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Plus new attendees, two ways to look at live video and a Snapchat-branded Ferris wheel.

The biggest spenders and personalities from the advertising and media worlds descended on the French Riviera this past week for Cannes Lions, an extravagant week-long party full of elaborate dinners, exclusive concerts and a limitless supply of rosé.

Tech companies like Facebook, YouTube and Twitter rented out sprawling beachside cabanas for the week to host meetings and schmooze with business partners.

Others, like Spotify and Verizon’s newly formed AOL-Yahoo tie-up, Oath, threw big parties with expensive musical performances. (In Oath’s case it was Fleetwood Mac front-woman Stevie Nicks; Spotify had Solange Knowles, sister of Beyonce.) Medialink and iHeartMedia threw their very exclusive dinner party again this year where R&B star The Weeknd performed for celebrities like Ryan Seacrest and CEOs like Twitter’s Jack Dorsey.

But despite all the distractions — and there were plenty — Cannes is also a place where actual deals get done. Many ad buyers and ad sellers use the week to plan out spending for the second half of the year, and who shows up and who makes a scene can give you a good idea of the current pecking order for the industry.

Recode attended, too. Here’s a glimpse from our notebook at some of the biggest themes of the week.

Who’s No. 3?

The big, 60,000-foot takeaway from dozens of conversations this week is something that we’ve all known for a while: Facebook and Google are absolutely dominating the digital ad market, and buyers are eager for a third player to offer some competition.

What was different this year from years past is that folks no longer believe that the third player, if one ever emerges, will be another platform, like a Twitter or Snapchat. Instead, it feels like No. 3 might be a content provider, a company like Verizon-owned Oath or Comcast-owned NBCUniversal*, that has more control over the content they distribute.

There are a couple of reasons why this matters. One is that advertisers claim they don’t get enough data from Facebook and Google about who, specifically, they’re reaching with their ads.

The hope is a third player might share more of that info. But the other important reason is “ad adjacency,” which is ad industry speak for making sure your ads don’t appear next to something offensive, like an ISIS video.

Google and Facebook are platforms that carry content created by other people. A media company would theoretically have more control over said content, and thus ensure the ads are shown in the appropriate context. Still, no one expects that a third player will emerge quickly. That means we’ll probably be having similar discussions with ad buyers next year.

Kurt Wagner / Recode

Could Facebook’s Live video problem become an advertising problem?

Speaking of adjacency … People are using Facebook Live for all kinds of horrible things, including suicides and beatings. And while the company is just starting to roll out ads within Facebook Live videos (and only from videos produced by hand-selected partners), two ad buyers we spoke with said their clients are already starting to question whether or not they’d want want to buy a Facebook Live video ad and be associated with the product at all.

The ads are so new that this is not yet a significant problem, but it’s also not a great sign for Facebook, which is finally making its big push into mid-roll video ads.

Twitter, meanwhile, is selling “live”

Virtually everyone in Twitter’s upper ranks was at Cannes this year. CEO Jack Dorsey spoke on a panel mid-week and, surprisingly, wasn’t asked much of anything about Twitter’s business. But we chatted with VP of Global Revenue Matt Derella at the company’s fancy beach cabana and he explained that Twitter is trying to sell video ads to accompany the live video content it’s been gathering for the past year. (Twitter spent time at Cannes selling ads for its NFL streaming package last year, but it doesn’t have those same streams this year.)

Derella says selling video ads for its live video streams is similar in process to selling traditional TV ads, but Twitter’s video ads are different in that they’re more targeted than TV ads, and mostly built for mobile devices.

“I don’t think it’s going to be as simple as TV 2.0,” he explained. “Some of the biggest CPG marketers in the world are taking their 15 and 30 [second ads], and we’re working with them and actually re-cutting them for Twitter.”

Twitter’s beach cabana at Cannes Lions in France - 2017. Kurt Wagner / Recode

Jeffrey Katzenberg has an idea for “New TV”

DreamWorks co-founder Jeffrey Katzenberg was in town to pitch advertisers on his idea for what he’s calling “New TV.” The idea is to turn what has traditionally been a multi-hour program — a three-hour movie, for instance — into multiple shorter episodes and deliver that to people on mobile devices. He described it like cutting a book into short chapters.

But Katzenberg, who spoke with us from a suite on the top floor of the Carlton Hotel overlooking the marina, said he doesn’t want to create the kind of quick-to-produce internet videos that might do well for sites like NowThis or BuzzFeed’s Tasty unit. He wants to spend millions and produce videos that compare in quality to what you might see in the movie theatre.

The problem? The existing platforms that would be logical fits to distribute something like this — Facebook or YouTube — don’t offer an advertising model that can support that kind of production budget, Katzenberg says. That means he might try and build a platform himself, or work with an existing player to build something together.

“I don’t know. I’m in that process right now,” he said. “Over the last eight weeks I have met with what I believe are all of the potential enterprises that this might be a good fit for.”

Snapchat may not be doomed after all

Snapchat, whose presence in Cannes included an exclusive meeting compound surrounded by bushes and body guards (again) plus a giant yellow Ferris wheel, missed its Q1 revenue estimates this year, but ad buyers we spoke to in Cannes aren’t as concerned about the company’s business prospects as investors are.

Each of the five ad buyers we spoke with said their clients are eager to spend money on Snapchat, and one said he recommends Snapchat in every media package he sends to his clients.

So if everyone wants to give Snap money, why isn’t the company’s business bigger? These buyers claim that it’s a combination of things. Snap is still building its ad technology, like automated ad-buying software and better measurement tools. And it also takes bigger advertisers a long time to adopt anything new — and Snapchat’s business, which is just three years old, is still very new.

Kurt Wagner / Recode

New arrivals

Reddit sent its sales team to Cannes for the first time this year alongside founder Alexis Ohanian. Pinterest has been at Cannes the past four years, but this was by far the company’s biggest presence. It rented a fancy beach pier, and executives told us that they are pushing their new search advertising units in conversations with marketers. (For more on that, and the rest of Pinterest’s business, you can read our profile of Pinterest’s President Tim Kendall here.)

Facebook Messenger was also in Cannes selling ads for the first time. It’s also showing advertisers its new inbox ads that it started testing back in January.

“We are selling mostly News Feed ads that push people to Messenger but we [are] also starting to educate … and teach people about those [inbox] ads coming inside Messenger as well,” explained Messenger’s product boss Stan Chudnovsky over breakfast on Facebook’s beach pier.

The New York Times is not opposing Donald Trump

The Times’s Deputy Publisher, AG Sulzberger, defended the paper’s reporting on President Trump during a panel at a beachside cabana hosted by media giant OMD this week.

Sulzberger, who will eventually take over as publisher, said that while the Times’ coverage isn’t flattering of Trump, the paper is not trying to actively oppose him either. Eventually, opposition groups come into power, Sulzberger explained, and he doesn’t want the paper to be fighting for any particular side. “The New York Times is nobody’s lapdog,” he added.

Feature Image: Solange Knowles performing at Spotify’s beach party during Cannes LionsTony Barson / Getty Images Entertainment    

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