Pivotal Research's Brian Wieser says new accounting techniques are fueling Cannes cut-backs

Pivotal Research analyst Brian Wieser was speaking at Luma Partners' Digital Media Summit / Beet.Tv

Driving down costs has been a recurring theme throughout the marketing industry for years, but the edict has become more aggressive over the last 12 months, curtailing growth in the advertising sector and souring the mood at the upcoming Cannes Lions festival, according to Pivotal’s senior analyst Brian Wieser.

"This concept of zero-based budgeting or 'forgetting about everything you did last year and look at everything from scratch' tends to mean lower spending on marketing and paid media," Wieser said in a recent interview with Beet TV.

While marketing procurement has long been in place with big brands, the additional affect of "zero-based budgeting" techniques increasingly being employed by marketers is having a negative impact on the growth of the paid-for industry, especially in television, according to Wieser.

He said a confluence of both procurement cost cuts and a new approach to accounting are having a really negative impact on the growth of the industry, with the depressive effect felt across all media, not just in digital. This will result in a “sour mood” prevailing during this year's Cannes Lions, despite a the last 12 months also seeing some "great creativity."

This point was demonstrated last week when the Wall Street Journal reported that ad agencies are cutting costs, as “most ad holding companies are facing political and economic uncertainties, soft first-quarter earnings results and spending cuts by their clients”.

It claimed WPP wants to spend 25% less on Cannes attendance compared to previous years, Interpublic Group plans to shave 10% off its Cannes budget, while Dentsu Aegis is curtailing hiring and pay, citing “market weakness” and “clear signs of a slowdown.”

Wieser was speaking on the sidelines of the most recent Luma Partners Digital Media Summit, click here for more insights from the event.

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