CANNES LIONES 2025

“I have good news and bad news. The good news is that AI will not kill advertising. The bad news is that AI won’t save it either – we have to do that ourselves, believing in what has always set it apart: human creativity.” These words, spoken by Tor Myhren from Apple at the opening of his speech, set the tone for what happened over the next few days at the Cannes Lions Festival.

In recent years, big tech companies have ‘taken over’ the beaches during the festival, as they are among the few that can afford such expensive spaces. This year, they almost dominated the festival, setting its rhythm and narrative tone.

The scale of money and ambition is evidenced by the fact that TikTok took over the Carlton Hotel’s patio. And its position, changing from a platform that attracts the creative industry to one that advises it on how not to starve to death: “Join our fireside chat, where we’ll share insights on how to thrive in the new era of modern marketing. By the end, you’ll walk away with ideas on how creative agencies can deliver greater impact for brands while securing their future,” reads the description of one of the panels.

AI: the end of the hype, the beginning of the reckoning

Marketing agencies such as Omnicom, Publicis Groupe and WPP are incorporating AI into their offerings and leveraging partnerships with Adobe, Amazon, Google and NVIDIA. However, for the most part, they are not being paid to create value – maximising productivity and the speed of insight delivery, increasing production speed and media campaign efficiency. They are working hard and are increasingly exhausted. Perhaps this is why the 4As industry association and consulting firm Forrester discovered the following practice: although 75% of agencies in the US use AI — up from 61% last year — 75% of them also fund it directly, without passing the costs on to their clients. In 2024, this figure was 41%. Jay Pattisall, principal analyst at Forrester, wrote in a report that agencies are reverting to outdated commercial models that will lead to a lack of transparency in marketing services and, as a result, lower prices for (seemingly or not) similar and common services.

It’s a total paradox — the more marketing agencies become proficient in so-called creative intelligence, the less willing they are to reap the financial benefits.

Given that 75% of marketing agencies incur the costs of AI investment and maintenance without exploiting the monetisation opportunities, it’s not hard to imagine what will happen. Already, Forrester analysts point out in their report that the current service- and ‘hourly’ commercial model ‘threatens the long-term stability of growth for both agencies and brands.’ The FTE (full-time equivalent) model should be replaced by a completely new way of billing for value delivered.

IPG reported a 4% decline in revenue in the US. S4 Capital reported a double-digit decline in net revenue for fiscal year 2024. Advantage Solutions reported an 8.5% decline in revenue in 2024. And the recently renamed WPP Media informed its US employees that up to 45% will be affected by its restructuring and lowered its global advertising spending growth forecast for 2025 from 7.7% to 6%, citing ‘disruptions in global trade and ongoing deglobalisation’.

The ball is over

On the eve of the festival’s opening, Business Insider wrote: ‘Advertising executives who descend on the French Riviera will raise glasses of rosé to mark the twilight of Madison Avenue’s glory days.’

Tom Denford from ID Comms said that this year’s Cannes Lions will be ‘like a requiem’ for the traditional agency business. Even the departures of David Droga from Accenture Song and Mark Read from his position as CEO of WPP – both industry legends – and the merger of Omnicom and IPG did not cause such a stir. And yet, the completion of this giant merger will create the world’s largest advertising agency in terms of revenue, displacing the recently consolidated Publicis Group, which only recently surpassed WPP. As we can see, there is only one scenario and everyone is following a similar path, which for rank-and-file employees in such processes means one thing: redundancies.

So, some of the panels and power speeches called on brands to use sensitivity, imagination and creative art, paying tribute to the values that built the foundations of the industry, while others paid homage to the new gods – conversations on the Croisette and at the Carlton Cannes focused on the power of AI-based technology and automation.

Gary Vaynerchuk of VaynerMedia took a direct shot at agencies, which he said are hiding behind talk of ‘the power of good’ as a cover for not taking responsibility for business results: “Don’t give me that crap about giving back because you’re afraid of technology. It’s time for marketing to be what it should be: a driver of business growth. Everyone, including me, will be disrupted by AI. Either we learn to deal with it, or we go bankrupt.”

