Off Kilter 227: The Wrong Conversation.

tl;dr: Cannes. A canary in a coalmine of misaligned incentives.

Blessedly over for another year, vendor interests render Cannes increasingly patronizing.

I’ve been in the branding business for 25+ years, and while my name is on a Cannes Lion somewhere, I’ve never been, nor had any interest, in going.

Cannes was always a bit like a reverse Purge with pink wine. If advertising used to be 51 weeks of the year spent stabbing each other in the back, Cannes was the one week they slapped each other on the back instead.

Today, while the backslapping continues, there are far fewer backs left to slap as ad-world slowly implodes. This put Cannes itself in a bit of a pickle, so a few years ago it invited the big-tech foxes into the henhouse in a repositioning revamp. This forever changed the flavor of the event, from creative backslapping to the triumphant celebration of the industrialization of advertising.

While the pink wine remains, the focus shifted from the artisanal fever dreams of ambitious creative directors that ran only once on late-night TV in New Zealand toward technology, data, AI, creators, and the kind of industrial-scale hype you can only buy when you’re worth a trillion dollars or more. And make no mistake, the tech firms’ embrace of creativity this year exists only because they’re so secure in their dominance.

Anyway, the result is a resurgently modern Cannes that now bills itself as the most sophisticated forum for the world’s most sophisticated global marketers.

Great positioning; completely lost in execution.

Whether he meant to or not, Sean Summers, of Mercado Libre, hit the nail on the head when he stood on stage and observed that CMOs have been their own worst enemies when it comes to boardroom influence, stating that “I think it’s on us,” and “We created our own language, which by definition reduced credibility. We lost trust from business.”

To put this in context, let’s look at the numbers because they’re ugly. In Boathouse’s latest study of CEOs, 57% see their CMO as an execution leader rather than a strategic one, and just 8% think the CMO actually leads strategy. Sixty percent now describe marketing as a cost center, up from 35% a year earlier. And in the past year, fourteen percent have considered scrapping the CMO role altogether. Meanwhile, Spencer Stuart finds that a third of Fortune 500 corporations don’t have one at all. The CMO already holds the shortest tenure in the C-suite, and the money is headed in the same direction. Marketing budgets have fallen from a pre-pandemic norm of around 11% of company revenue to 7.7% today; half of CMOs are now running on 6% or less, and 59% say that isn’t enough to execute their strategy, in what a Gartner analyst labeled “a story of privation.” Oh, and the path forward is automation with AI, not because it’s going to make marketing better, but because corporations want to cut costs even further.

With such ugliness in mind, you’d be forgiven for thinking the Cannes stages would’ve been filled with urgency from people like Mr. Summers forcefully making the case for CMOs in the boardroom. You know, focusing on how marketing is a strategic discipline, how its value-creating capacity starts far upstream of the choice to advertise, how creativity exists to create advantages rather than merely defend and steward them, how marketing must lead innovation rather than resist it. That kind of thing.

But nope. The main stage keynote was a masterclass in how to patronize your audience, as Mark Ritson and Byron Sharp teased conflict before breezing through a grab-bag of the basics of effective advertising. Meanwhile, just down the street, the tech firms and consultancies freely hyped their next grift generation of rent-seeking tollbooths, without any discernible counter-narrative. McKinsey, peddling agentic ops, wants to extract value by sitting between you and your operations; OpenAI, peddling its ad platform, wants to extract value by sitting between you and your customers; Cannes says that’s AOK as long as they’re paying for the rosé.

Why the extreme disconnect? Well, that, my dear Watson, is elementary. Financial incentives. More specifically, misaligned financial incentives, of which Cannes is a veritable canary in the coal mine.

Today’s global advertising business is a trillion-dollar land grab, while boardroom-level marketing strategy is a rounding error. As a result, there’s almost zero vendor incentive to help the CMO become more upstream strategic and advantage-creating, and an overwhelming tsunami of “creating our own language” rhetoric focused on execution, because that’s where the TAM lives.

This is why festivals like Cannes, paid for by vendors, never ask the really difficult questions, like, oh, I dunno, why maybe we shouldn’t be getting into bed with vendors hell-bent on intermediating us into dependency? Or why no boardroom in the land should care about what Ritson and Sharp agree on.

Instead, the financial incentives all point in the opposite direction. They seek to frame executional and operational innovations as strategic revolutions, while burying genuinely strategic concerns under hype.

Which neatly brings me back to Sharp and Ritson. Not because of them per-se, but because they’re a direct illustration of what goes wrong when you present executional, operational factors as if they’re strategic brilliance. In the case of their talk, there were two sleights of hand on display. First, what they agreed on was implicitly presented as a highest common factor, when it was really a lowest common denominator. Second, and far more importantly, they referred to their talk as marketing truths, while what they discussed were advertising tactics. This wove an illusion of strategy around concepts that, in their telling, were clearly executional.

