Ascential, parent company of the Cannes Lions Festival of Creativity and omnipresent consulting firm MediaLink, reported declines in total revenue produced by its marketing division—which includes both of those organizations—in today’s full year results for 2018.
Shares in the London-based company had declined by approximately 2 percent at the time this story was filed.
The drop was not unexpected, given the “major Cannes overhaul” that Ascential revealed in November 2017 after pressure from major agency holding companies that demanded a shorter, more streamlined and cost-effective event.
Publicis Groupe made headlines around the industry for announcing, at the very beginning of the 2017 festival, that it would forbid its agencies from submitting work to any awards shows for the following year so it could focus on developing the AI-powered internal platform Marcel. (Despite this very public declaration, P&G’s “It’s a Tide Ad” by Saatchi & Saatchi still “dominated” Cannes in 2018. Publicis also told Adweek that its jury placements did not conflict with that promise.)
“We’ve been clear that our marketing segment faced a more challenging 2018 in a tough market. However we are pleased to see that Cannes Lions’ reset and awards restructure went down well with customers, resulting in its highest ever NPS [net promoter] score,” said Ascential CEO Duncan Painter.
The company’s overall organic growth was up 6.3 percent year over year and 3.8 percent when adjusted for EBITDA. But marketing saw a $12 million decline in organic revenue growth, with Cannes down 8 percent and MediaLink down 9 percent from the previous year.
Part of this trend may be attributed to the fact that last year’s Cannes Lions attendance and submission rates declined by an estimated 20-25 percent, according to several sources who spoke to Adweek during last summer’s festival.
“Last year we made significant changes to the festival to ensure that we continue to provide the creative benchmark for the industry we serve,” Painter said. “We knew that those changes, such as streamlining the awards categories, could reduce revenue in the short term, and it is this that we see reflected in the results this year. However, we can also see in these results how an increase in recurring revenues at Cannes Lions—from our digital and consulting products and services—went some way to offset that in H2.”
“And, of course, we look forward to welcoming Publicis back to the festival this year,” he added.
Ascential’s full results, embedded below, also noted several other moves on the marketing side of the business, such as the acquisitions of industry intelligence group WARC and Amazon consulting firm Flywheel Digital, the introduction of Cannes digital archive The Work, and a “greater focus on brands” among MediaLink’s client roster.
When comparing 2017 Proforma EBITDA results to last year’s the report notes that many of these recent acquisitions “have had lower margins than Ascential’s average,” which may have played a role in determining these numbers.
The Ascential network’s largest source of revenue is sales, which includes Flywheel as well as ecommerce service Edge by Ascential and financial technology brand Money 20/20. Marketing ranks a close second.
“We are absolutely focused on getting the marketing segment back to growth this year,” said Painter. “We are pleased that MediaLink is making good progress towards refocusing on its brand customers. As well as solid delivery of core products and services, new initiatives such as CLX—the new summit run by Cannes Lions and MediaLink, designed around immersive and interactive experiences with some of the world’s most exciting media and entertainment creators—are key to making that happen.”
A MediaLink spokesperson referred to Ascential for comment.
The full 2018 results are embedded below.