CMOs fight for relevance and a seat on the board

According to Spencer Stuart, an executive search firm, the number of marketing directors at Fortune 500 companies fell from 71 per cent in 2023 to 66 per cent in 2024. So, no improvement here either.

A new McKinsey report, created for Cannes Lions, indicates that CEOs are striving for growth but do not necessarily understand how marketing can help. According to Gartner, marketing budgets fell to 7.7% of revenue last year, compared to 9.1% the previous year.

Don’t fall in love with the plumbing

Against the backdrop of such depressing data, it is worth paying close attention to the opposite processes. Here, Nestlé’s new (and, as the first of its kind, formative) Global Chief Marketing and Digital Officer, Aude Gandon, stands out. Since taking on this role, the Frenchwoman has embarked on a ‘total transformation’. Within four months, she developed a five-year plan of measurable goals, ranging from 25% online sales to increasing investment in digital marketing to 70% and collecting 400 million pieces of consumer data with their consent by 2025. With over 2,000 brands in 188 countries, this vision was key to generating enthusiasm across the board. ‘The goals have to be big enough to motivate and simple enough to get the message across very quickly. So there’s a bit of calculation, and then there’s a bit of intuition, a bit of ambition,’ explains Gandon.

In 2020, only 40% of Nestlé’s marketing budget was allocated to digital solutions. Today, it is 68% – but, as he emphasises, the content must be tailored to the specific nature of each platform. “I don’t want it to look like, “Oh, here comes an ad”. For me, there’s nothing worse than that. And it doesn’t work on social media, it just doesn’t work. Advertising agencies trying to imitate influencers will always look like imitations – and when you try to be someone else, people see it,‘ so her spending on online influencers is ’growing extremely fast.”

When it comes to digital media spending, Gandon does not plan to exceed her 70% target for digital media. “I definitely believe in keeping a third in traditional media.” Are big campaigns in traditional media important for sales or brand status? “Both. Obviously, in the digital world, you have fewer of those stories. But I think we need to balance that.”

‘Don’t fall too much in love with the plumbing’ is Aude Gandon’s motto. Technology is the foundation of marketing, not the end product. Success lies in combining existing marketing expertise – which has never changed – and enhancing it with tools.

Last year, Nestlé’s global CMO and CDO set her team the goal of winning the Cannes Lions Marketer of the Year award in 2030. Employees were stunned, as Cannes Lions had never been an ambition for the company. Meanwhile, the first successes are already visible – the Grand Prix for the KitKat ‘Break Better’ campaign.

Aude Gandon: “Marketers were fascinated by data, techniques and technological tools. However, the strength of brands comes from differentiation, which is not simply the right product, but the right creative iteration of that product and brand. The fundamentals of marketing haven’t changed, but brands today need to connect with consumers across multiple platforms with different usage patterns. We all strive for market share and growth – and we can only achieve these goals through creativity and storytelling. If you’re a really good creative, you want to work at a large international agency, not a corporation.”

And what about PR?

The USC Annenberg’s 2025 Global Communication ‘Mind the Gap’ report, developed in collaboration with the Zeno Group and IABC, surveyed communications professionals and found that, overall, we believe that people will remain central to the PR function.

However, the intensity of this belief varies depending on age. Among Boomers and Gen X, it is 8/10, while Gen Z are fifty-fifty on this (among Millennials, it is not much better, only 60%).

At the same time, 68% of PR agency heads strongly agree that people will remain essential for effective PR. This result is 14% higher than among in-house clients. According to PRovoke, this difference probably reflects the current business model of agencies, which is largely based on billing hours (the FTE model is also our model).

When asked in which areas they currently use AI, the most common responses were social media (43%), research and analytics (36%) and press release preparation (36%). AI is used much less frequently in areas such as investor relations (7%) and public affairs (11%).

Conditional optimism

Cannes Lions 2025 ended as predicted: more AI, less certainty about who will profit from it. Algorithms effectively streamline processes, speed up production, reduce costs, destabilise business models and, quite incidentally, shorten the careers of entire marketing departments. But don’t worry. As the English say: it could be worse.