French creative directors are under no illusions. It is not going to be a good Cannes festival for them and this simply reflects the current economic situation of France's media owners and agencies. Last year, according to the research institute IREP, media advertising turnover had decreased by 1.2 per cent, and the total communications market increased by only 0.8 per cent.
According to Philippe Legendre, the director of AACC (the French advertising association), agencies' gross billings for 2002 were either stable or down on 2001. Unemployment is also more common, although he is no more optimistic for 2003 "because of the economic situation and the increasing pressure on the agencies' remuneration".
Indeed, last year saw a 50 per cent decrease in the numbers of pitches taking place, as well as a significant reduction in large account transfers.
Advertisers have also butchered their media budgets. As soon as the new France Telecom chairman, Thierry Breton, arrived, he cut the company's advertising budget.
In this environment, advertisers do not want to experiment. Agencies tend to follow this trend, which explains why the number of creative agencies has not grown. "During the past five years, France has returned to the top league, but we are still not leading. One of the main reasons is because French brands do not have the strength of Anglo-Saxon brands," Remi Babinet, the co-founder of BETC Euro RSCG, says. However, between 60 and 70 per cent of his accounts are global brands such as Evian, Peugeot or Orange, compared with just 10 per cent when he started up.
Among the other creative agencies, BDDP & Fils, Saatchi & Saatchi, devarrieuxvillaret (Havas Group), Publicis, Lowe Alice and CLM have also had a number of impressive campaigns. Young & Rubicam's new hotshop Leg made an impact in France with an excellent campaign for Eurostar.
Two independent agencies might also perform well in Cannes this week: Enjoy Scher Lafarge, and Leagas Delaney, whose chairman, Pascal Gregoire, has just been appointed the vice-chairman Europe, and a member of the board.
Two changes might improve matters. The first is the more frequent use of comparative advertising, permitted in France since 1992 but hardly used until recently owing to a gentleman's agreement. The telecom companies were the first to take advantage of this with Tele 2 comparing its prices to France Telecom. The opticians followed, with the chain Visual accusing its rival Aflelou of poor quality in a TV ad. Now the food brand Vico has broadcast a TV ad which compares its ingredients with those of its rival, the market leader Mousline. Significantly, these campaigns were all a big PR success. "Freedom always releases creativity," Gregoire says.
Babinet describes this development as a "godsend". "It's a fantastic way to make people laugh," he says. "And the first brand that can make a really clever comparative ad will be a winner. It is agencies' duty to persuade them of this."
The second event that will spark French creativity is the inevitable deregulation of TV advertising that will permit the cinema, press, publishing and retail sectors to advertise on TV.
But does the problem with France's creativity go slightly deeper? "I believe that French agencies find it difficult to invent new concepts, to use guerrilla marketing or comparative advertising," Erik Vervroegen, TBWA's creative director, says. "They do many good things but it is not enough. We have to learn how to think out of the box both in terms of pure creativity but also with regard to particular media. For example, TBWA has created explicit advertising against Aids, which it has placed at the beginning of pornographic DVDs."
Yet it's not just creative agencies that are pioneering creative solutions.
Another example is what Initiative Media has done for Unilever. "In 2002, we started to create short programmes on television for Fruit d'or margarine," Stephane Bodier, the managing director of Initiative Media in Paris, explains.
"After only three months the results were excellent in terms of recognition, likeability and intention of buying."
The media agency then recommended Unilever to extend this approach with its other brands. Programming for the dishwasher detergent Sun directed the brand towards the pleasure of "a beautiful table setting". Meanwhile, Dove illustrated the different ways in which a woman can be beautiful.
Another brand to use this approach was Carte d'Or coffee. All of the programming was transmitted on the country's leading terrestrial channel, TF1.
"Agencies sometimes insist too much on the creativity of their films, but have forgotten that the media choice can be creative too," Bodier says.
By Isabelle Musnik in Paris
Could things be looking up for Spain's advertising industry? Just over a month ago, Saatchi & Saatchi lost its creative director, Cesar Garcia, to J. Walter Thompson in the first high-profile agency transfer in ages.
The end of the war in Iraq and May's local government elections created a mini adspend spree by the public sector.
And traditionally staid agencies such as McCann-Erickson have been turning out creative work that would have had marketing executives spluttering into their tinto a few years back.
This is hardly the stuff of a full-blown recovery, but agency heads could be forgiven for getting excited about anything remotely resembling a recovery.
According to Concha Wert, the manager of the country's main ad trade body, the Club de Creativos, Spain's ad industry has practically been in hibernation for the best part of two years. The last major agency acquisition was Euro RSCG's purchase of Lorente in 2001.
