Meanwhile Yahoo! Europe's vice-president of sales for Europe, Christophe Parcot, says online is growing for its short-term benefits: "The market has moved towards short-term results, which are more important to marketers, and it offers rich insight."

Microsoft chief executive Steve Ballmer predicts the death of newspapers and magazines and claims all content will have moved online in the next ten years, while Google chairman and chief executive Eric Schmidt told Marketing Week that he expects the number of online advertisers to rise dramatically in the same period.

The recession was, inevitably, high on the agenda at the festival where agency cutbacks saw its attendance down by 40%. Some marketers and chief executives claim the downturn is not as bad as it seems and is, in fact, a "reset" process, enabling marketers to scrap all previous activity and start afresh.

As group marketing director at News Limited, News Corporation's Australian arm, Joe Talcott has experience of dealing with financially uncertain times and advises: "You have to increase marketing spend and work across all media to succeed and maintain brand awareness.

"Simply twittering or being online is not enough to keep sales going - there has to be a more aggressive and instantaneous approach in the areas that people will look and react."

Volkswagen international advertising director Hartmut Seeger cautions: "Online can engage and get communities together, but TV and press can really capture the imagination. You must maintain the same brand approach across all communications and get the most positive responses possible each time you go out to the market."

The increasing role that digital is playing is leading agencies to vie for their slice of the action. Maurice Levy, chief executive of Publicis Groupe, admits: "We want to make sure that the whole group is absorbing the digital practice and that almost everyone is literate in digital, because we can't tell the client when it comes to digital that we are now going to call the specialists."

Specialist digital agencies are making the most out of the opportunities. LBi worldwide client services director Laurent Ezekiel says: "What's great at the moment is more customers are looking at getting into digital, which makes the creative challenge for us a lot tougher and pushes us to do our best. Clients are seeing the benefits of digital in new ways and it isn't about monetising social media anymore, but generating the best return on investment."

AKQA chief creative officer James Hilton says: "There is an immense demand for creativity online. The work we did at Fiat on eco:Drive demonstrates how this is testing new boundaries and changing consumer relationships with online formats."

Sapient executive director and worldwide creative officer Gaston Legorburu adds: "Technology has empowered consumers and changed how and when they engage with content. This dramatic shift means that brands need intelligent, technology-savvy stewards in a world where all advertising, including television, will be interactive. Our acquisition of Nitro establishes Sapient's leadership position in this dynamic and fast-growing segment."

The recurring theme at Cannes underlines that an eye-catching television ad is no longer enough. Marketers and agencies are striving to engage and interact with consumers and involve them with their brands with increasing sophistication in the quest for competitive advantage.

FACTS & FIGURES

* Attendance was down 40%.

* Award entries were down 20%.

* Tribal DDB Amsterdam won the Film Grand Prix for the Philips interactive film, Carousel.

* The Titanium Grand Prix and the Integrated Grand Prix were both won by Obama For America in Washington for the Obama/Biden Presidential campaign.

* Advertising Agency of the Year was given to DDB Brazil, Sao Paulo.

* The Network of the Year award was presented to BBDO.

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