It's that part of the year when Martin Sorrell, chief executive officer, WPP Worldwide does not field questions from journalists, but throws questions instead. His great debate at Cannes was with global marketing directors from four major brands -- McDonald's, P&G, Kraft Foods and Johnson & Johnson.
Marc Pritchard, global marketing officer, P&G and Mary Dillon, executive vice-president, global chief marketing officer, McDonald's Corporation have something in common. Neither have MBA degrees, and Sorrell addressed them as the "intelligent species".
& #BANNER1 & #Pritchard has been a lifer with his company, having spent 27 years there; while Dillon has recently joined the McDonald's family. Prior to this, she was with PepsiCo, handling Quaker Oats.
The other panellist was Mary Beth West, executive vice-president and chief marketing officer -- Kraft Foods Inc. She is an MBA from Columbia Business School.
McDonald's is among the few companies to have incremental spends in 2009. Dillon replied, "We are in a fortunate position. Our daily business is growing. We are excited, but not complacent. However, we are using the recession as an occasion to review our spends, and see whether we are getting value for every penny that we spend."
Pritchard of P&G also expressed a similar view. "Recession has pressed the reset button. Even we looked at how we can get the optimum value from our spends."
However, the importance of value was not restricted only to the rate negotiation; it was even extended to the message to consumers. "We gave a message to consumers about how our products were of value to them. We tried to add value even to the creativity and the message," Pritchard explained.
P&G's first objective is to make this message work in stores and then move backward.
Sorrell then stated that we spend 20 per cent of our time on the Internet. He questioned whether the spends on digital media should go up to 20 per cent of the total budget. Currently, the global average of digital spends is 13 per cent of the total budget.
Dillon did not seem to agree with this correlation. She revealed that 7 per cent of McDonald's' global marketing budget is allotted to digital. She said, "The share might be small, but it is significant."
For Kraft Foods and J&J, the share of digital spends is in double digits; while for P&G, it varies in different markets.
West of Kraft Foods said that her company has used the recession as an opportunity. The company is doing more business now, as people have cut down on going out. To use this opportunity to its advantage, Kraft Foods has provided consumers with recipes from restaurants in respective markets. Not only this, the company also advised consumers on how to get the restaurant experience in their own homes, so that the consumer doesn't feel bad about not being able to dine out.
J&J's Perkins was of the opinion that in times of recession, there are enough people available who can advise on how to cut costs, but his company was not interested in these people. Rather, J&J looked for "evangelists who could advise us on how things can be improved, without just cutting budgets".
Sorrell then asked Perkins on what he thought was more important -- the marketing function or procurement and finance. Perkins replied that the marketing function continues to be important, but there has to be a balance between the two.
Sorrell's next attempt was to start a debate on the importance of large global network agencies versus the small, independent agencies.
Perkins replied that the small agencies could handle the prescription product, but larger agencies were needed to get the scale. He also insisted that his company was comfortable working with an agency like Mother.
West of Kraft Foods said that she did not believe in size. However, she admitted that she had a bias towards the good versus the bad. She added, "If you have a build relationship with the agency, you come up with great ideas."
Dillon of McDonald's stated that for her brand, scale was very important, and so, it was important to work with the global network agencies. According to her, small agencies can be used for packaging design.
P&G, on the other hand, has different plans. The company is in the process of making some structural changes and is on the lookout for a brand agency, so that it can brief a single agency and get an integrated creative output.
The discussion then shifted to the emerging markets, such as India, China and Latin America, which, together, have more entries at Cannes this year than the rest of the world has.
Sorrell pointed out that P&G has 3.5 billion consumers and is expected to add another 1 billion from India and China. "How do you increase the reach in these markets?" he asked.
"Digital is the way," said Pritchard of P&G. Highlighting the potential in these markets, Pritchard said that with 450 million subscribers, China is ahead of the US, in terms of the number of digital connections. Even India has around 250 million digital subscribers, and the number is expected to touch the 500 million mark soon.
However, he also pointed out that village distribution was significant to a company such as P&G. "We believe that the village distributor is the face of the brand in that area."
The next issue to be debated was whether creative and media agencies should be merged and what is each one's significance.
Pritchard of P&G said that the most important part was consumer insight, because that gives birth to great creativity.
To this, West of Kraft Foods commented that all that matters is the idea, and not where it comes from. At times, the media agencies are more creative and provide the right solution in today's world.
This took the debate to what was more important -- the media or the idea.
J&J's Perkins was of the opinion that the media was important, and so was television. "The mass reach of television is phenomenal; otherwise, we wouldn't spend like crazy on it," he said.
P&G's stand on this subject was that television is important, but it's not the only medium.
West of Kraft Foods said, "The challenge is to find innovations within the television medium itself."
Dillon of McDonald's had a very interesting observation. "All the consumers want is a moving picture and if digital can deliver that, why not?"
The session ended with the question, "What drives you nuts about the agency?" though Sorrell was quick to clarify, "not about the WPP agencies, but others".
West of Kraft Foods said, "We try to build a relationship with the consumers, but unfortunately, there is no relationship between the client and its agency. People only refer to it as our current ad agency and past agency."
Perkins of J&J stated that the client gets the advertising it deserves. "I haven't met a creative, who doesn't like straight feedback on the work," he said.
Both West's and Perkins' comments were applauded by the audience.
P&G's Pritchard began with, "The pressure on me is to get the applause."
The crowd reacted immediately and applauded him right then.
He continued, "It's not the agencies silos, but our silos. I think, instead of talking internally, we need to talk more with the consumers, so that we can get the great creative idea."
The crowd applauded again.
McDonald's Dillon said that the clients need to write better creative briefs. The audience obliged her with another round of applause. Had to be -- it was full of agency people.