And there have been only a few major account moves: in February Romulo y Remo bagged Heineken and JWT lost J&B Whisky to Y&R Madrid and Barcelona's SCPF, while Saatchis won the telecoms brand Auna last December.
Yet significantly, the depressed market has not stopped a stream of start-ups. Kitchen, The Farm, Sra Rushmore and McCann's El Laboratorio have all built strong reputations for creativity, but many others have fallen silent or have been absorbed into larger networks.
McCann-Erickson recently swallowed Cathedral and TBWA snapped up Equipo Tres in 2000.
One of the latest teams to go it alone is the former management of BSB's Barcelona office, which bought its independence last month but kept an affiliation to the Bates network under the BSBraccord banner.
Manuel Salgado, the veteran creative director at the agency, hints at how bad things had become creatively for the industry in Spain when he picks McCann-Erickson Argentina's low-budget Coca-Cola ad "Para Todos" as one of his current favourites on TV.
"Today's marketing chiefs are more interested in numbers than images," he says. "The days of the prima donna creative director are over. We're having to take on work we would have turned our noses up at before."
Leading the creative fight-back are Barcelona's SCPF, headed by the darling of the Spanish ad scene, Toni Segarra, and Tandem DDB, which was Spain's most awarded agency last year in Cannes and continues to score highly for its work on the Volkswagen account.
In Madrid, Tiempo BBDO has picked up on the current fad for all things Argentinean by recruiting the creative directors Marcelo Vergara and Fabio Mazia, from Agulla & Baccetti in Buenos Aires. The duo has already turned heads with its television work for Renault.
"We're in a period where creativity for its own sake won't do," Javier Taboada, the board account director at Tiempo, admits. "But with Renault we've started to show you can get creativity with results. If other advertisers see that, they might try it, too. We haven't lost hope."
By Jason Deign in Barcelona
This year is the third consecutive year to move slowly for Italy's ad agencies. The new technology sector, synonymous with the colossal budgets of three years ago, is already a memory, even though Italy's telecoms, particularly Telecom Italia, are still spending. In January, the UPA, the association of advertisers, predicted a flat year and cited 2004 as the year of recovery. With a spend of eight billion euros, 2002 was down 2.5 per cent.
"The market is still sluggish," Enrico Montangero, the president of AssoComunicazione, the national agencies association, says. "And there are no signs of a recovery. The year is supposed to close up 1.4 per cent. Patience is mandatory."
That's certainly true in a country where the GNP growth rate for 2002 was just 0.3 per cent. Compare this with France (just under 2 per cent) and Spain (just over 2 per cent) and take into consideration that just 1.5 per cent of the GNP is in communications, and it's no wonder that Italy is downbeat.
Nick Baum, the chairman of TBWA Southern Europe, believes that the Italian market remains undeveloped because of its past. "My theory is that when modern advertising started in Italy, it was dominated by large American agencies. Big multinationals invaded the market and you had a packaged goods mentality being imposed on the market.
On the one hand you had boring advertising and on the other hand you had crazy unstrategic creativity. You also have big monopolistic structures such as Fiat as well as the fact that Berlusconi owns so much of the country's media."
There has been little in the way of new business or massive account moves.
However, the most impressive recent win since Bates Italia scooped the 75 million euro 3G account last year is Red Cell picking up Sky Italia.
Red Cell has a strong reputation in Italy due to its long-standing association with Alfa Romeo, and beat off competition from Armando Testa, D'Adda, Lorenzini, Vigorelli, BBDO and Saatchi & Saatchi to win the account. The media mogul Rupert Murdoch is spending 80 million euros with Red Cell from July to set up Italian satellite television, born after the unification of Stream and Tele+ activities.
On the international front, Italy seems in some respects unable to get rid of its provincialism. Lowe Pirella will undertake work for Di Saronno and Leagas Delaney in Rome will create a global campaign for Illy coffee.
Over the past two years, Saatchi & Saatchi has created pan-European campaigns for Renault ("designed by the road" for the Megane and "community" for the Clio), while Publicis created a commercial for the Megane ("moon") and Euro RSCG MCM produced the prize-winning "The Sculptur" for the Peugeot 206.
Finally, the effects of Maurice Levy's decision to cull D'Arcy have resulted in different destinies for the Milan and Turin-based agencies: the former will become part of Publicis, while the latter will be integrated in Leo Burnett and maintain the historic name Bgs in the heading, being the agency of record for Fiat.
By Stefania Medetti in Milan.