To illustrate the point, they both agreed that purpose is nonsense. But this only holds true at a certain altitude. If what you mean by purpose is slapping a social narrative onto an ad, they’re correct. Nobody wants Gillette lecturing them on what it takes to be a man. However, bring that altitude up a few notches and things change quickly. If the claim is that purpose as a guiding OS for your business is nonsense, they couldn’t be further from the truth. Try telling Patagonia its environmental worldview has zero to do with its business success, and prepare to be laughed at. And for any Sharpian dogmatists out there who claim that Patagonia is just quality pants with a distinctive logo attached, let’s flip that. Quality pants are the opening ante. There are loads of quality outdoor pants out there. Without that, you don’t have a business. It doesn’t explain success. Nor does the distinctive logo. Not on its own, anyhow. It doesn’t explain what happened when a colleague once left his favorite fleece behind in a hotel, lamenting that “I loved that fleece. It made me feel like I was in the mountains when I wore it.” That isn’t just distinctiveness; it’s the meaning the distinctiveness represents. It’s what Patagonia stands for, being internalized and played back as emotional surplus by a customer. And that meaning is defined way upstream of advertising. It’s the company’s literal OS.

This, folks, begets a bigger problem, which explains why CMOs have drifted so far from the C-Suite. Something festivals like Cannes do nothing to check and everything to exacerbate. When you become overwhelmed by operational rhetoric masquerading as strategic revolution, you risk treating it strategically, often with disastrous consequences.

To illustrate this point, let’s dial in on CPG (FMCG for everyone outside the US) for a second.

Over the past decade and a half, since the book How Brands Grow was published, CPG corporations have most fully embraced Sharp’s “laws” of brand growth as a strategic marketing model. Yet during that exact period, CPG corporations have flipped from stock-market over-performers to perennial underperformers. Might there be a connection?

Now, just to be clear, I’m not suggesting CPG underperformance is solely down to mistaking Sharp’s theoretical model of advertising for a set of laws governing marketing strategy. That would be stupid. But the blind spots of doing so are showing up in exactly the places you’d expect them to, so I’m confident it’s at the very least a direct contributor.

Here’s the basic challenge. What Sharp’s empirical research focuses on, and what he and Ritson agreed upon on stage, is what happens in a mature market, where innovation has slowed to a crawl, and everyone is competing on availability. It describes an equilibrium, not what it will take to break it. And while rhetorical flourishes such as the “laws” of double jeopardy and Dirichlet patterns make it all seem very sophisticated, the prognosis it boils down to is simplistic in the extreme: activate light buyers through mental and physical availability, which is driven by distinctive assets as memory triggers for purchase and recall, which in turn necessitates mass ad-spend to increase your ESOV (excess share of voice) so you get noticed and remembered. Fine, as far as it goes. But that’s exactly the problem.

Let’s contrast strategic thinking with executional thinking about the above. If you’re thinking strategically, you’ll understand that an equilibrium exists not to be accepted, but to be broken. You’ll know the path toward asymmetric returns in a mature, stable market is paved by innovation that injects dynamism, which can sometimes be disruptive. This is because you know that the largest and most sustainable returns come from innovation, and that market stability is largely a myth. You’ll also understand that what Sharp has described is a mechanism for defending the value created by an innovation once it’s in the wild. As a result, you’d split your resources and capabilities between offensive innovation on the one hand and defensive mental and physical availability building on the other. The first allows you to explore your way into new possibilities; the second optimizes for known patterns in customer behavior. For the nerds out there, and I am one, it’s the combination of complexity thinking in experimenting your way into new advantages and optimization thinking in extending the value of those advantages until they’re exhausted, governed by a consistent worldview that people will discover, buy into, and come to trust over time as you continually reinforce and refresh it.

On the other hand, if you were to mistake Sharp’s executional prognostications for strategy, you’d follow a very different path. You’d assume market maturity and stability as a given. You’d accept equilibrium, which means small shifts in market share become acceptable targets. You’d under-resource newer, smaller, “underscale” brands in favor of larger ones, before eventually killing them off altogether. And you’d deliberately shift resources away from innovation and into ad budgets to drive a more concentrated focus on building and maintaining mental and physical availability. And you wouldn’t bother standing for anything, because your positioning is, to paraphrase Sharp, “whatever your last ad said it was.”

Does any of this sound familiar? It should, because this is exactly the underperformance hole into which large CPG corporations have fallen, with ugly consequences. All that growth Sharp promised? It went to just about everyone except them.

