Two days after stunning the ad industry by pledging that Publicis Groupe will sit out next year's Cannes International Festival of Creativity, President-CEO Arthur Sadoun spent Thursday trying to ease fears inside his holding company that the move would backfire.
In a closed-door meeting at the luxurious Majestic hotel, Sadoun assembled 200 of his top creative leaders and singled out what he described as a symbol of the agency world's woes: The Snapchat-branded ferris wheel that towers near the entrance of the nearby Palais.
"This is making me even angrier," he said as he showed a picture of the wheel to his troops, he recalled in an interview with Ad Age after the meeting. To him the carnival-like wheel -- and the fact that it rests on valuable festival real estate -- "symbolizes the fact that our companies, the holding companies, have lost their thought leadership in Cannes."
Sadoun's answer to the problem is to pause spending on the pricey event and other award shows for 365 days. The savings will fund development of an internal, AI-powered professional assistant program called Marcel. But the biggest criticism he has faced here is not about the ambitions tech tool, but the timing of the announcement. Why crash the Cannes party mid-week by pledging to sit it out next year, potentially robbing Publicis creatives the chance to win awards in 2018 that many view as career-defining achievements?
Sadoun said he was "very surprised" about the backlash "for the simple reason that I think what we are doing with launching Marcel is really a game changer in the industry." The tool is aimed at better connecting the holding company's 80,000 employees across 200 disciplines in 130 countries so they can identify project opportunities they want to work on in different markets and anticipate clients' needs with its predictive behaviors.
Marcel will "give a perspective to our young talent wherever they are because we all have too much focus on the U.S.," Sadoun said. "It's about the entire world and how the entire world can contribute. And Marcel is giving us that," he added. "It's giving access to our best people and it's a springboard to big ideas."
Those are ambitious goals for a tech program that is not even finished. And by announcing it at the world's biggest ad stage along the French Riviera, Sadoun has immediately put pressure on his holding company to get it done right. Not only that, but Publicis agencies are suddenly exposed to potentially losing creative talent to competing shops that will still enter Cannes awards next year.
'I am very concerned'
Asked if he was worried about competitors poaching his talent, Sadoun said, "Of course I'm concerned. I am very concerned." In attempt to keep everyone in the fold, he said he shared his mobile phone number with everyone in Thursday's meeting, telling them they could "call me directly."
As for why he decided to announce the move now, he said he wanted to do it in Cannes so that he could be transparent and discuss it with large numbers of his employees. "I could have sent a memo to my CFOs during the summer and said we are going to cut every award show by 80% … but I don't think [that's] fair." He added: "You don't think it would have been easier for me to do it from Paris … and not having to confront myself with all of these people?"
The decision has been the talk of Cannes. While knocking back rosé at beachside parties, attendees speculated about why Sadun would drop the news now. One theory is that he wanted to get the attention of Wall Street by showing that his holding company is serious about cutting costs as it faces rising competition from new players like consultancies.
"I wish pausing for one year on the festival would help me with Wall Street," Sadoun said, laughing. "I wish it would, but it won't."
Others have speculated about more pragmatic incentives. Perhaps Publicis wants to take a year off to renegotiate its lease on the space that it uses at the Majestic. Holding company officials also rejected that reasoning, saying that the company secures its hotel arrangement on a year-by-year basis. Officials also denied a notion that Publicis might phase out involvement in Cannes in an attempt to put more of a spotlight on its own Viva Tech event, which is held in Paris and aims to explore "transformational ideas on a global scale."
Instead, Sadoun cast the move in balance-sheet terms, suggesting that moving funds from Cannes to Marcel for one year won't damage more critical operations. "I am not going to take the money out of my people. I am not going to take the money out of what I do for my clients," he said. "We don't consider that we are pulling out [of Cannes]. We are just saying for one year we are going to focus on what matters, which is our transformation."
"For me, an award is a nice thing to do because it's a recognition … but this is not what matters. What matters is the work," he said.
He repeatedly came back to the Snapchat ferris wheel analogy, saying its placement "says a lot about our industry." When he strolls the Croisette, "what do I see at the front of the festival is Snapchat," he said, not an agency.
"Do we want to be on the front line, or do we want to be on the third line?" Sadoun said. "I want Publicis to be on the front line. And to do that I am transforming, and to transform I need to take bold decisions."