The Cannes Lions ad festival was postponed over the coronavirus, but advertisers may sit it out anyway, and millions of dollars are at stake
- Advertising's biggest and most expensive event, the Cannes Lions Festival of Creativity, was postponed to October from June in response to the coronavirus outbreak.
- Each of five biggest ad holding companies spends upward of $20 million on Cannes every year, but multiple sources told Business Insider they are leaning toward sitting 2020 out due to health and reputational concerns.
- These people say agencies and Cannes parent company Ascential have been in talks that included the possibility of Cannes refunding fees.
- Cannes Chairman Philip Thomas said Ascential is talking to all its customers and wants to present the awards show in some form this year.
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The Cannes Lions Festival of Creativity, advertising's most prestigious five-day awards show and conference, was postponed to October from June, the latest gathering to be scrapped or rescheduled in response to the spread of the coronavirus pandemic.
But according to six people with direct knowledge of the matter, some of the largest ad agency holding companies told Cannes' parent company, Ascential plc, they planned to sit out the event, some citing health and reputational concerns, and that the awards should only happen virtually.
These agencies, their clients, and tech companies like Facebook and Google spend tens of millions of dollars in Cannes every year on travel, lodging, award entry fees, and events that run around the official festival.
Some people who spoke to Business Insider said they broached the topic of potential refunds with Ascential but there were no concrete proposals.
"We are in contact with all major customers more or less every day as things unfold," said Philip Thomas, president of Ascential's events division and chairman of the Cannes Lions. He said the company is listening to their points of view and assisting them with planning.
Spokespeople for five big holding companies - WPP, Omnicom, Publicis Groupe, Dentsu, and IPG - either would not comment or did not respond to related requests, as did smaller competitors Havas and MDC Partners.
Advertisers don't want to be seen partying on the French Riviera in a scary economic climate
The sources, all of whom are known to Business Insider but requested anonymity to speak candidly, said the conversations, which involve all the major holding companies as well as top advertisers, remain in their early stages.
The sources said at least three of the holding companies voiced frustration with what they perceived as Ascential's reluctance to consider cancelling this year's festival and reschedule it for 2021.
One senior-level holding company executive said that, in addition to health concerns, agencies and advertisers won't want to be seen in the French Riviera after the belt-tightening that analysts foresee in the months ahead. Several agencies have already laid off staff as a direct result of budget cuts stemming from the coronavirus.
The reputational risk may be especially steep for any executives in industries, such as travel and hospitality, that are in line to receive multi-billion-dollar grants from the US government as part of a coronavirus stimulus expected to pass Congress in the coming days.
The five biggest ad holding companies each spend $20 million or more on Cannes every year
Cannes is a big expense for marketers. Altogether, the five biggest ad holding companies each usually spend well over $20 million on Cannes every year.
The first executive told Business Insider that 90% of his company's annual travel budget goes to Cannes.
Another holding company executive said her company sends about 1,000 employees and spends between $4,000 and $5,000 for each individual five-day pass.
These companies also own dozens of agencies, the largest of which can spend $1 million to $2 million on fees and production costs for the video case studies that every award entry requires.
Some agencies have already put money down on hotel reservations, events, and awards submissions for Cannes. Sources said the holding companies have already begun seeking refunds from other vendors.
The first executive said judges should give the awards virtually, as other ad industry awards, such as The One Show and Creative Week, have recently planned.
One reason the recently-cancelled SXSW offered deferred payments instead of full refunds for festival passes was because its insurance plan did not cover disease-related cancellations. Business Insider was unable to determine the specifics of Ascential's financial constraints.
Ascential still wants Cannes to happen in some form this year
Thomas confirmed that Cannes recently extended by one month its submission dates and eligibility deadlines, or the dates by which ad campaigns must have originally run in order to qualify for various awards.
He said Ascential wants to find a way to present the Cannes Lions in some form this year, saying, "The world needs creative inspiration now more than ever."
The only certainty at this time is that the event, like so many others, will be dramatically changed by COVID-19.
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