Over the past decade, category-leading CPG brands captured barely a quarter of their categories’ growth. Small and mid-sized brands took nearly half, and private label took the rest. The incumbents weren’t just growing slowly; they were being beaten from both ends at once. Store brands captured the value shopper, while challenger and niche brands captured premium growth, with customers willing to pay more for products they found healthier, more meaningful, and more desirable. This left the big brands duking it out over a constrained middle with increasingly irrelevant propositions.

This left them with a single lever as volume growth disappeared: price. Having spent a decade moving money out of innovation and into availability (genuinely new products fell to a record low, from roughly half of all launches in 2007 to about a third by 2024), there was no new value to sell, so they charged more for the old.

It worked for a while. During the pandemic and post-pandemic periods, higher prices propped up profits, while volume growth gradually declined. But you can only raise prices so far on products that haven’t changed in years. Just ask PepsiCo, which aggressively raised prices until North American volume fell for five straight quarters as shoppers bought less, or bought the store brand instead. Elasticity curves aren’t infinite. Sooner or later, customers walk.

And cutting innovation was only half of it. The same scale-wins logic that says big brands win on availability also says small brands are a distraction. So, the giants took a knife to their portfolios, pruning the tail to pile everything behind a handful of mega-brands. After the 2015 merger, Kraft Heinz became a masterclass in cost discipline and brand concentration…right up until 2019, when the company wrote down the value of Kraft and Oscar Mayer by $15.4 billion.

By 2025, the stock had lost two-thirds of its value since the merger, and by early 2026, a new CEO quietly shelved a planned breakup to pour $600 million back into R&D and brand, the exact investment the company had starved for a decade. He even admitted Kraft Heinz had been charging more without giving customers…more.

Now, this isn’t me randomly Sharp bashing. The problem isn’t so much his theory as the altitude at which CMOs have chosen to apply it. P&G, for example, is a direct contrast to Kraft Heinz. A decade ago, it took a flamethrower to its brand portfolio, but the savings weren’t sent back to shareholders as profits, nor were they used to shore up availability. Instead, P&G strategically reallocated resources into innovation and what it calls “superiority” across product, packaging, and performance in categories where it believed it could create, rather than capture, value.

P&G treated Sharp’s theory exactly as it should be treated: the thing you do to defend advantages you’ve built by other means, not what you do to make up for not creating them in the first place.

The prize for doing it right? P&G, the bluest of blue-chip stocks, more than doubled in value from 2010 to today, while almost the entirety of its CPG peers flatlined.

The biggest problem, which Sharp obscures under the rhetoric of “laws,” is that his theory only holds for execution within the stable conditions he describes. While that stability might have held true in the 1950s, it’s temporary these days because once a market is viewed as “stable,” it reads as “ripe for disruption.” Which is why treating such theories as a strategic frame is so dangerous.

So, let’s rewind a little to Ritson and Sharp at Cannes patronizing the world’s most sophisticated marketers on the main stage. The problem wasn’t that anything they said was unentertaining (it was quite entertaining), or wrong (it was largely correct, given the right altitude), or even that it was overly basic (although it was). In fact, my issues have almost nothing to do with them and everything to do with the Cannes organizers themselves. Why? Because of the opportunity cost of what could have been on that stage instead.

This was the opportunity for Cannes to be the most sophisticated forum for the world’s most sophisticated marketers. And it fumbled the football. Badly.

As a result, the world’s busiest, most sophisticated, most under-pressure marketers flew to the south of France for guidance and inspiration and instead got a keynote refresher on the basics of a playbook that no longer holds up in the one category that built its whole f’ing marketing strategy around it.

Meanwhile, the tech firms and consultancies were left to freely hype the next phase of their capture of the marketing function for their own benefit, not the benefit of any CMO in attendance, not for the benefit of any of the corporations employing them, and most certainly not for the benefit of any of us paying consumers.

Instead, imagine an alternate universe where the keynote had been about the role of creativity in delivering marketing strategy for the boardroom? Navigating the complexity modern marketers face? Rethinking marketing as a strategic discipline? Finding sustainable opportunities amid uncertainty? Building asymmetric return machines? Blending the disciplines of complexity management and optimization? How to see through the tech hype? Lessons from the platform era that now apply to AI? Or even, God forbid, creating new customer value?

This was the real cost of having the wrong conversation. Not a wasted week in France, but a wasted opportunity to talk about the stuff that really matters, which the LinkedIn warriors would’ve reliably amplified. Instead, they’re abusing us with asinine debates around whether it’s called mental availability or brand salience. FFS, who cares? No CEO, that’s for sure.

Rome, fiddles, anyone?

Ah well, there’s always next year.

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