- RMN spending from dollars retailers already earn. False. 80% of spending is incremental, high-margin revenue.
- RMN is an “Amazon-only” story: Wrong. 80% of advertisers currently use at least one RMN in addition to Amazon.
Like many professional gatherings, Cannes Lions consists of headliners, peacocks, and front liners rolling out to discuss their topics and accept awards. Add being up to our eyeballs in Kings and Queens of Metaverse, digital avatars, and web 3.0, (by the way, Paris Hilton actually refers to herself as the ‘Queen of the Metaverse”); my biggest aha moment was when I found the commerce underbelly.
The ecosystem includes agencies as well as creative and media teams, interconnected in storytelling, brand awareness, brand growth, and business.
The McKinsey Report states: Marketing budgets are flowing toward retail media networks (RMNs) as retailers……capitalize on the shift to e-commerce while offering advertisers unique audiences and valuable data insights to build new high-margin businesses. Manufacturers and brands are increasing their ad spend on RMNs because they offer unique, valuable audiences and provide data that measure ad effectiveness, thus helping to close the loop between ad view and product purchase.
According to Trevor Sumner, CEO of Perch and TRI2022 Rethink Retail Top 100 Influencer:
“In our post-cookie future, those who own high-intent audience and customer data are kings. Retail media networks provide a new monetization opportunity to realize and quantify the value of the audiences retailers generate in-store and online. RMNs unlock substantive advertising budgets to compete with Google, Facebook, and Amazon, which are squeezing all the margins out of customer acquisition.”
In the end, as everyone boarded planes back, most were jolted out of the glamourous haze with flight delays and lost luggage, but retailers can have a little pep in their step as they grow this opportunity into a major contributor to the bottom line. Brands want eyeballs. Retailers want revenue. Sounds like a good match to me – pop the Rosé.