The $1.3 Billion Vanity Tax

In 2017, In the shadow of the enormous yellow Snapchat ferris wheel eyesore blocking the entrance to the Palais at the Cannes Festival of Creativity, our new Publicis CEO Arthur Sadoun made a bombshell announcement: we would skip all awards for a year to fund development of Marcel, our AI platform. The industry reaction was swift and merciless – mockery, outrage, and predictions of our creative demise.

What's remarkable in retrospect isn't that we were early on AI (though that vindication came later), but that we dared question – however briefly – advertising's most expensive ritual of self-congratulation.

Now, as holding companies announce another wave of efficiency programs and headcount reductions (hello WPP Media), they continue funnelling over one fifth of their collective profit into something that delivers little measurable client or shareholder value: advertising awards submissions and attendance.

This should make every agency leader, employee, and investor question whether this expense is remotely justifiable – and clients should be asking even harder questions - the only money that agencies have is their money.

The visible part of the awards system – the entry fees – is merely the tip of a financial iceberg. Across just the top 10 global awards shows, our industry spends $98.9 million annually on entry fees. This is a brute force calculation based on median entry costs for each category (which differ by award, category, and timing of entry) and reported number of entries in 2024. Of course the awards organisers don't publish this largesse.

But that is less than 10% of the investment.

To this we add the cost of producing each entry. I have estimated this at $10,000 per submission in hard and soft costs. Yes, I hear you ask, I know that entries are made in multiple categories, but this number is conservative and my supposition is that work in multiple categories has higher levels of leadership involvement in the submission so the soft costs of people's time (the base level opportunity cost of doing anything else instead) is considered. What once required a simple case study video now demands multiple formats, specialised documentation, and intricate presentation materials. This submission cost adds to $1.23Bn.

Now we could then add to this the cost of the events themselves - the cost of people attending, delegates passes, sponsorships, events, travel, hotels and of course, rosé. I estimate that this would double our costs, conservatively. But since it is hard to discount these costs for the benefits of time with clients, networking, learning, team-building and incentives I will exclude them. I should note thought that you can achieve these ends in many other and more productive ways than getting everyone to the south of France. I'm also not including the awards outside the main ones - the local awards, the industry publishers awards and others.

The $1.33Bn in entry costs represents 21% of the top six holding companies' combined net profit in 2024. Profit not invested in innovation, not returned to shareholders, not distributed to employees, but spent on a circuit of self-congratulation.

To put this in perspective, if the holding companies redirected this spending, they could give every one of their 417,044 employees a $3,200 bonus. That's meaningful money for juniors and mid-level talent in an industry where burnout is endemic and compensation often falls short.

What makes this particularly alarming is the accelerating cost trajectory. Award entry fees have grown at approximately 5.0% CAGR over the 2014-2024 period, while global GDP grew at only 2.6% CAGR during the same timeframe. In simple terms, the cost of entering awards has grown at 1.9 times the rate of the global economy. This isn't just growth – it's inflation that far outpaces any reasonable business metric. The most dramatic growth has occurred in premium categories like Titanium and Creative Effectiveness. Award shows have systematically expanded their range of categories – what was once two dozen categories has ballooned to more than one hundred across some shows. With each new category comes a new opportunity for revenue from entry fees. This proliferation isn't driven by genuine creative evolution, but by the simple economics of maximising award show profitability.

No other creative industry comes close to this level of financial self-absorption. Not cinema, not music, not publishing. While Hollywood studios might spend lavishly on Oscar campaigns, these costs represent a fraction of studio profits and are directly tied to box office returns.

The comparison reveals advertising's uncomfortable truth: we've institutionalised an expensive system of self-validation that bears little relation to business results – either our clients' or our own.

Why does this continue? Three persistent myths keep the system running:

Delusion #1: "Awards drive new business"

If this were true, we'd see a clear correlation between awards won and holding company growth. Yet Publicis Groupe, ranked 4th (at best) in awards won, has delivered the strongest organic growth among holding companies in recent years. WPP, ranked 1st in 2024, has the worst of the big 3.

Delusion #2: "Awards attract talent"

The industry's talent crisis suggests otherwise. Despite the billions spent on awards, agencies struggle with unprecedented turnover, declining applications, and a widening skills gap. Today's top talent seems more attracted to purpose, flexibility, and compensation than golden lions.

Delusion #3: "Awards drive creativity"

Perhaps the most damaging myth. Awards all too often reward work created specifically for awards rather than work that solves real business problems. They incentivise spectacle over substance, short-term stunts over sustained effectiveness.

Imagine being the CEO who decides to redirect awards spending to employee bonuses, client investment, or shareholder returns. The immediate objection would be: "But we can't unilaterally disarm! Everyone else is still entering!"

This collective action problem explains why the system persists despite its obvious irrationality. Yet it doesn't explain why clients continue to tolerate a system where significant portions of their fees ultimately subsidise agencies' trophy hunting.

While the advertising industry lavishes $1.3 billion annually on awards, it's making comparatively modest investments in artificial intelligence – the very technology that threatens to fundamentally transform the business.

Based on announced AI investments for 2024:

That's approximately $803 million in combined AI investments across the major holding companies – far less than what they spend celebrating themselves.

Put another way, for every $1 these companies invest in future-proofing their businesses for AI transformation, they spend $1.65 congratulating themselves for their work today.

This imbalance is particularly striking when you consider the existential threat AI poses to traditional agency models. The technology is already automating tasks that once required teams of specialists, fundamentally changing the economics of creative production, and empowering clients to bring more work in-house.

Rather than confronting this reality with aggressive investment and transformation, the industry seems content to pour vastly more resources into an elaborate system of peer validation that delivers no measurable client value.

As the industry faces unprecedented transformation from AI, platform disintermediation, and talent shortages, can it really justify spending 21% of it's collective profit on trophies when they're investing just a fraction of that amount in securing the future?

The holding companies that address this financial elephant in the room will gain competitive advantage through either improved talent retention, enhanced client offerings, or superior shareholder returns – likely all three.

This isn't about abandoning creativity or excellence. It's about aligning incentives with actual value creation rather than perpetuating an expensive system of self-validation that benefits award show organisers at the expense of everyone else.

If "trimming fat" and "focusing on essentials" are the mantras of today's holding company leaders, the $1.3 billion awards industrial complex seems like an obvious place to start.

What do you think? Is the industry's awards obsession a necessary investment in creative excellence or an indefensible waste of resources that could be better directed elsewhere?

Brandflow is written by Justin Billingsley, who has spent his career on all three sides of the industry's table: senior client, global agency leader, technology founder. First published 8 May 2025 in the Brandflow newsletter on LinkedIn.